<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 5, 1998
REGISTRATION STATEMENT NO. 333-42315
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
PIONEER NATURAL RESOURCES COMPANY
PIONEER NATURAL RESOURCES USA, INC.
(Exact name of registrants as specified in their charters)
<TABLE>
<S> <C>
DELAWARE 75-2702753
DELAWARE 75-2516853
(State or Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
SCOTT D. SHEFFIELD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PIONEER NATURAL RESOURCES COMPANY
1400 WILLIAMS SQUARE WEST 1400 WILLIAMS SQUARE WEST
5205 NORTH O'CONNOR BLVD. 5205 NORTH O'CONNOR BLVD.
IRVING, TEXAS 75039 IRVING, TEXAS 75039
(972) 444-9001 (972) 444-9001
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone number,
including area code, of Registrants' principal executive including area code, of agent for service)
offices)
</TABLE>
Copies to:
<TABLE>
<C> <C>
MARK L. WITHROW ROBERT L. KIMBALL
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL VINSON & ELKINS L.L.P.
PIONEER NATURAL RESOURCES COMPANY 2001 ROSS AVENUE
1400 WILLIAMS SQUARE WEST SUITE 3700
5205 NORTH O'CONNOR BLVD. DALLAS, TEXAS 75201
IRVING, TEXAS 75039 (214) 220-7700
(972) 444-9001
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(3).........................
Preferred Stock, par value $.01 per
share(4)(5)..............................
Depositary Shares(5)....................... (6) (6) (6) (6)
Common Stock, par value $.01 per
share(7).................................
Warrants(8)................................
Guarantees of Debt Securities(9)...........
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Total.................................. $1,400,000,000(10)(11) 100% $1,400,000,000(10) $413,000(12)
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</TABLE>
Footnotes to table on next page
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included herein also relates to a total of $500,000,000 of Debt Securities and
Common Stock of the registrant previously registered pursuant to Rule 415 under
Registration Statement on Form S-3 No. 333-20483 and not issued. This Amendment
No. 1 to Registration Statement constitutes Post-Effective Amendment No. 2 to
the Registration Statement Form S-3 No. 333-20483.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON THE DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
Footnotes to table from cover page
- ---------------
(1) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with the issuance by the registrant
of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(o)
under the Securities Act of 1933.
(3) Subject to note (10) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt Securities
are issued at an original issue discount, then the offering price shall be
in the greater principal amount as shall result in an aggregate initial
offering price not to exceed $1,400,000,000 less the dollar amount of any
securities previously issued hereunder.
(4) Subject to note (10) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time
to time, by the registrant.
(5) Subject to note (10) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the
registrant elects to offer to the public fractional interests in shares of
Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing the fractional interests and the
shares of Preferred Stock will be issued to the depositary under the
Deposit Agreement.
(6) Not applicable pursuant to General Instruction II.D. of Form S-3.
(7) Subject to note (10) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the registrant. There are also being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable upon
conversion or redemption of Preferred Stock or Debt Securities registered
hereunder.
(8) Subject to note (10) below, there is being registered hereunder an
indeterminate amount and number of Warrants, representing rights to
purchase Debt Securities, Preferred Stock, or Common Stock registered
hereunder.
(9) Subject to note (10) below, there is being registered hereunder an
indeterminate principal amount of Guarantees of Debt Securities.
(10) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$1,400,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. The aggregate amount of
Common Stock registered hereunder is further limited to that which is
permissible under Rule 415(a)(4) under the Securities Act of 1933. The
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(11) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
constituting a part of this Registration Statement also relates to
$500,000,000 of the registrant's securities registered under Registration
Statement No. 333-20483.
(12) A registration fee was previously paid in connection with the registration
of a total of $500,000,000 of Debt Securities and Common Stock of the
registrant pursuant to Rule 415 on Registration Statement No. 333-20483,
and the remaining $265,500 of the registration fee was paid in connection
with the initial filing of this Registration Statement.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 5, 1998
PROSPECTUS SUPPLEMENT
(To Prospectus Dated January , 1998)
$600,000,000
PIONEER NATURAL RESOURCES COMPANY
% SENIOR NOTES DUE 2008
% SENIOR NOTES DUE 2028
PAYMENT OF PRINCIPAL AND INTEREST GUARANTEED BY PIONEER NATURAL
RESOURCES USA, INC.
LOGO
------------------
The % Senior Notes Due 2008 (the "2008 Notes"), which will mature on
, 2008, and the % Senior Notes Due 2028 (the "2028 Notes" and,
collectively with the 2008 Notes, the "Notes"), which will mature on
, 2028, are being offered (the "Offering") by Pioneer Natural Resources
Company (the "Company") and will be unconditionally guaranteed (the
"Guarantees") on an unsecured basis by Pioneer Natural Resources USA, Inc.
("Pioneer USA" or the "Guarantor"), a wholly-owned subsidiary of the Company.
Interest on the Notes is payable semiannually on and of each
year, commencing , 1998. The Notes may be redeemed at any time at the
option of the Company, in whole or from time to time in part, at a price equal
to 100% of the principal amount thereof plus accrued and unpaid interest, if
any, to the date of redemption, plus a Make-Whole Premium, if any, relating to
the then prevailing Treasury Yield and the remaining life of the Notes.
The Notes will be general unsecured obligations of the Company ranking pari
passu in right of payment with all other senior unsecured indebtedness of the
Company and will be senior in right of payment to any subordinated indebtedness
of the Company. The Company is a holding company that conducts all its
operations through subsidiaries, and the Notes will be effectively subordinated
to all obligations of the Company's subsidiaries that are not guarantors of the
Notes. At December 31, 1997 (after giving effect to the Offering and the
application of estimated net proceeds therefrom), the Company would have had
approximately $1.1 billion of indebtedness for borrowed money ranking pari passu
in right of payment with the Notes, and non-guarantor subsidiaries of the
Company would have had approximately $248.3 million of indebtedness for borrowed
money. See "Description of Notes -- Ranking." The Guarantees will be general
unsecured obligations of the Guarantor ranking pari passu in right of payment
with all other senior unsecured indebtedness of the Guarantor and will be senior
in right of payment to any subordinated indebtedness of the Guarantor. The
Guarantees will terminate if the Guarantor is released from its guarantees of
the Company's United States Credit Facility (as defined herein). See
"Guarantees" and "Ranking" in "Description of Notes."
The Notes will be represented by one or more Global Securities ("Global
Notes") deposited with the Depositary, which initially will be The Depository
Trust Company, and registered in the name of the Depositary or its nominee.
Beneficial ownership of the Notes will be shown on, and transfers thereof will
be effected only through, records maintained by the Depositary and its
participants. Except under the limited circumstances described herein, Notes in
definitive form will not be issued in exchange for Global Notes. So long as
Notes are represented by Global Notes, settlement for beneficial interests in
the Global Notes, including all secondary market trading activity, will be made
in immediately available funds as part of the Depositary's same-day funds
settlement system. All payments of principal and interest on the Notes will be
made by the Company in immediately available funds.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per 2008 Note % % %
- ------------------------------------------------------------------------------------------------------------------------
Per 2028 Note % % %
- ------------------------------------------------------------------------------------------------------------------------
Total $ $ $
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</TABLE>
(1) Plus accrued interest, if any, from , 1998, to the date of
delivery.
(2) Before deducting expenses payable by the Company, estimated to be
$ .
------------------
The Notes are offered subject to receipt and acceptance by the Underwriters,
to prior sale and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Notes will be made through the facilities of The Depository
Trust Company on or about January , 1998, against payment therefor in
immediately available funds.
------------------
SALOMON SMITH BARNEY CHASE SECURITIES INC.
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
NATIONSBANC MONTGOMERY SECURITIES
January , 1998.
<PAGE> 4
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
PURCHASES OF THE NOTES TO STABILIZE THEIR MARKET PRICE AND PURCHASES OF THE
NOTES TO COVER ANY SHORT POSITION IN THE NOTES MAINTAINED BY THE UNDERWRITERS.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
FORWARD-LOOKING STATEMENTS
All statements in this Prospectus Supplement concerning the Company other
than purely historical information (collectively "Forward-Looking Statements")
reflect the current expectations of management and are based on the Company's
historical and pro forma operating trends, its proved reserves, and other
information available to management. These statements assume, among other
things, that no significant changes will occur in the operating environment for
the Company's oil and gas properties and that there will be no material
acquisitions or divestitures. There can be no assurance that the assumptions
used will prove to be accurate. The Company cautions that the Forward-Looking
Statements are subject to all the risks and uncertainties incident to the
acquisition, development and marketing of, and exploration for, oil and gas
reserves. These risks include, but are not limited to, commodity price risks,
risks relating to pricing and availability of third-party supplies, equipment
and services for operations, counterparty risks, drilling risks, and reserve,
operations and production risks. Certain of these risks are described in the
documents incorporated by reference herein. Moreover, the Company may make
material acquisitions, alter its capital expenditure budget or plans, or enter
into other financing transactions. None of these can be predicted with certainty
and, accordingly, are not taken into consideration in the Forward-Looking
Statements. For all of the foregoing reasons, actual results may vary materially
from the Forward-Looking Statements. The Company disclaims any obligation or
undertaking to release publicly any updates about changes in the Company's
expectations with regard to the subject matter of any Forward-Looking Statements
or any changes in events, conditions or circumstances on which any
Forward-Looking Statements are based.
S-2
<PAGE> 5
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements, including the notes thereto,
appearing elsewhere in or incorporated by reference into this Prospectus
Supplement. As used herein, and unless the context requires otherwise, "Pioneer
Natural Resources Company" or the "Company" means Pioneer Natural Resources
Company and its consolidated subsidiaries.
THE COMPANY
Pioneer Natural Resources Company is the second largest independent
exploration and production company in the United States, based on total proved
reserves, and has a balanced oil and gas reserve base. Pioneer Natural Resources
Company was created through the merger (the "Parker/Mesa Merger") of Parker &
Parsley Petroleum Company ("Parker & Parsley") and MESA Inc. ("Mesa")on August
7, 1997. The Company's United States operations are located primarily in Texas,
Kansas, Oklahoma, Louisiana, New Mexico and offshore Gulf of Mexico.
International operations are located primarily in Argentina and Canada.
BUSINESS STRATEGY
Development and production enhancement activities. The Company seeks to
increase reserves and production through exploitation activities, including
developmental drilling and recompletions in its core operating areas. The
Company has identified over 3,700 infill drilling locations on its properties.
Development activities are expected to account for approximately 75% of the
Company's 1998 investment budget. Domestically, the majority of 1998 development
investments are expected to occur through drilling programs in the Spraberry,
West Panhandle and Hugoton fields, with additional investments occurring in the
south Louisiana inland waters, onshore Gulf Coast and Permian Basin areas.
Internationally, development opportunities are located in the Neuquen Basin of
Argentina and the Chinchaga area in Canada.
Exploration. The Company's exploration activities use seismic, drilling and
completion technology to identify and drill sites with high reserve potential,
such as those in the southern Louisiana transition zone, the Gulf of Mexico, the
East Texas Basin, western Canada and Argentina. Exploration activities are
expected to account for approximately 25% of the Company's 1998 investment
budget. Domestic exploration efforts in 1998 are expected to be focused on the
onshore and offshore Gulf of Mexico, the Cotton Valley Reef trend of the East
Texas Basin, and the Delaware Basin in West Texas. International exploration
efforts in 1998 are expected to be conducted in Canada and in the Neuquen basin
and Tierra del Fuego areas of Argentina.
Acquisitions. The Company pursues acquisitions to enhance existing core
areas and to establish new core areas. The Company's acquisition efforts focus
on assets with opportunities to increase reserves and production through both
exploitation and exploration activities with a high degree of operational
control. The Company believes that one of its strengths is a technical team that
concentrates on executing strategic acquisitions and mergers.
Increasing natural gas processing capacity in core areas. The Company
intends to expand the processing capabilities of its gas processing facilities
and to obtain additional dedications of third party gas to these plants. By
owning and operating these processing facilities, the Company retains the
processing margin on the gas it produces, as well as on gas produced by third
parties.
Maintaining financial strength and flexibility. The Company intends to
maintain financial strength, financial flexibility, and an investment grade
rating for its senior debt by seeking to: (i) maintain its credit ratios
consistent with guidelines established by the major credit rating agencies for
investment grade companies; (ii) fund its development and exploration activities
primarily with internally generated cash flow; (iii) continue a portfolio
management approach to its assets so as to direct future investments toward
projects that enhance growth; (iv) use hedging strategies to reduce price risk
in supporting its capital expenditure budget and its acquisition activities; and
(v) reduce per-unit operating and general and administrative expenditures.
S-3
<PAGE> 6
RECENT DEVELOPMENTS
Chauvco Acquisition. On December 18, 1997, the Company completed the
acquisition (the "Chauvco Acquisition") of the Canadian and Argentine oil and
gas businesses of Chauvco Resources Ltd. ("Chauvco"). Chauvco was a
publicly-traded Canadian oil and gas company concentrating on the acquisition,
exploration, development and production of oil and natural gas resources in
Canada in the provinces of Alberta, Saskatchewan, British Columbia and Manitoba,
and in Argentina in the provinces of Tierra del Fuego, Neuquen, Rio Negro and
Santa Cruz.
The Chauvco Acquisition established a new core area for the Company in
western Canada and expanded the Company's existing core area in Argentina. The
acquisition consideration paid to the shareholders of Chauvco was approximately
$946 million, consisting of the issuance of approximately 24.9 million
equivalent shares of the Company's Common Stock and the assumption of $228
million of long-term debt.
American Cometra Acquisition. On December 19, 1997, the Company completed
the acquisition of assets in the East Texas Basin from affiliates of American
Cometra, Inc. ("ACI") and Rockland Pipeline Co. ("Rockland"), both subsidiaries
of Electrafina S.A. of Belgium. The total consideration paid was approximately
$126 million, consisting of $80 million in cash and 1.7 million shares of the
Company's Common Stock. The Company acquired ACI's producing wells, acreage,
seismic data, royalties and mineral interests, and Rockland's gathering system,
pipeline and gas processing plant in the East Texas Basin. This acquisition
established a critical mass and core area in the East Texas Basin for the
Company and provided it with a major presence in the Cotton Valley Reef trend.
Credit Facility Agreements. On December 18, 1997, the Company amended and
restated its United States Credit Facility in order to substitute the Company as
the borrower in place of Pioneer USA and to establish credit amounts of $1.075
billion under the primary credit facility and $300 million under an additional,
364-day credit facility. Pursuant to the amendment, Pioneer USA and certain
other subsidiaries of the Company provide guarantees of the Company's
obligations under the United States Credit Facility. Pioneer USA is a direct,
wholly-owned subsidiary of the Company and owns substantially all of the United
States onshore and offshore properties of the Company. Pioneer USA has no
borrowed money obligations other than for a $9.1 million secured building loan
and certain capitalized lease obligations and has no guarantees of other
borrowed money obligations except as guarantor for the Notes, the $1.375 billion
United States Credit Facility, and the $300 million of senior notes of the
Company originally issued by Parker & Parsley (the "Parker & Parsley Notes").
The United States Credit Facility is also secured by a pledge of 65% of the
stock of certain non-U.S. subsidiaries, including Pioneer Natural Resources
(Canada) Ltd., the subsidiary that acquired Chauvco ("Pioneer Canada"). Also on
December 18, 1997, the Company refinanced all of Chauvco's outstanding debt by
establishing a $290 million Canadian credit facility (the "Canadian Credit
Facility") under which Chauvco is the borrower and the Company and certain of
its subsidiaries other than Pioneer USA provide guarantees. On December 22,
1997, the Company established an additional unsecured $100 million working
capital line of credit.
Subordinated Note Tender. On December 15, 1997, Pioneer USA completed its
offer to purchase for cash any and all of its $264 million 11 5/8% Senior
Subordinated Discount Notes Due 2006 and its $325 million 10 5/8% Senior
Subordinated Notes Due 2006 originally issued by Mesa Operating Company
(collectively, the "Mesa Notes"). The offer was completed with approximately 95%
of the Mesa Notes tendered, which will result in a fourth quarter after-tax
charge to the Company's financial results of approximately $11.9 million.
Pioneer USA paid for the tendered Mesa Notes on December 18, 1997, with
borrowings under the United States Credit Facility. Also on December 18, 1997,
in accordance with consents solicited in connection with the tender offer, the
indentures governing both series of Mesa Notes were amended to eliminate most of
their restrictive covenants.
Assumption of Certain Debts by the Company. On December 30, 1997, the
Company and Pioneer USA completed a restructuring that resulted in the Company
becoming the primary obligor on the $28.4 million of Mesa Notes that were not
tendered and on the $300 million of Parker & Parsley Notes. Pioneer USA has
guaranteed the payment of principal and interest on the Parker & Parsley Notes.
The guarantee of the Parker & Parsley Notes will terminate if Pioneer USA is
released from its guarantees of the Company's United States Credit Facility.
S-4
<PAGE> 7
Property Divestitures. On December 15 and 16, 1997, the Company sold
approximately $103 million of its non-strategic properties in two separate,
all-cash transactions. These divestitures involved approximately 800 properties,
representing less than 3% of the Company's total reserve base and about 1% of
the Company's daily production.
Fourth Quarter Charges. During the fourth quarter of 1997, the Company will
recognize certain charges that adversely affect the Company's financial results.
In addition to the after-tax charge of $11.9 million related to the purchase of
the Mesa Notes, the Company estimates that it will recognize after-tax charges
of between $7 and $10 million for the purchase of 3-D seismic data and
approximately $3 million resulting from the write-off of an unsuccessful well in
Guatemala. The decline of oil and gas prices during the fourth quarter of 1997
will also have an adverse effect on the Company's financial results.
THE OFFERING
SECURITIES OFFERED......... $600,000,000 principal amount of % Senior Notes
Due 2008 and
% Senior Notes Due 2028.
MATURITY................... , 2008, and , 2028,
respectively.
INTEREST PAYMENT DATES..... and of each year, commencing
, 1998.
GUARANTEES................. The Notes will be unconditionally guaranteed on an
unsecured basis by Pioneer USA. No other subsidiary
of the Company will be a guarantor. The Guarantees
will terminate if the Guarantor is released from
its guarantees of the Company's indebtedness under
the United States Credit Facility, but are not
required to be reinstated if such guarantees under
the United States Credit Facility are subsequently
reinstated. Pioneer USA is a direct, wholly-owned
subsidiary of the Company and directly owns
substantially all of the United States onshore and
offshore properties of the Company. Pioneer USA has
no borrowed money obligations other than for a $9.1
million secured building loan and certain
capitalized lease obligations and has no guarantees
of other borrowed money obligations except as
guarantor for the Notes, the United States Credit
Facility, and the Parker & Parsley Notes.
RANKING.................... The Notes will be general unsecured obligations of
the Company ranking pari passu in right of payment
with all other senior indebtedness of the Company
and will be senior in right of payment to all
existing and future subordinated indebtedness of
the Company.
The Notes will be effectively subordinated in right
of payment to all existing and future secured
indebtedness of the Company to the extent of the
value of the assets securing such indebtedness. The
Company's $1.375 billion United States Credit
Facility is secured by a pledge of 65% of the
outstanding stock of certain non-U.S. subsidiaries,
including Pioneer Canada, and the Notes will
therefore be effectively subordinated to the United
States Credit Facility to the extent of the value
of such stock. The Company is a holding company
that conducts all its operations through
subsidiaries, and the Notes will be effectively
subordinated to all obligations of the Company's
subsidiaries that are not guarantors of the Notes.
At December 31, 1997 (after giving effect to the
Offering and application of the estimated net
proceeds therefrom), the Company would have had
approximately $1.1 billion of indebtedness for
borrowed money ranking pari passu in right of
payment with the Notes, and non-guarantor
subsidiaries of the Company would have had
approximately $248.3 million of indebtedness for
borrowed money. In addition, Pioneer
S-5
<PAGE> 8
USA has guaranteed the United States Credit
Facility and the Parker & Parsley Notes, which
guarantees will be pari passu with the Guarantees.
The Indenture governing the Notes does not restrict
the ability of subsidiaries to incur additional
liabilities, including indebtedness under and
guarantees of bank credit facilities, in the
future. The Company's subsidiaries may also have
other liabilities, including contingent
liabilities.
The Guarantees will be general unsecured
obligations of the Guarantor ranking pari passu in
right of payment with all other senior unsecured
indebtedness of the Guarantor and will be senior in
right of payment to any subordinated indebtedness
of the Guarantor. The Guarantees will be
effectively subordinated in right of payment to any
secured indebtedness of the Guarantor to the extent
of the value of the assets securing such
indebtedness. The Guarantees could also be
effectively subordinated to all the obligations of
the Guarantor under certain circumstances. See
"Description of Notes -- Guarantees" and
"Description of Notes -- Ranking."
REDEMPTION................. The Notes may be redeemed at any time at the option
of the Company, in whole or from time to time in
part, at a price equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if
any, to the date of redemption, plus a Make-Whole
Premium, if any, relating to the then prevailing
Treasury Yield and the remaining life of the Notes.
PRINCIPAL COVENANTS........ The Indenture governing the Notes contains certain
covenants that, among other things, restrict the
ability of the Company, under certain
circumstances, to create liens and to enter into
sale/leaseback transactions. These limitations will
be subject to a number of significant exceptions
and qualifications. See "Description of
Notes -- Certain Covenants."
USE OF PROCEEDS............ The net proceeds from the sale of the Notes will be
used primarily to repay existing bank indebtedness
under the United States Credit Facility. See "Use
of Proceeds."
S-6
<PAGE> 9
SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The summary unaudited pro forma combined statement of operations data and
other financial data of the Company for the nine months ended September 30,
1997, and for the year ended December 31, 1996, give effect to the Parker/Mesa
Merger, the Chauvco Acquisition, and certain other transactions as if all those
transactions had occurred on January 1, 1996. The summary unaudited pro forma
combined balance sheet data of the Company as of September 30, 1997, give effect
to the Chauvco Acquisition as if the acquisition had occurred on September 30,
1997. These transactions are identified in, and the summary unaudited pro forma
combined financial data are qualified in their entirety by and should be read in
conjunction with, the unaudited pro forma combined financial statements of the
Company contained in the Company's Current Report on Form 8-K dated December 18,
1997 (the "Chauvco 8-K"), which is incorporated in the Prospectus by reference.
<TABLE>
<CAPTION>
PRO FORMA
NINE MONTHS PRO FORMA
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(IN THOUSANDS, EXCEPT RATIOS)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Oil and gas............................................ $ 669,872 $ 881,639
Natural gas processing................................. -- 23,184
Interest and other..................................... 7,854 42,419
Gain on disposition of assets, net..................... 2,763 11,966
---------- ----------
680,489 959,208
---------- ----------
Costs and expenses:
Oil and gas production................................. 181,796 230,159
Natural gas processing................................. -- 11,949
Depletion, depreciation and amortization............... 283,588 365,499
Impairment of oil and gas properties and natural gas
processing facilities................................. 2,907 --
Exploration and abandonments........................... 52,718 37,555
General and administrative............................. 75,014 83,955
Interest............................................... 106,406 138,580
Other.................................................. 5,685 4,791
---------- ----------
708,114 872,488
---------- ----------
Income (loss) before income taxes......................... (27,625) 86,720
Income tax benefit (provision)............................ 12,400 (30,700)
---------- ----------
Income (loss) from continuing operations.................. $ (15,225) $ 56,020
========== ==========
OTHER FINANCIAL DATA:
EBITDAEX (a).............................................. $ 417,994 $ 628,354
Ratio of earnings to fixed charges(b)..................... (b) 1.62
BALANCE SHEET DATA (END OF PERIOD):
Working capital........................................... $ 38,249
Property, plant and equipment, net........................ 4,586,667
Total assets.............................................. 4,930,221
Long-term obligations..................................... 1,975,220
Total stockholders' equity................................ 2,406,437
</TABLE>
- ---------------
(a) EBITDAEX is presented because the Company believes it to be a commonly used
financial indicator of a company's ability to service or incur debt.
EBITDAEX (as used herein) is calculated by adding interest, income taxes,
depletion, depreciation and amortization, impairment of oil and gas
properties and natural gas processing facilities, and exploration and
abandonment costs to income (loss) from continuing operations. Interest
includes accrued interest expense and amortization of deferred financing
costs. EBITDAEX should not be considered as an alternative to income (loss)
or operating income (loss), as defined by generally accepted accounting
principles, as an indicator of the Company's financial performance, as an
alternative to cash flow, as a measure of liquidity or as being comparable
to other similarly titled measures of other companies.
(b) For purposes of computing the pro forma ratio of earnings to fixed charges,
earnings consists of income (loss) before income taxes plus fixed charges.
Fixed charges consist of interest expense, interest capitalized and the
portion of rental expense attributable to interest. Unaudited pro forma
earnings for the Company were inadequate to cover its fixed charges during
the nine months ended September 30, 1997, by $27.6 million.
S-7
<PAGE> 10
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
THE COMPANY
The following table sets forth selected consolidated financial data of the
Company (as successor to Parker & Parsley for accounting purposes) for the nine
months ended September 30, 1997 and 1996, and for each of the five fiscal years
in the period ended December 31, 1996. The following data should be read in
conjunction with the Company's "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Company's consolidated
financial statements and notes thereto contained in the reports incorporated in
the Prospectus by reference.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ --------------------------------------------------
1997(A) 1996 1996 1995 1994(B) 1993(C) 1992
------- -------- -------- -------- -------- ------- ------
(UNAUDITED)
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Oil and gas................................ $ 349.0 $ 283.3 $ 396.9 $ 375.7 $ 337.6 $ 207.2 $ 135.1
Natural gas processing..................... -- 16.8 23.8 33.2 39.2 77.5 54.6
Gas marketing.............................. -- -- -- 76.8 103.0 43.8 12.1
Interest and other......................... 3.7 15.0 17.5 11.4 6.9 4.4 4.2
Gain on disposition of assets, net(d)...... 2.7 96.9 97.1 16.6 9.5 23.2 4.2
-------- -------- -------- -------- -------- -------- -------
355.4 412.0 535.3 513.7 496.2 356.1 210.2
-------- -------- -------- -------- -------- -------- -------
Costs and expenses:
Oil and gas production..................... 91.7 82.2 110.3 130.9 127.1 78.3 51.8
Natural gas processing..................... -- 9.1 12.5 25.9 33.6 51.6 38.6
Gas marketing.............................. -- -- -- 75.7 101.5 42.8 11.0
Depletion, depreciation and amortization... 126.9 86.2 112.1 159.1 145.4 80.4 45.6
Impairment of oil and gas properties and
natural gas processing facilities........ -- -- -- 130.5 -- -- --
Exploration and abandonments............... 34.3 15.0 23.0 27.5 25.2 3.6 4.5
General and administrative................. 31.8 19.5 28.4 37.4 29.0 23.8 11.6
Interest................................... 44.2 36.1 46.2 65.4 50.6 23.3 14.7
Other...................................... 3.0 .9 2.5 11.3 4.3 3.9 2.3
-------- -------- -------- -------- -------- -------- -------
331.9 249.0 335.0 663.7 516.7 307.7 180.1
-------- -------- -------- -------- -------- -------- -------
Income (loss) before income taxes,
extraordinary item and cumulative effect of
accounting change.......................... 23.5 163.0 200.3 (150.0) (20.5) 48.4 30.1
Income tax benefit (provision)............... (8.5) (47.2) (60.1) 45.9 6.5 (17.0) (3.0)
-------- -------- -------- -------- -------- -------- -------
Income (loss) before extraordinary item and
cumulative effect of accounting change..... 15.0 115.8 140.2 (104.1) (14.0) 31.4 27.1
Extraordinary item........................... (1.5) -- -- 4.3 (.6) -- --
Cumulative effect of accounting change....... -- -- -- -- -- 17.1 --
-------- -------- -------- -------- -------- -------- -------
Net income (loss)............................ $ 13.5 $ 115.8 $ 140.2 $ (99.8) $ (14.6) $ 48.5 $ 27.1
======== ======== ======== ======== ======== ======== =======
OTHER FINANCIAL DATA:
EBITDAEX(e).................................. $ 228.9 $ 300.3 $ 381.7 $ 232.5 $ 200.7 $ 155.7 $ 95.0
Cash flows from operating activities......... 179.1 189.4 230.1 157.3 129.8 112.2 77.2
Cash flows from investing activities......... (244.1) 90.2 13.7 (53.3) (446.0) (398.2) (111.8)
Cash flows from financing activities......... 87.0 (232.2) (245.4) (107.9) 331.4 278.9 33.8
Capital expenditures......................... 256.5 144.1 227.8 228.4 554.9 583.5 129.7
Ratio of earnings to fixed charges(f)........ 1.5 5.4 5.3 (f) (f) 3.0 2.9
BALANCE SHEET DATA (END OF PERIOD):
Working capital.............................. $ 49.4 $ 47.6 $ 26.1 $ 31.5 $ 43.7 $ 39.5 $ 8.0
Property, plant and equipment, net........... 3,524.0 998.3 1,040.4 1,121.7 1,349.9 802.0 499.1
Total assets................................. 3,769.7 1,178.7 1,199.9 1,319.2 1,604.9 1,016.9 576.7
Long-term obligations........................ 1,728.8 325.2 329.0 603.2 727.2 544.3 225.9
Preferred stock of subsidiary................ -- 188.8 188.8 188.8 188.8 -- --
Total stockholders' equity................... 1,718.1 524.3 530.3 411.0 509.6 348.8 295.0
</TABLE>
- ---------------
(a) Includes amounts relating to the acquisition of Mesa beginning August 1,
1997.
(b) Includes amounts relating to the acquisition of Bridge Oil Limited in July
1994 and the acquisition of properties from PG&E Resources Company in August
1994.
(c) Includes amounts relating to the acquisition of certain Prudential-Bache
Energy limited partnerships in July 1993. Also includes results of
operations related to the Company's interest in the Carthage gas processing
plant that had been deferred in 1992 and 1993 and the gain of $7.3 million
recognized on the sale of that interest on June 30, 1993.
(d) Includes a gain of $83.3 million in 1996 related to the disposition of
certain wholly-owned subsidiaries.
(e) EBITDAEX is presented because the Company believes it to be a commonly used
financial indicator of a company's ability to service or incur debt.
EBITDAEX (as used herein) is calculated by adding interest, income taxes,
depletion, depreciation and amortization, impairment of oil and gas
properties and natural gas processing facilities and exploration and
abandonment costs to income (loss) before extraordinary item and cumulative
effect of accounting change. Interest includes accrued interest expense and
amortization of deferred financing costs. EBITDAEX should not be considered
as an alternative to income (loss) or operating income (loss), as defined by
generally accepted accounting principles, as an indicator of the Company's
financial performance, as an alternative to cash flow, as a measure of
liquidity or as being comparable to other similarly titled measures of other
companies.
S-8
<PAGE> 11
(f) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes, extraordinary item and
cumulative effect of account change plus fixed charges net of interest
capitalized. Fixed charges consist of interest expense, interest capitalized
and the portion of rental expense attributable to interest. The Company's
1995 and 1994 earnings were inadequate to cover its fixed charges. The
amount of the deficiencies were $150.0 million in 1995 and $20.5 million in
1994.
THE GUARANTOR
The following table sets forth selected consolidated financial data of
Pioneer USA for the nine months ended September 30, 1997, and for the period
ended December 31, 1996. The following data should be read in conjunction with
Pioneer USA's "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Pioneer USA's consolidated financial statements and
notes thereto contained in the reports incorporated in the Prospectus by
reference.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1997(A) 1996
------------- ------------
(UNAUDITED)
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Oil and gas............................................. $ 349.0 $ 396.9
Natural gas processing.................................. -- 23.8
Gas marketing........................................... -- --
Interest and other...................................... 3.7 17.5
Gain on disposition of assets, net(b)................... 2.7 97.1
------- --------
355.4 535.3
------- --------
Costs and expenses:
Oil and gas production.................................. 91.7 110.3
Natural gas processing.................................. -- 12.5
Depletion, depreciation and amortization................ 126.9 112.1
Impairment of oil and gas properties and natural gas
processing facilities................................. -- --
Exploration and abandonments............................ 34.3 23.0
General and administrative.............................. 31.7 28.4
Interest................................................ 44.2 46.2
Other................................................... 3.0 2.5
------- --------
331.8 335.0
------- --------
Income before income taxes, extraordinary item and
cumulative effect of accounting change.................. 23.6 200.3
Income tax provision...................................... (8.5) (60.1)
------- --------
Income before extraordinary item and cumulative effect of
accounting change....................................... 15.1 140.2
Extraordinary item........................................ (1.5) --
Cumulative effect of accounting change.................... -- --
------- --------
Net income................................................ $ 13.6 $ 140.2
======= ========
OTHER FINANCIAL DATA:
EBITDAEX(c)............................................... $ 227.6 $ 381.7
Cash flows from operating activities...................... 184.8 230.1
Cash flows from investing activities...................... (243.6) 13.7
Cash flows from financing activities...................... 80.7 (245.4)
Capital expenditures...................................... 256.5 227.8
Ratio of earnings to fixed charges(d)..................... 1.5 5.3
BALANCE SHEET DATA (END OF PERIOD):
Working capital........................................... $ 43.2 $ 26.1
Property, plant and equipment, net........................ 3,524.0 1,040.4
Total assets.............................................. 3,769.7 1,199.9
Long-term obligations:
Long term debt(e)....................................... 1,601.2 320.9
Other noncurrent liabilities............................ 127.6 8.1
Preferred stock of subsidiary............................. -- 188.8
Total stockholders' equity................................ 1,712.0 530.3
</TABLE>
- ---------------
(a) Includes amounts relating to the acquisition of Mesa beginning August 1,
1997.
(b) Includes a gain of $83.3 million in 1996 related to the disposition of
certain wholly-owned subsidiaries.
(c) EBITDAEX is presented because Pioneer USA believes it to be a commonly used
financial indicator of a company's ability to service or incur debt.
EBITDAEX (as used herein) is calculated by adding interest, income taxes,
depletion, depreciation and amortization, impairment of oil and gas
properties and natural gas processing facilities and exploration and
abandonment costs to income (loss) before extraordinary item and cumulative
effect of accounting change. Interest includes accrued interest expense and
amortization of deferred financing costs. EBITDAEX should not be considered
as an alternative to income (loss) or operating
S-9
<PAGE> 12
income (loss), as defined by generally accepted accounting principles, as an
indicator of Pioneer USA's financial performance, as an alternative to cash
flow, as a measure of liquidity or as being comparable to other similarly
titled measures of other companies.
(d) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes, extraordinary item and
cumulative effect of account change plus fixed charges net of interest
capitalized. Fixed charges consist of interest expense, interest capitalized
and the portion of rental expense attributable to interest.
(e) Represents amounts related to the United States Credit Facility, the Mesa
Notes and the Parker & Parsley Notes assumed by the Company in December
1997. Pioneer USA guarantees the United States Credit Facility and the
Parker & Parsley Notes. See "Credit Facility Agreements" and "Assumption of
Certain Debts by the Company" in "Summary -- Recent Developments."
MESA
The following table sets forth the selected financial data of Mesa for each
of the six months ended June 30, 1997 and 1996, and for the five fiscal years in
the period ended December 31, 1996. The following data should be read in
conjunction with Mesa's "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Mesa's consolidated financial
statements and notes thereto contained in the reports incorporated in the
Prospectus by reference.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total operating revenue................... $ 172.1 $ 152.0 $ 311.4 $ 235.0 $ 228.7 $ 222.2 $ 237.1
Total operating expenses.................. 124.1 105.6 214.7 187.0 200.0 200.2 210.9
-------- -------- -------- -------- -------- -------- --------
Operating income.......................... 48.0 46.4 96.7 48.0 28.7 22.0 26.2
-------- -------- -------- -------- -------- -------- --------
Net interest expense(a)................... (47.5) (66.9) (113.4) (132.7) (131.3) (131.3) (129.9)
Other income(b)........................... (2.5) 26.1 25.0 27.1 19.2 6.9 14.5
-------- -------- -------- -------- -------- -------- --------
Income (loss) from continuing
operations(c)........................... $ (2.0) $ 5.6 $ 8.3 $ (57.6) $ (83.4) $ (102.4) $ (89.2)
-------- -------- -------- -------- --------
Dividends on preferred stock.............. (11.1) (9.5)
-------- --------
Income (loss) from continuing operations
applicable to common stock(c)........... $ (13.1) $ (1.2)
======== ========
OTHER FINANCIAL DATA:
EBITDAEX(d)............................... $ 102.7 $ 135.2 $ 228.6 $ 183.4 $ 160.3 $ 142.4 $ 178.1
Cash flows from operating activities...... 87.8 78.6 101.3 69.2 48.6 32.5 (28.4)
Cash flows from investing activities...... (371.7) (19.8) (45.0) (41.4) (40.3) 37.5 (17.0)
Cash flows from financing activities...... 288.0 (33.6) (188.7) (22.1) (3.6) (88.5) (29.5)
Capital expenditures...................... 372.0 19.7 50.2 42.3 32.6 29.6 69.2
Ratio of earnings to fixed charges(e)..... (e) 1.1 (e) (e) (e) (e) (e)
BALANCE SHEET DATA (END OF PERIOD):
Working capital........................... $ 11.9 $ 18.4 $ 14.8 $ 43.8 $ 115.7 $ 76.2 $ 102.9
Property, plant and equipment, net........ 1,351.7 1,048.7 1,046.4 1,104.8 1,130.4 1,191.8 1,280.3
Total assets.............................. 1,505.5 1,413.5 1,213.9 1,486.8 1,484.0 1,533.4 1,676.5
Long-term debt, including current
maturities.............................. 1,108.3 1,201.7 808.1 1,236.7 1,223.3 1,241.3 1,286.2
Stockholders' equity...................... 263.5 73.7 265.5 67.0 124.6 112.1 184.4
</TABLE>
- ---------------
(a) Net interest expense represents total interest expense less interest income.
(b) See "Business of Pioneer -- Management's Discussion and Analysis of
Financial Condition and Results of Operations of Mesa -- Results of
Operations -- Other Income (Expense)" in the definitive proxy statement for
the Chauvco Transaction incorporated in the Prospectus by reference.
(c) Loss from continuing operations excludes a $59.4 million extraordinary loss
on debt extinguishment for 1996. Net loss attributable to common stock was
$60.6 million for the year ended December 31, 1996. Net loss for the years
ended December 31, 1995, 1994, 1993 and 1992 and the six months ended June
30, 1997 and 1996 are the same as loss from continuing operations shown
above.
(d) EBITDAEX is presented because the Company believes it to be a commonly used
financial indicator of a company's ability to service or incur debt.
EBITDAEX (as used herein) is calculated by adding interest, income taxes,
depletion, depreciation and amortization, impairment of oil and gas
properties and exploration costs to loss from continuing operations
applicable to common stock. Interest includes accrued interest expense and
amortization of deferred financing costs. EBITDAEX should not be considered
as an alternative to income (loss) or operating income (loss), as defined by
generally accepted accounting principles, as an indicator of Mesa's
financial performance, as an alternative to cash flow, as a measure of
liquidity or as being comparable to other similarly titled measures of other
companies.
(e) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes, extraordinary item and
cumulative effect of account change plus fixed charges net of interest
capitalized. Fixed charges consist of interest expense, interest capitalized
and the portion of rental expense attributable to interest. Earnings were
inadequate to cover fixed charges for the years ended December 31, 1996
through 1992, by $1.3 million, $58.5 million, $83.5 million, $105.3 million
and $91.6 million, respectively, and for the six months ended June 30, 1997,
by $24.2 million.
S-10
<PAGE> 13
CHAUVCO
The following table sets forth selected financial information of Chauvco
for the nine months ended September 30, 1997 and 1996, and for the five fiscal
years in the period ended December 31, 1996. The following data should be read
in conjunction with Chauvco's "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Chauvco's consolidated financial
statements and notes thereto contained in the reports incorporated in the
Prospectus by reference.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
1997(A) 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
(UNAUDITED)
(IN THOUSANDS OF CANADIAN DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Canadian GAAP
Revenue.............................. C$159,902 C$131,438 C$178,543 C$170,314 C$164,381 C$136,794 C$121,906
Net income........................... 29,879 25,931 34,131 25,425 29,052 28,220 22,726
U.S. GAAP
Revenue.............................. C$159,902 C$131,438 C$178,543 C$170,314 C$164,381 (a) (a)
Net income........................... 32,988 29,437 41,276 33,337 24,562 (a) (a)
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
SEPTEMBER 30, -------------------------------------------------------------
1997 1996 1995 1994 1993 1992
------------- --------- --------- --------- --------- ---------
(UNAUDITED)
(IN THOUSANDS OF CANADIAN DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Canadian GAAP
Working capital (deficiency)....... C$(34,837) C$ (7,441) C$ 7,477 C$ (749) C$(11,872) C$ 631
Total assets....................... 888,454 637,436 590,490 564,652 384,603 332,052
Long-term debt..................... 288,433 127,207 139,087 180,715 51,405 50,303
Shareholders' equity............... 431,194 397,751 362,892 281,442 250,277 219,958
U.S. GAAP
Working capital.................... C$(34,837) C$ (7,441) C$ 7,477 (a) (a) (a)
Total assets....................... 842,022 585,453 526,601 (a) (a) (a)
Long-term debt..................... 288,433 127,207 139,087 (a) (a) (a)
Shareholders' equity............... 405,670 369,118 327,114 (a) (a) (a)
</TABLE>
- ---------------
(a) U.S. GAAP information for these periods is not available.
S-11
<PAGE> 14
SUMMARY HISTORICAL AND PRO FORMA OPERATING DATA
The following table sets forth summary historical and pro forma operating
data of the Company for the periods indicated. The summary pro forma operating
data give effect to the Parker/Mesa Merger, the Chauvco Acquisition, and certain
other transactions as if all those transactions had occurred on January 1, 1996.
The following data should be read in conjunction with the Company's
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's consolidated financial statements and notes
thereto contained in the reports incorporated in the Prospectus by reference.
The historical operating data for the nine months ended September 30, 1997 and
1996, and the pro forma financial data are unaudited.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------------- ------------------------------------------
PRO FORMA PRO FORMA
1997 1997 1996 1996 1996 1995 1994
--------- -------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PRODUCTION:
Oil (MBbls)............................... 16,366 9,425 8,297 19,550 11,275 12,902 12,147
Gas (MMcf)................................ 142,367 71,284 56,825 190,049 75,851 85,295 79,674
Natural gas liquids (MBbls)............... 4,864 1,151 -- 6,460 -- -- --
-------- -------- -------- -------- -------- -------- --------
Total (MBOE)........................ 44,958 22,457 17,768 57,685 23,916 27,118 25,426
-------- -------- -------- -------- -------- -------- --------
AVERAGE DAILY PRODUCTION:
Oil (Bbls)................................ 59,949 34,525 30,282 53,415 30,805 35,348 33,279
Gas (Mcf)................................. 521,492 261,113 207,392 519,259 207,244 233,685 218,285
Natural gas liquids (Bbls)................ 17,818 4,214 -- 17,650 -- -- --
PRICES:
Average oil price (Bbls).................. $ 18.04 $ 18.70 $ 19.62 $ 19.67 $ 19.96 $ 16.96 $ 15.40
Average gas price (per Mcf)............... $ 2.11 $ 2.21 $ 2.12 $ 2.11 $ 2.27 $ 1.84 $ 1.89
Average NGL price (per Bbl)............... $ 14.87 $ 12.89 -- $ 14.93 -- -- --
Production costs per BOE.................... $ 4.04 $ 4.08 $ 4.63 $ 3.80 $ 4.61 $ 4.83 $ 5.00
Depletion................................... $ 6.31 $ 5.40 $ 4.45 $ 6.34 $ 4.30 $ 5.36 $ 5.18
</TABLE>
SUMMARY PRO FORMA RESERVE DATA
The following table sets forth pro forma information regarding changes in
the net quantities of oil and natural gas reserves of the Company for the year
ended December 31, 1996. The pro forma information gives effect to the
Parker/Mesa Merger, the Chauvco Acquisition, and certain other transactions as
if all those transactions had occurred on January 1, 1996. The following data
are qualified in their entirety by, and should be read in conjunction with, the
Company's unaudited pro forma combined financial statements and notes thereto
contained in the Chauvco 8-K which is incorporated in the Prospectus by
reference.
<TABLE>
<CAPTION>
MBBLS
-------------------------------------------
USA ARGENTINA CANADA TOTAL MBOE(A)
--------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
OIL, NATURAL GAS LIQUIDS AND CONDENSATE:
Balance, January 1, 1996.................................. 267,108 15,933 21,895 304,936 304,936
Revisions of previous estimates......................... 31,475 (722) 249 31,002 31,002
Purchase of mineral-in-place............................ 300 -- -- 300 300
New discoveries and extensions.......................... 2,794 1,608 650 5,052 5,052
Production.............................................. (20,497) (1,183) (4,330) (26,010) (26,010)
--------- ------- ------- --------- -------
Balance, December 31, 1996................................ 281,180 15,636 18,464 315,280 315,280
========= ======= ======= ========= =======
</TABLE>
<TABLE>
<CAPTION>
MMCF
-------------------------------------------
USA ARGENTINA CANADA TOTAL MBOE(A)
--------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
GAS:
Balance, January 1, 1996.................................. 1,984,726 322,000 136,264 2,442,990 407,165
Revisions of previous estimates......................... 42,246 (10,860) (5,180) 26,206 4,368
Purchase of mineral-in-place............................ 11,494 -- -- 11,494 1,916
New discoveries and extensions.......................... 30,151 4,588 3,320 38,059 6,343
Production.............................................. (160,729) (16,820) (12,500) (190,049) (31,675)
--------- ------- ------- --------- -------
Balance, December 31, 1996................................ 1,907,888 298,908 121,904 2,328,700 388,117
========= ======= ======= ========= =======
TOTAL MBOE, December 31, 1996(a)............................ 703,397
=======
</TABLE>
- ---------------
(a) Equivalent oil reserves are based on six Mcf of gas per barrel of oil.
S-12
<PAGE> 15
USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby are estimated to
be approximately $594.5 million after deduction of estimated expenses and
underwriting discount. The Company will use the net proceeds to repay existing
bank indebtedness outstanding under (i) its two Amended and Restated Credit
Facility Agreements each dated as of December 18, 1997 (the "United States
Credit Facility"), among the Company, as Borrower, and NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the co-agents signatory thereto and the other
lenders signatory thereto, and (ii) its $100 million note (the "Term Note"),
dated as of December 22, 1997, payable to NationsBank of Texas, N.A. The Company
must pay the amount outstanding, if any, under the Term Note before it may repay
existing bank indebtedness outstanding under the United States Credit Facility.
The United States Credit Facility consists of two credit facility
agreements. The primary facility provides for a $1.075 billion revolving line of
credit with a maturity date of August 7, 2002. The additional facility provides
for a $300 million line of credit with a maturity date of August 5, 1998.
Advances on the United States Credit Facility bear interest, at the borrower's
option, based on (a) the prime rate of NationsBank of Texas, N.A., (b) a
Eurodollar rate (substantially equal to LIBOR), adjusted for the reserve
requirement as determined by the Board of Governors of the Federal Reserve
System with respect to transactions in Eurocurrency liabilities ("LIBOR Rate"),
or (c) a competitive bid rate as quoted by the lenders electing to participate
following the borrower's request. Advances that bear a LIBOR Rate have periodic
maturities, at the borrower's option, of one, two, three, six, nine or twelve
months. Advances that bear competitive bid rates have periodic maturities, at
the borrower's option, of not less than 15 days nor more than 360 days. The
interest rates on LIBOR Rate advances vary with interest rate margins ranging
from 18 basis points to 45 basis points. The interest rate margin is determined
by a grid based upon the long-term public debt rating of the Company's senior
unsecured indebtedness. The Company's obligations are guaranteed by Pioneer USA
and certain other U.S. subsidiaries, and are secured by a pledge of 65% of the
capital stock of certain non-U.S. subsidiaries (including Pioneer Canada). As of
December 31, 1997, the Company had $1.344 billion outstanding under the United
States Credit Facility with an effective interest rate for borrowings of 6.24%
per annum, after giving effect to interest rate swaps. The United States Credit
Facility has been used to refinance the debt of Parker & Parsley and Mesa, to
fund the offer to purchase the Mesa Notes, to fund the acquisition of assets
from ACI and Rockland, and for other general corporate purposes. The Term Note
has a maturity date of April 1, 1999, and bears interest at the borrower's
option at the rates set forth in clauses (a) and (b) of this paragraph. At
December 31, 1997, the Company had $30 million outstanding under the Term Note
with an interest rate of 8.5% per annum. The Term Note has been used to finance
working capital.
NationsBank of Texas, N.A., is an affiliate of NationsBanc Montgomery
Securities LLC, Morgan Guaranty Trust Company of New York is an affiliate of
J.P. Morgan Securities Inc., and The Chase Manhattan Bank is an affiliate of
Chase Securities Inc. Each of these firms will receive 8.64% of the repayment of
borrowings outstanding under the United States Credit Facility from the net
proceeds of the Offering, and NationsBank of Texas, N.A., will receive 100% of
repayment of borrowings under the Term Note. See "Underwriting."
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<PAGE> 16
CAPITALIZATION
The following table sets forth the current maturities of long-term debt and
the capitalization of the Company as of September 30, 1997, (i) on a historical
basis, (ii) on a pro forma basis to give effect to the Chauvco Acquisition, as
though it had occurred on that date, and (iii) on a pro forma basis as adjusted
to reflect the closing of the offer to purchase the Mesa Notes, the Offering,
and the application of the estimated net proceeds from the Offering. This table
should be read in conjunction with the Company's consolidated financial
statements and notes thereto and the Company's unaudited pro forma combined
financial statements and notes thereto contained in the reports incorporated in
the Prospectus by reference.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
--------------------------------------
PRO PRO FORMA
HISTORICAL FORMA(A) AS ADJUSTED
---------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current maturities of long-term debt.................... $ 11,116 $ 16,088 $ 16,088
========== ========== ==========
Long term debt:
United States Credit Facility......................... $ 713,000 $ 743,000 $ 732,677
Canadian Credit Facility.............................. -- 223,227 223,227
The Notes............................................. -- -- 600,000
8 7/8% senior notes due 2005.......................... 150,000 150,000 150,000
8 1/4% senior notes due 2007 (net of discount)........ 149,328 149,328 149,328
10 5/8% senior subordinated notes due 2006............ 369,572 369,571 6,639
11 5/8% senior subordinated discount notes due 2006... 209,481 209,481 17,884
Fixed rate building loan.............................. 9,336 9,336 9,336
Other................................................. 428 428 428
---------- ---------- ----------
Total long-term debt, excluding current
maturities.................................. 1,601,145 1,854,371 1,889,518
---------- ---------- ----------
Stockholders' equity:
Common stock.......................................... 745 994 994
Additional paid-in capital............................ 1,626,487 2,314,571 2,314,571
Unearned compensation................................. (17,316) (17,316) (17,316)
Retained earnings..................................... 108,191 108,191 96,288
---------- ---------- ----------
Total stockholders' equity.................... 1,718,107 2,406,440 2,394,537
---------- ---------- ----------
Total capitalization.......................... $3,319,252 $4,260,811 $4,284,055
========== ========== ==========
</TABLE>
- ---------------
(a) Does not give effect to (i) the acquisition of assets from ACI and Rockland,
or (ii) the divestiture of $103 million in non-strategic properties. See
"Summary -- The Company -- Recent Developments."
DESCRIPTION OF NOTES
GENERAL
The 2008 Notes and the 2028 Notes are separate series of Debt Securities
described in the accompanying Prospectus. The Notes are to be issued and
governed by an Indenture, to be dated as of January , 1998 (the "Indenture"),
between the Company and The Bank of New York, as Trustee (the "Trustee"),
substantially identical to the form of Indenture described in the accompanying
Prospectus.
The following is a summary of certain provisions of the Notes and the
Indenture, a form of which is an exhibit to the registration statement relating
hereto. The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Indenture, including the definitions of
certain terms therein and those terms made a part thereof by the Trust Indenture
Act of 1939.
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<PAGE> 17
2008 NOTES
The 2008 Notes will be unsecured senior obligations of the Company, limited
to $ million aggregate principal amount, and will mature on ,
2008. The 2008 Notes will bear interest at the rate per annum shown on the cover
page hereof from , 1998, or from the most recent date to which
interest has been paid or provided for, payable semiannually to holders of
record at the close of business on the and immediately preceding the
interest payment date on and of each year, commencing ,
1998. The Company will pay interest on overdue principal at 1% per annum in
excess of such rate, and it will pay interest on overdue installments of
interest at such higher rate to the extent lawful. Interest will be paid on the
basis of a 360-day year comprised of twelve 30-day months.
2028 NOTES
The 2028 Notes will be unsecured senior obligations of the Company, limited
to $ million aggregate principal amount, and will mature on ,
2028. The 2028 Notes will bear interest at the rate per annum shown on the cover
page hereof from , 1998, or from the most recent date to which interest
has been paid or provided for, payable semiannually to holders of record at the
close of business on the and immediately preceding the interest
payment date on and of each year, commencing , 1998. The
Company will pay interest on overdue principal at 1% per annum in excess of such
rate, and it will pay interest on overdue installments of interest at such
higher rate to the extent lawful. Interest will be paid on the basis of a
360-day year comprised of twelve 30-day months.
GUARANTEES
The obligations of the Company under the Indenture will be unconditionally
guaranteed on an unsecured basis by Pioneer USA. The Guarantees will terminate
if the Guarantor is released from its guarantees of the Company's United States
Credit Facility. The Guarantees are not required to be reinstated if the
Guarantor's guarantees of the United States Credit Facility are subsequently
reinstated or if the Guarantor guarantees or incurs other debt. The Guarantor
may not consolidate or merge with or into any person unless either (i) the
Guarantor shall be the continuing person in the case of merger, or (ii) the
resulting, surviving or transferee person, if other than the Guarantor, shall be
a corporation organized and existing under the laws of the United States, any
State, or the District of Columbia and shall expressly assume all of the
obligations of the Guarantor under the Guarantees.
Pioneer USA is a direct, wholly-owned subsidiary of the Company and owns
substantially all of the United States onshore and offshore properties of the
Company. Pioneer USA has no borrowed money obligations other than for a $9.1
million secured building loan and certain capitalized lease obligations and has
no guarantees of other borrowed money obligations except as guarantor of the
Notes, the United States Credit Facility, and the Parker & Parsley Notes.
Although Holders of the Notes will be direct creditors of the Guarantor by
virtue of the Guarantees, existing or future creditors of the Guarantor, a
trustee in bankruptcy, or the Guarantor as debtor-in-possession could avoid or
subordinate the Guarantees under fraudulent conveyance laws if it were
successful in establishing that (i) the Guarantees were incurred with intent to
hinder, delay or defraud any present or future creditor, or (ii) the Guarantor
did not receive fair consideration or reasonably equivalent value for issuing
the Guarantees and that it (a) was insolvent at the time of the issuance, (b)
was rendered insolvent by reason of the issuance, (c) was engaged in a business
or transaction for which its assets constituted unreasonably small capital to
carry on its business, or (d) intended to incur, or believed that it would
incur, debts beyond its ability to pay such debts as they matured. Among other
things, a legal challenge of the Guarantees on fraudulent conveyance grounds may
focus on the benefits, if any, realized by the Guarantor as a result of the
issuance by the Company of the Notes. To the extent the Guarantees were avoided
as fraudulent conveyances or held unenforceable for any other reason, the
Holders of the Notes would cease to have any claim in respect of the Guarantor,
would be creditors solely of the Company, and may be required to return all
amounts received pursuant to the avoided Guarantees.
S-15
<PAGE> 18
The measure of insolvency for purposes of the foregoing will vary depending
upon the law of the jurisdiction that is being applied. Generally, however, a
company would be considered insolvent if the sum of its debts is greater than
all of its property at a fair valuation, or if the present fair saleable value
of its assets is less than the amount that will be required to pay its probable
liability on its existing debts as they become absolute and matured.
No other direct or indirect subsidiary of the Company will be a guarantor
of the Notes.
RANKING
The Notes will be general unsecured obligations of the Company ranking pari
passu in right of payment with all other senior unsecured indebtedness of the
Company and will be senior in right of payment to all existing and future
subordinated indebtedness of the Company. At December 31, 1997, after giving
effect to the Offering and the application of estimated net proceeds therefrom,
the Company would have had approximately $1.1 billion of indebtedness for
borrowed money ranking pari passu in right of payment with the Notes. The Notes
will be effectively subordinated in right of payment to all existing and future
secured indebtedness of the Company to the extent of the value of the assets
securing such indebtedness. The Company's $1.375 billion United States Credit
Facility is secured by a pledge of 65% of the outstanding stock of certain of
the Company's non-U.S. subsidiaries, including Pioneer Canada (the "Pledged
Stock"). Accordingly, the Notes will be effectively subordinated to any
indebtedness under the United States Credit Facility to the extent of the value
of the Pledged Stock. If an event of default occurs under the United States
Credit Facility, the lenders under the United States Credit Facility may
foreclose upon the Pledged Stock to the exclusion of the Holders of the Notes,
notwithstanding the existence of any event of default under the Indenture. In
that event, the Pledged Stock would first be used to repay in full amounts
outstanding under the United States Credit Facility, resulting in the Pledged
Stock being unavailable to satisfy the claims of Holders of the Notes and other
unsecured indebtedness.
The Company is a holding company that conducts all its operations through
subsidiaries, and the Notes will be effectively subordinated to all obligations
of the Company's subsidiaries that are not guarantors of the Notes, including
the claims of the lenders against guarantors of the United States Credit
Facility and the claims of the lenders against Chauvco and guarantors under the
Canadian Credit Facility. At December 31, 1997, after giving effect to the
Offering and the application of the estimated net proceeds therefrom, the
Company's subsidiaries that are not guarantors of the Notes, including Pioneer
Canada and Chauvco, would have had approximately $248.3 million of indebtedness
for borrowed money. If Pioneer USA's guarantees of the United States Credit
Facility are terminated, the Guarantees will also terminate. The Indenture does
not require the Guarantees to be reinstated if Pioneer USA's guarantees of the
United States Credit Facility are subsequently reinstated or if Pioneer USA
guarantees or incurs other debt. If Pioneer USA's guarantees of the United
States Credit Facility are subsequently reinstated or if Pioneer USA
subsequently guarantees or incurs other debt, the Notes would be effectively
subordinated to the United States Credit Facility or such debt or guarantees to
the extent of the value of such debt or guarantees of Pioneer USA unless Pioneer
USA voluntarily provides a new guarantee of the Notes. The United States Credit
Facility is also guaranteed by certain other subsidiaries of the Company that
are not guaranteeing the Notes, and the Notes will be effectively subordinated
to the United States Credit Facility to the extent of the value of such
guarantees. The Indenture does not restrict the ability of any subsidiaries to
incur additional liabilities, including indebtedness under and guarantees of
bank credit facilities, in the future. The Company's subsidiaries may also have
other liabilities, including contingent liabilities, which could be substantial.
Substantially all of the Company's operating income and cash flow is
generated by its subsidiaries. As a result, funds necessary to meet the
Company's debt service obligations are provided in part by distributions or
advances from its subsidiaries. Under certain circumstances, contractual and
legal restrictions, as well as the financial condition and operating
requirements of the Company's subsidiaries, could limit the Company's ability to
obtain cash from its subsidiaries for the purpose of meeting its debt service
obligations, including the payment of principal and interest on the Notes.
S-16
<PAGE> 19
The Guarantees will be general unsecured obligations of the Guarantor
ranking pari passu in right of payment with all other senior unsecured
indebtedness of the Guarantor and will be senior in right of payment to any
subordinated indebtedness of the Guarantor. The Guarantor has guaranteed the
United States Credit Facility and the Parker & Parsley Notes, which guarantees
will be pari passu with the Guarantees. The Guarantees will be effectively
subordinated in right of payment to any secured indebtedness of the Guarantor to
the extent of the value of the assets securing such indebtedness. The Guarantees
could also be effectively subordinated to all the obligations of the Guarantor
under certain circumstances. See "Description of Notes -- Guarantees."
OPTIONAL REDEMPTION
The Notes of each series will be redeemable at any time, at the option of
the Company, in whole or from time to time in part, upon not less than 30 and
not more than 60 days' notice as provided in the Indenture, on any date prior to
their respective maturity (the "Redemption Date") at a price equal to 100% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on an interest payment date that is on or
prior to the Redemption Date) plus a Make-Whole Premium, if any (the "Redemption
Price"). In no event will a Redemption Price ever be less than 100% of the
principal amount of the relevant Notes plus accrued and unpaid interest, if any,
to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Note (or portion
thereof) to be redeemed will be equal to the excess, if any, of :
(i) the sum of the present values, calculated as of the Redemption
Date, of:
(A) each interest payment that, but for such redemption, would have
been payable on the Note (or portion thereof) being redeemed on
each interest payment date occurring after the Redemption Date
(excluding any accrued interest for the period prior to the
Redemption Date); and
(B) the principal amount that, but for such redemption, would have
been payable at the final maturity of the Note (or portion
thereof) being redeemed; over
(ii) the principal amount of the Note (or portion thereof) being
redeemed.
The present values of interest and principal payments referred to in clause
(i) above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a discount rate equal to the Treasury Yield (as defined below) plus
basis points in the case of the 2008 Notes and the Treasury Yield plus
basis points in the case of the 2028 Notes.
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided that
if the Company fails to make such appointment at least 45 business days prior to
the Redemption Date, or if the institution so appointed is unwilling or unable
to make such calculation, such calculation will be made by Salomon Brothers Inc
or, if such firm is unwilling or unable to make such calculation, by an
independent investment banking institution of national standing appointed by the
Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means
a rate of interest per annum equal to the weekly average yield to maturity of
United States Treasury Notes that have a constant maturity that corresponds to
the remaining term to maturity of the applicable Notes, calculated to the
nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield will be
determined as of the third business day immediately preceding the applicable
Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by the
Federal Reserve Bank of New York and designated "H.15 (519)
S-17
<PAGE> 20
Selected Interest Rates" or any successor release (the "H.15 Statistical
Release"). If the H.15 Statistical Release sets forth a weekly average yield for
United States Treasury Notes having a constant maturity that is the same as the
Remaining Term, then the Treasury Yield will be equal to such weekly average
yield. In all other cases, the Treasury Yield will be calculated by
interpolation, on a straight-line basis, between the weekly average yields on
the United States Treasury Notes that have a constant maturity closest to and
greater than the Remaining Term and the United States Treasury Notes that have a
constant maturity closest to and less than the Remaining Term (in each case as
set forth in the H.15 Statistical Release). Any weekly average yields so
calculated by interpolation will be rounded to the nearest 1/100th of 1%, with
any figure of 1/200th of 1% or above being rounded upward. If weekly average
yields for United States Treasury Notes are not available in the H.15
Statistical Release or otherwise, then the Treasury Yield will be calculated by
interpolation of comparable rates selected by the Independent Investment Banker.
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Note of $1,000 in original principal amount or less
shall be redeemed in part. If any Note is to be redeemed in part only, the
notice of redemption relating to such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in principal amount equal to
the unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Note.
SINKING FUND
There will be no mandatory sinking fund payments for the Notes.
BOOK-ENTRY, DELIVERY AND FORM
Except as described below, the Notes sold will initially be issued in the
form of two or more global notes (the "Global Notes"). The Global Notes will be
deposited with, or on behalf of, The Depository Trust Company (the "Depositary")
and registered in the name of the Depositary or its nominee. Except as set forth
below, the Global Notes may be transferred, in whole and not in part, only to
the Depositary or another nominee of the Depositary. Investors may hold their
beneficial interests in the Global Notes directly through the Depositary if they
have an account with the Depositary or indirectly through organizations which
have accounts with the Depositary.
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities of institutions that have accounts
with the Depositary ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, including the
Underwriters, banks, trust companies, clearing corporations and certain other
organizations, some of which (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Upon the issuance by the Company of Notes represented by the Global Notes,
the Depositary or its nominee will credit, on its book-entry registration and
transfer system, the principal amount of the Notes represented by such Global
Notes to the accounts of participants. The accounts to be credited shall be
designated by the Underwriters. Ownership of beneficial interests in the Notes
represented by Global Notes will be limited to participants or persons that hold
interests through participants. Ownership of such beneficial interests in Notes
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depositary (with respect to participants'
interest) and such participants (with respect to the owners of beneficial
interests in the Global Notes other than participants). The laws of some
jurisdictions may
S-18
<PAGE> 21
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability to transfer or
pledge beneficial interests in Notes represented by Global Notes.
So long as the Depositary, or its nominee, is the registered holder and
owner of the Global Notes, the Depositary or such nominee, as the case may be,
will be considered the sole legal owner and holder of the related Notes for all
purposes of such Notes and the Indenture. Except as set forth below, owners of
beneficial interests in the Global Notes will not be entitled to have the Notes
represented by the Global Notes registered in their names, will not receive or
be entitled to receive physical delivery or certificated Notes in definitive
form and will not be considered to be the owners or holders of any Notes under
the Indenture. The Company understands that under existing industry practice, in
the event an owner of a beneficial interest in the Global Notes desires to take
any action that the Depositary, as the holder of the Global Notes, is entitled
to take, the Depositary would authorize the participants to take such action,
and that the participants would authorize beneficial owners owning through such
participants to take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Payment of principal of and interest on Notes represented by Global Notes
registered in the name of and held by the Depositary or its nominee will be made
by the Company through the Paying Agent (as defined in the Indenture) to the
Depositary or its nominee, as the case may be, as the registered owner and
Holder of such Global Notes.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal of or interest on the Notes represented by Global Notes,
will credit participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the Global
Notes as shown on the records of the Depositary or its nominee. The Company also
expects that payments by participants to owners of beneficial interests in the
Notes represented by Global Notes held through such participants will be
governed by standing instructions and customary practices and will be the
responsibility of such participants. The Company will not have any
responsibility or liability for any aspect of the records relating to, or
payments made on amount of, beneficial ownership interests in the Notes
represented by Global Notes or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests or for any other aspect
of the relationship between the Depositary and its participants or the
relationship between such participants and the owners of beneficial interests in
the Notes represented by Global Notes owned through such participants.
Unless and until they are exchanged in whole or in part for certificated
Notes in definitive form, the Global Notes may not be transferred except as a
whole by the Depositary to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
Although the Depositary has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Notes represented by Global Notes among
participants of the Depositary, it is under no obligation to perform or continue
to perform such procedures, and such procedures may be discontinued at any time.
Neither the Trustee nor the Company will have any responsibility for the
performance by the Depositary or its participants or indirect participants of
their respective obligations under the rules and procedures governing their
operations.
CERTIFICATED NOTES
The Notes represented by the Global Notes are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of U.S.
$1,000 and integral multiples thereof if (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for the Global Notes or
if at any time the Depositary ceases to be a clearing agency registered under
the Exchange Act and a successor Depositary is not appointed by the Company
within 90 days, (ii) the Company in its discretion at any time determines not to
have all of the Notes represented by the Global Notes, (iii) an Event of Default
has occurred and is continuing, or (iv) upon the occurrence of certain other
events. Any Note that is exchangeable pursuant to the preceding sentence is
exchangeable for certificated Notes issuable in authorized denominations and
registered in such names as the Depositary shall direct. Subject to the
foregoing, the Global Notes
S-19
<PAGE> 22
are not exchangeable, except for a Global Note of the same aggregate
denomination to be registered in the name of the Depositary or its nominee.
SAME-DAY PAYMENT
The Indenture will require that payments in respect of Notes (including
principal, premium and interest) be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof or, if no such
account is specified, by mailing a check to each such Holder's registered
address.
CERTAIN COVENANTS
The Indenture will not limit the amount of indebtedness or other
obligations that may be incurred by the Company and its subsidiaries and will
not contain provisions that would give holders of the Notes the right to require
the Company to repurchase their Notes in the event of a decline in the credit
rating of the Company's debt securities or upon a change of control of the
Company. The Indenture will contain covenants including, among others, the
following:
Limitation on Liens. The Company will not, and will not permit any of
its Subsidiaries to, create or permit to exist any Liens upon any Principal
Property or any shares of stock or Indebtedness of any Subsidiary that owns
or leases any Principal Property (whether such Principal Property, shares
of stock or indebtedness are now owned or hereafter acquired) unless all
payments due under the Indenture with respect to the Notes are secured on
an equal and ratable basis with the obligations so secured until such time
as such obligations are no longer secured by a Lien. The preceding sentence
will not require the Company to secure the Notes if the Liens consist of
either (a) Permitted Liens or (b) Liens securing excepted indebtedness as
described below.
Limitation on Sale and Leaseback Transactions. Neither the Company nor
any Subsidiary will enter into any Sale and Leaseback Transaction with
respect to any Principal Property unless either (a) the Company or such
Subsidiary would be entitled, pursuant to the provisions of the Indenture,
to incur Indebtedness secured by a Lien on the property to be leased
without equally and ratably securing the Notes pursuant to the covenant
described above in "Limitation on Liens," or (b) the Company, within six
months after the effective date of such transaction, applies to the
voluntary defeasance or retirement of its funded debt an amount equal to
the Attributable Indebtedness of such transaction.
Excepted Indebtedness. Notwithstanding the foregoing limitations on
Liens and Sale and Leaseback Transactions, the Company and its Subsidiaries
may issue, assume, or guarantee Indebtedness secured by a Lien without
securing the Notes, or may enter into Sale and Leaseback Transactions
without defeasing or retiring funded debt, or enter into a combination of
such transactions, if the sum of the principal amount of all such
Indebtedness and the Attributable Indebtedness of all such Sale and
Leaseback Transactions does not at any time exceed 15% of Adjusted
Consolidated Net Tangible Assets.
TRANSFER
The Notes will be issued in registered form and will be transferable only
upon the surrender of the Notes being transferred for registration of transfer.
The Company may require payment of a sum sufficient to cover any tax, assessment
or other governmental charge payable in connection with certain transfers and
exchanges.
CONCERNING THE TRUSTEE
The Bank of New York is to be the Trustee under the Indenture and has been
appointed by the Company as Registrar and Paying Agent with regard to the Notes.
The Company may have banking relationships in the ordinary course of business
with The Bank of New York.
S-20
<PAGE> 23
CERTAIN DEFINITIONS
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination, the remainder of:
(a) the sum of (i) discounted future net revenues from proved oil and
gas reserves of the Company and its Subsidiaries calculated in accordance
with SEC guidelines before any provincial, territorial, state, Federal or
foreign income taxes, as estimated by the Company in a reserve report
prepared as of the end of the Company's most recently completed fiscal year
for which audited financial statements are available, as increased by, as
of the date of determination, the estimated discounted future net revenues
from (A) estimated proved oil and gas reserves acquired since such year
end, which reserves were not reflected in such year end reserve report, and
(B) estimated oil and gas reserves attributable to upward revisions of
estimates of proved oil and gas reserves since such year end due to
exploration, development or exploitation activities, in each case
calculated in accordance with SEC guidelines (utilizing the prices utilized
in such year end reserve report), and decreased by, as of the date of
determination, the estimated discounted future net revenues from (C)
estimated proved oil and gas reserves produced or disposed of since such
year end, and (D) estimated oil and gas reserves attributable to downward
revisions of estimates of proved oil and gas reserves since such year end
due to changes in geological conditions or other factors which would, in
accordance with standard industry practice, cause such revisions, in each
case calculated on a pre-tax basis and substantially in accordance with SEC
guidelines (utilizing the prices utilized in such year end reserve report),
in each case as estimated by the Company's petroleum engineers or any
independent petroleum engineers engaged by the Company for that purpose;
(ii) the capitalized costs that are attributable to oil and gas properties
of the Company and its Subsidiaries to which no proved oil and gas reserves
are attributable, based on the Company's books and records as of a date no
earlier than the date of the Company's latest available annual or quarterly
financial statements, (iii) the Net Working Capital on a date no earlier
than the date of the Company's latest annual or quarterly financial
statements, and (iv) the greater of (A) the net book value on a date no
earlier than the date of the Company's latest annual or quarterly financial
statement, and (B) the appraised value, as estimated by independent
appraisers, of other tangible assets of the Company and its Subsidiaries,
as of the date no earlier than the date of the Company's latest audited
financial statements; minus
(b) the sum of (i) Minority Interests; (ii) any net gas balancing
liabilities of the Company and its Subsidiaries reflected in the Company's
latest audited financial statements; (iii) to the extent included in (a)(i)
above, the discounted future net revenues, calculated in accordance with
SEC guidelines (utilizing the prices utilized in the Company's year end
reserve report), attributable to reserves which are required to be
delivered to third parties to fully satisfy the obligations of the Company
and its Subsidiaries with respect to Volumetric Production Payments
(determined, if applicable, using the schedules specified with respect
thereto); and (iv) the discounted future net revenues, calculated in
accordance with SEC guidelines, attributable to reserves subject to
Dollar-Denominated Production Payments which, based on the estimates of
production and price assumptions included in determining the discounted
future net revenues specified (a)(i) above, would be necessary to fully
satisfy the payment obligations of the Company and its Subsidiaries with
respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto).
If the Company changes its method of accounting from the successful efforts
method to the full cost or a similar method of accounting, "Adjusted
Consolidated Net Tangible Assets" will continue to be calculated as if the
Company were still using the successful efforts method of accounting.
"Attributable Indebtedness" with respect to a Sale and Leaseback
Transaction means, as of the time of determination, (i) if the obligation with
respect to such Sale and Leaseback Transaction is a Capitalized Lease
Obligation, the amount equal to the capitalized amount of such obligation
determined in accordance with GAAP and included in the financial statements of
the lessee or (ii) if the obligation with respect to such Sale and Leaseback
Transaction is not a Capitalized Lease Obligation, the amount equal to the total
Net Amount of Rent required to be paid by the lessee under such lease during the
remaining term thereof (including any period for which the lease has been
extended), discounted from the respective due dates
S-21
<PAGE> 24
thereof to such determination date at the rate per annum borne by the applicable
series of Notes compounded semiannually.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commodity Price Protection Agreement" means, in respect of any Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Consolidated Net Worth" of any Person means the stockholders' equity of
such Person and its Subsidiaries, as determined on a consolidated basis in
accordance with GAAP, less (to the extent included in stockholders' equity)
amounts attributable to Redeemable Stock of such Person or its Subsidiaries.
"Currency Exchange Protection Agreement" means, in respect of any Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Exchange Act" means the Securities Exchange Act of 1934.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in (i)
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession, and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Government Contract Lien" means any Lien required by any contract,
statute, regulation or order in order to permit the Company or any of its
Subsidiaries to perform any contract or subcontract made by it with or at the
request of the United States or any State thereof or any department, agency or
instrumentality of either or to secure partial, progress, advance or other
payments by the Company or any of its Subsidiaries to the United States or any
State thereof or any department, agency or instrumentality of either pursuant to
the provisions of any contract, statute, regulation or order.
"Guarantor" means Pioneer Natural Resources USA, Inc. with respect to the
2008 Notes and the 2028 Notes.
"Hedging Obligation" of any Person means an obligation of such Person
pursuant to any Interest Rate Protection Agreement, Currency Exchange Protection
Agreement, Commodity Price Protection Agreement or other similar agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication: (i) any liability, contingent or otherwise, of
such Person (A) for borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by a note, bond, debenture or similar instrument, or (C) for the
payment of money relating to a Capitalized Lease Obligation or other obligation
(whether issued or assumed) relating to the deferred purchase price of property;
(ii) all conditional sale obligations and all obligations under any title
retention agreement (even if
S-22
<PAGE> 25
the rights and remedies of the seller under such agreement in the event of
default are limited to repossession or sale of such property); (iii) all
obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction other than entered into in the
ordinary course of business; (iv) all indebtedness of others secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on any asset or property (including,
without limitation, leasehold interests and any other tangible or intangible
property) of such Person, whether or not such indebtedness is assumed by such
Person or is not otherwise such Person's legal liability; provided that if the
obligations so secured have not been assumed in full by such Person or are
otherwise not such Person's legal liability in full, the amount of such
indebtedness for the purposes of this definition shall be limited to the lesser
of the amount of such indebtedness secured by such Lien or the fair market value
of the assets of the property securing such lien; (v) all indebtedness of others
(including all interest and dividends on any Indebtedness or Preferred Stock of
any other Person for the payment of which is) guaranteed, directly or
indirectly, by such Person or that is otherwise its legal liability or which
such Person has agreed to purchase or repurchase or in respect of which such
Person has agreed contingently to supply or advance funds; and (vi) to the
extent not otherwise included in this definition, obligations in respect of
Hedging Obligations. Indebtedness shall not include (a) accounts payable arising
in the ordinary course of business, and (b) any obligations in respect of
prepayments for gas or oil production or gas or oil imbalances.
"Interest Rate Protection Agreement" means, in respect of any Person, any
interest rate swap agreement, interest rate option agreement, interest rate cap
agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Issue Date" means the date on which the Notes are originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien,
charge or adverse claim affecting title or resulting in an encumbrance against
real or personal property or a security interest of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof or any filing or agreement to file a financing statement as
debtor under the Uniform Commercial Code or any similar statute other than to
reflect ownership by a third party of property leased to the Company or any of
its Subsidiaries under a lease that is not in the nature of a conditional sale
or title retention agreement).
"Minority Interest" means the percentage interest represented by any shares
of stock of any class of a Subsidiary that are not owned by the Company or a
Subsidiary.
"Net Amount of Rent" as to any lease for any period means the aggregate
amount of rent payable by the lessee with respect to such period after excluding
amounts required to be paid on account of maintenance and repairs, insurance,
taxes, assessments, water rates and similar charges. In the case of any lease
that is terminable by the lessee upon the payment of a penalty, such net amount
shall also include the amount of such penalty, but no rent shall be considered
as payable under such lease subsequent to the first date upon which it may be so
terminated.
"Net Working Capital" means (a) all current assets of the Company and its
Subsidiaries, less (b) all current liabilities of the Company and its
Subsidiaries, except current liabilities included in Indebtedness, in each case
as set forth in consolidated financial statements of the Company prepared in
accordance with GAAP.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government bonds
to secure performance, surety or appeal bonds to which such Person is a party or
which are otherwise required of such Person, or deposits as security for
contested taxes or import duties or for the payment of rent or other obligations
of like nature, in each case incurred in the ordinary course of business; (b)
Liens imposed by law, such as carriers', warehousemen's, laborers',
materialmen's, landlords', vendors', workmen's, operators', producers'
(including those arising pursuant to Article 9.319 of the
S-23
<PAGE> 26
Texas Uniform Commercial Code or other similar statutory provisions of other
states with respect to production purchased from others) and mechanics' Liens,
in each case for sums not yet due or being contested in good faith by
appropriate proceedings; (c) Liens for property taxes, assessments and other
governmental charges or levies not yet delinquent or subject to penalties for
nonpayment or which are being contested in good faith by appropriate
proceedings; (d) minor survey exceptions, minor encumbrances, easements or
reservations of or with respect to, or rights of others for or with respect to,
licenses, rights-of-way, sewers, electric and other utility lines and usages,
telegraph and telephone lines, pipelines, surface use, operation of equipment,
permits, servitudes and other similar matters or zoning or other restrictions as
to the use of real property or Liens incidental to the conduct of the business
of such Person or to the ownership of its properties which were not Incurred in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of such properties or materially impair their use in
the operation of the business of such Person; (e) Liens existing on or provided
for under the terms of agreements existing on the date the Notes are issued
(including the United States Credit Facility and the Canadian Credit Facility);
(f) Liens on property or assets of, or any shares of stock of or secured debt
of, any Person at the time the Company or any of its Subsidiaries acquired the
property or the Person owning such property, including any acquisition by means
of a merger or consolidation with or into the Company or any of its
Subsidiaries; (g) Liens securing a Hedging Obligation so long as such Hedging
Obligation is of the type customarily entered into in connection with, and is
entered into for the purpose of, limiting risk; (h) Liens upon specific
properties of the Company or any of its Subsidiaries securing Indebtedness
incurred in the ordinary course of business to provide all or part of the funds
for the exploration, drilling or development of those properties; (i) Purchase
Money Liens; (j) Liens securing only Indebtedness of a wholly-owned Subsidiary
of the Company to the Company or to one or more wholly-owned Subsidiaries of the
Company; (k) Liens on any property to secure bonds for the construction,
installation or financing of pollution control or abatement facilities or other
forms of industrial revenue bond financing or Indebtedness issued or Guaranteed
by the United States, any state or any department, agency or instrumentality
thereof; (l) Government Contract Liens; (m) Liens in respect of Production
Payments and Reserve Sales; (n) Liens resulting from the deposit of funds or
evidences of Indebtedness in trust for the purpose of defeasing Indebtedness of
the Company or any of its Subsidiaries; (o) legal or equitable encumbrances
deemed to exist by reason of negative pledges or the existence of any litigation
or other legal proceeding and any related lis pendens filing (excluding any
attachment prior to judgment, judgment lien or attachment lien in aid of
execution on a judgment); (p) rights of a common owner of any interest in
property held by such Person; (q) farmout, carried working interest, joint
operating, unitization, royalty, overriding royalty, sales and similar
agreements relating to the exploration or development of, or production from,
oil and gas properties entered into in the ordinary course of business; (r) any
defects, irregularities or deficiencies in title to easements, rights-of-way or
other properties that do not in the aggregate materially adversely affect the
value of such properties or materially impair their use in the operation of the
business of such Person; and (s) Liens to secure any refinancing, refunding,
extension, renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements), as a whole or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses (e)
through (m); provided, however, that (i) such new Lien shall be limited to all
or part of the same property that secured the original Lien, plus improvements
on such property, and (ii) the Indebtedness secured by such Lien at such time is
not increased to any amount greater than the sum of (A) the outstanding
principal amount or, if greater, committed amount of the Indebtedness described
under clauses (e) through (m) at the time the original Lien became a Permitted
Lien and (B) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancing, refunding, extension, renewal or
replacement.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
S-24
<PAGE> 27
"Principal Property" means any property owned or leased by the Company or
any Subsidiary, the gross book value of which exceeds one percent of
Consolidated Net Worth.
"Production Payments and Reserve Sales" means the grant or transfer by the
Company or a Subsidiary of the Company to any Person of a royalty, overriding
royalty, net profits interest, production payment (whether volumetric or dollar
denominated), partnership or other interest in oil and gas properties, reserves
or the right to receive all or a portion of the production or the proceeds from
the sale of production attributable to such properties, including any such
grants or transfers pursuant to incentive compensation programs on terms that
are reasonably customary in the Oil and Gas Business for geologists,
geophysicists and other providers of technical services to the Company or a
Subsidiary of the Company.
"Purchase Money Lien" means a Lien on property securing Indebtedness
incurred by the Company or any of its Subsidiaries to provide funds for all or
any portion of the cost of (i) acquiring such property incurred before, at the
time of, or within six months after the acquisition of such property or (ii)
constructing, developing, altering, expanding, improving or repairing such
property or assets used in connection with such property.
"Redeemable Stock" of any Person means any equity security of such Person
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or otherwise (including on the happening of an
event), is or could become required to be redeemed for cash or other property or
is or could become redeemable for cash or other property at the option of the
holder thereof, in whole or in part, on or prior to the first anniversary of the
stated maturity of the applicable series of Notes; or is or could become
exchangeable at the option of the holder thereof for Indebtedness at any time in
whole or in part, on or prior to the first anniversary of the stated maturity of
the applicable series of Notes; provided, however, that Redeemable Stock shall
not include any security that may be exchanged or converted at the option of the
holder for Capital Stock of the Company having no preference as to dividends or
liquidation over any other Capital Stock of the Company.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Subsidiary leases any Principal Property
that has been or is to be sold or transferred by the Company or the Subsidiary
to such Person, other than (i) temporary leases for a term, including renewals
at the option of the lessee, of not more than five years, (ii) leases between
the Company and a Subsidiary or between Subsidiaries, (iii) leases of Principal
Property executed by the time of, or within 12 months after the latest of, the
acquisition, the completion of construction or improvement, or the commencement
of commercial operation of the Principal Property, and (iv) arrangements
pursuant to any provision of law with an effect similar to the former Section
168(f)(8) of the Internal Revenue Code of 1954.
"Subsidiary" of any Person means (i) any Person of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Subsidiaries of that Person or a
combination thereof, and (ii) any partnership, joint venture or other Person in
which such Person or one or more of the Subsidiaries of that Person or a
combination thereof has the power to control by contract or otherwise the board
of directors or equivalent governing body or otherwise controls such entity.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
S-25
<PAGE> 28
UNDERWRITING
The Company has entered into an Underwriting Agreement dated January ,
1998 (the "Underwriting Agreement"), with Salomon Brothers Inc, Chase Securities
Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated and
NationsBanc Montgomery Securities LLC (the "Underwriters"). Subject to the terms
and conditions set forth in the Underwriting Agreement, the Company has agreed
to sell to each of the Underwriters, and each of the Underwriters has severally
agreed to purchase from the Company, the aggregate principal amount of 2008
Notes and 2028 Notes set forth opposite its name below.
<TABLE>
<CAPTION>
2008 NOTES 2028 NOTES
PRINCIPAL PRINCIPAL
UNDERWRITER AMOUNT AMOUNT
----------- ----------- -----------
<S> <C> <C>
Salomon Brothers Inc........................................ $ $
Chase Securities Inc. ......................................
J.P. Morgan Securities Inc..................................
Morgan Stanley & Co. Incorporated...........................
NationsBanc Montgomery Securities LLC ......................
----------- -----------
Total............................................. $ $
=========== ===========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to pay for and accept delivery of the Notes are subject to certain
conditions precedent.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933 (the "Securities Act"), and will contribute to payments
that the Underwriters may be required to make in respect thereof.
The Underwriters have advised the Company that they propose initially to
offer the Notes directly to the public at the public offering price set forth on
the cover page of this Prospectus Supplement and to certain dealers at such
price less a concession not in excess of % of the principal amount of the
2008 Notes and not in excess of % of the principal amount of the 2028
Notes. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of % of the principal amount of the 2008 Notes and not in
excess of % of the 2028 Notes on sales to certain other dealers. After the
initial offering, the price to public and concessions to dealers may be changed.
The Notes are new issues of securities with no established trading market.
The Notes will not initially be listed for trading on any securities exchange or
other trading market, and the Company does not intend to make application for
the listing of the Notes. The Company has been advised by the Underwriters that
they currently intend to make a market in the Notes, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the Notes, and any such market making may be discontinued at any time
as to any or all of the Notes at the sole discretion of the respective
Underwriters. Accordingly, no assurance can be given as to the liquidity of, or
the trading market for, the Notes.
Under Rule 2710(c)(8) of the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD"), if more than 10% of the net proceeds of a
public offering of debt securities are to be paid to members of the NASD that
are participating in the offering, or affiliated or associated persons, the
yield on the debt securities distributed to the public must be no lower than
that recommended by a "qualified independent underwriter," as defined in Rule
2720 of the Conduct Rules of the NASD. Because The Chase Manhattan Bank,
NationsBank of Texas, N.A., and Morgan Guaranty Trust Company of New York, agent
banks and lenders under the United States Credit Facility and affiliates of
Chase Securities Inc., NationsBanc Montgomery Securities LLC and J.P. Morgan
Securities Inc., respectively (each of which are Underwriters of the Offering),
will each receive 8.64% of the repayment of amounts outstanding under the United
States Credit Facility, and NationsBank of Texas, N.A., will receive 100% of the
repayment of amounts outstanding under the Term Note, in each case from the net
proceeds of the Offering. Salomon Brothers Inc, another Underwriter of the
Offering (the "Independent Underwriter"), will act as a qualified independent
underwriter in connection with the Offering. The Independent Underwriter in its
role as qualified independent underwriter
S-26
<PAGE> 29
has performed due diligence investigations and reviewed and participated in the
preparation of this Prospectus Supplement and the Registration Statement of
which this Prospectus Supplement and the Prospectus form a part. The Independent
Underwriter will not receive any additional fees for serving as a qualified
independent underwriter in connection with the Offering. The yield on the Notes
sold to the public will be no lower than that recommended by the Independent
Underwriter.
The Underwriters and certain of their affiliates and associates may be
customers of, have lending relationships with, engage in transactions with,
and/or perform services, including investment banking services, for the Company
and its affiliates in the ordinary course of business. In addition to the
lending relationships described above, Salomon Brothers Inc acted as financial
advisor to Chauvco in connection with the Chauvco Acquisition, for which Chauvco
has agreed to pay Salomon Brothers Inc a customary fee. The Chase Manhattan Bank
acts as Trustee under the indenture for the Parker & Parsley Notes, for which it
receives customary fees and indemnifications from the Company. The Company has a
contractual relationship with Phibro Energy, Inc., an affiliate of Salomon
Brothers Inc, pursuant to which Phibro Energy, Inc. purchases crude oil from the
Company and its affiliates.
In connection with the Offering, certain Underwriters and their affiliates
may engage in transactions that stabilize, maintain or otherwise affect the
market price of the Notes. Such transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M, pursuant to
which such persons may bid for or purchase Notes for the purpose of stabilizing
their market price. The Underwriters also may create a short position for the
account of the Underwriters by selling more Notes in connection with the
Offering than they are committed to purchase from the Company, and in such case
may purchase Notes in the open market following completion of the Offering to
cover such short position. Any of the transactions described in this paragraph
may result in the maintenance of the price of the Notes at a level above that
which might otherwise prevail in the open market. None of the transactions
described in this paragraph is required, and, if they are undertaken, they may
be discontinued at any time.
The Company has agreed not to offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company in an offering to the public (or
in a private offering where holders of the debt securities are granted rights to
have such debt securities registered under the Securities Act or to exchange
such debt securities for other debt securities that are so registered) from the
date of this Prospectus Supplement until the first business day after the
closing of the Offering without the prior consent of Salomon Brothers Inc.
S-27
<PAGE> 30
LEGAL OPINIONS
Certain legal matters in connection with the Notes offered hereby will be
passed upon for the Company by Vinson & Elkins L.L.P., Dallas, Texas. The
Underwriters are being represented by Cravath, Swaine & Moore, New York, New
York. Michael D. Wortley, a partner of Vinson & Elkins L.L.P., is also a
director of the Company and beneficially owns 6,623 shares of Common Stock of
the Company.
INDEPENDENT AUDITORS
The Consolidated Financial Statements of the Company (successor to Parker &
Parsley and subsidiaries) have been incorporated by reference in the Prospectus
in reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, and upon the authority of said firm as experts in accounting
and auditing. The report of KPMG Peat Marwick LLP refers to a change in the
method of accounting for the impairment of long-lived assets and for long-lived
assets to be disposed of in 1995 and a change in the method of accounting for
income taxes in 1993.
The Consolidated Financial Statements of Mesa incorporated by reference in
the Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said report.
The Financial Statements of Greenhill Petroleum Corporation incorporated by
reference in the Prospectus have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The Consolidated Financial Statements of Chauvco incorporated by reference
in the Prospectus have been audited by Price Waterhouse, chartered accountants,
as indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.
RESERVE ENGINEERS
The estimates of the Company's proved reserves as of December 31, 1996,
incorporated by reference in the Prospectus, are based upon a reserve report
prepared by the Company and audited by Netherland, Sewell & Associates, Inc.,
independent petroleum consultants, and are incorporated by reference herein upon
the authority of such firm as experts with respect to such matters covered by
such report.
The estimates of Mesa's proved reserves as of December 31, 1996,
incorporated by reference in the Prospectus with respect to its Hugoton and West
Panhandle field properties, are based upon a reserve report prepared by
Williamson Petroleum Consultants, Inc., independent petroleum consultants, and
are incorporated by reference herein upon the authority of such firm as experts
with respect to such matters covered by such report. The estimates of Greenhill
Petroleum Corporation's proved reserves as of December 31, 1996, incorporated by
reference in the Prospectus, are based upon a reserve report prepared by Miller
and Lents, Ltd., independent petroleum consultants, and are incorporated by
reference herein upon the authority of such firm as experts with respect to such
matters covered by such report.
The estimates of Chauvco's proved reserves as of December 31, 1996,
incorporated by reference in the Prospectus, are based upon reserve reports
prepared by Gilbert Lausten Jung Associates, Ltd. and Martin Petroleum and
Associates, independent petroleum consultants, and are incorporated by reference
herein upon the authority of such firms as experts with respect to such matters
covered by such reports.
The Company anticipates that future estimates of its proved reserves will
be prepared by the Company's internal petroleum engineers rather than
independent petroleum consultants.
S-28
<PAGE> 31
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH THE OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY THE STATE.
SUBJECT TO COMPLETION, DATED JANUARY 5, 1998
PROSPECTUS
[LOGO] PIONEER NATURAL RESOURCES COMPANY
PIONEER NATURAL RESOURCES USA, INC., AS GUARANTOR
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
GUARANTEES OF DEBT SECURITIES
Pioneer Natural Resources Company (the "Company"), a Delaware corporation,
may offer from time to time (a) debt securities ("Debt Securities"), which may
be subordinated to other indebtedness of the Company, (b) warrants to purchase
Debt Securities ("Debt Warrants"), (c) shares of preferred stock, par value $.01
per share ("Preferred Stock"), (d) warrants to purchase shares of Preferred
Stock ("Preferred Stock Warrants"), (e) depositary shares representing
entitlement to all rights and preferences of a fraction of a share of Preferred
Stock of a specified series ("Depositary Shares"), (f) shares of common stock,
par value $.01 per share ("Common Stock"), and (g) warrants to purchase shares
of Common Stock ("Common Stock Warrants"), and Pioneer Natural Resources USA,
Inc. ("Pioneer USA"), a Delaware corporation and direct, wholly-owned subsidiary
of the Company, may offer from time to time guarantees of Debt Securities
("Guarantees"), all having an aggregate initial public offering price not to
exceed $1,400,000,000 or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies, including European
Currency Units. The Debt Warrants, Preferred Stock Warrants and Common Stock
Warrants are referred to herein collectively as "Warrants," and the Debt
Securities, Preferred Stock, Depositary Shares, Common Stock, Warrants and
Guarantees are referred to herein collectively as the "Offered Securities." The
Offered Securities may be offered, separately or as units with other Offered
Securities, in separate series in amounts, at prices and on terms to be
determined at or prior to the time of sale.
The specific terms of the Offered Securities with respect to which this
Prospectus is being delivered will be set forth in an accompanying supplement to
this Prospectus (a "Prospectus Supplement"), together with the terms of the
offering of the Offered Securities and the initial price and the net proceeds to
the Company or Pioneer USA from the sale thereof. The Prospectus Supplement will
include, with regard to the particular Offered Securities, the following
information: (a) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking, authorized denomination, maturity, rate or
method of calculation of interest and dates for payment thereof, any
exchangeability, conversion, redemption, prepayment, or sinking fund provisions,
the currency or currency unit in which principal, premium, or interest is
payable, the designation of the trustee acting under the applicable indenture,
and the initial offering price; (b) in the case of Preferred Stock, the
designation, number of shares, liquidation preference per share, initial public
offering price, dividend rate (or method of calculation thereof), dates on which
dividends shall be payable and dates from which dividends shall accrue, any
redemption or sinking fund provisions, any conversion or exchange rights, and
whether the Company has elected to offer the Preferred Stock in the form of
Depositary Shares; (c) in the case of Common Stock, the number of shares and the
terms of the offering and sale thereof; (d) in the case of Warrants, the number
and terms thereof, the designation and the number of securities issuable upon
exercise, the exercise price, the terms of the offering and sale thereof, and
where applicable, the duration and detachability thereof; (e) in the case of
Guarantees, the series of Debt Securities to which the Guarantees apply, whether
the Guarantees are secured or unsecured, conditional or unconditional, senior or
subordinate to other guarantees or indebtedness, and any other material terms;
and (f) in the case of all Offered Securities, whether the Offered Securities
will be offered separately or as a unit with other Offered Securities. The
Prospectus Supplement will also contain information, where applicable, about
material United States federal income tax considerations relating to, and any
listing on a securities exchange of, the Offered Securities covered by the
Prospectus Supplement.
The Company may sell the Offered Securities directly, through agents
designated from time to time, or through underwriters or dealers. If any agents,
underwriters or dealers are involved in the sale of the Offered Securities, the
names of the agents, underwriters or dealers and any applicable commissions or
discounts and the net proceeds to the Company from the sale will be set forth in
the applicable Prospectus Supplement.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
January , 1998.
<PAGE> 32
CERTAIN PERSONS PARTICIPATING IN AN OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE OFFERED
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH OFFERED SECURITIES, AND THE IMPOSITION OF A PENALTY BID,
DURING AND AFTER AN OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN
OF DISTRIBUTION."
AVAILABLE INFORMATION
The Company and Pioneer USA are subject to the informational requirements
of the Securities Exchange Act of 1934 (the "Exchange Act"). Each of the Company
and Pioneer USA files reports and other information, and the Company files proxy
statements, with the Securities and Exchange Commission (the "SEC"). Those
reports, proxy statements, and other information can be inspected and copied at
the public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC at
7 World Trade Center, Suite 1300, New York, New York 10048, and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60611. Copies of these materials can be
obtained at prescribed rates from the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549. These reports, proxy statements and
other information may also be obtained without charge from the web site that the
SEC maintains at http://www.sec.gov. These reports, proxy statements, and other
information about the Company also may be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company and Pioneer USA have filed with the SEC a Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act of
1933 (the "Securities Act") with respect to the Offered Securities. This
Prospectus and any accompanying Prospectus Supplement do not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC. For further
information with respect to the Company, Pioneer USA and the Offered Securities,
reference is made to the Registration Statement and to the exhibits thereto.
Statements contained herein concerning the provisions of certain documents are
not necessarily complete, and in each instance, reference is made to the copy of
the document filed as an exhibit to the Registration Statement or otherwise
filed with the SEC. Each such statement is qualified in its entirety by that
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company, Pioneer USA, Parker
& Parsley Petroleum Company ("Parker & Parsley") and MESA Inc. ("Mesa") with the
SEC, are incorporated by reference into this Prospectus, and are deemed to be a
part of this Prospectus:
1. Mesa's Annual Report on Forms 10-K and 10-K/A for the year ended
December 31, 1996;
2. Mesa's Quarterly Report on Form 10-Q for the period ended March 31,
1997;
3. Mesa's Quarterly Report on Form 10-Q for the period ended June 30,
1997;
4. Mesa's Current Reports on Form 8-K, dated February 7, 1997, and April
6, 1997, and Mesa's Current Report on Form 8-K/A, dated February 7,
1997;
5. Mesa's Current Report on Form 8-K, dated August 7, 1997;
6. Parker & Parsley's Annual Report on Forms 10-K and 10-K/A for the year
ended December 31, 1996;
7. Parker & Parsley's Current Report on Form 8-K, dated February 3, 1997;
8. Parker & Parsley's Quarterly Report on Form 10-Q for the period ended
March 31, 1997;
9. Parker & Parsley's Current Reports on Form 8-K, dated April 3, 1997,
July 28, 1997, and July 29, 1997;
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<PAGE> 33
10. Parker & Parsley's Quarterly Report on Form 10-Q for the period ended
June 30, 1997;
11. Parker & Parsley's Current Report on Form 8-K, dated April 6, 1997;
12. Parker & Parsley's Current Report on Form 8-K, dated August 7, 1997;
13. The Company's Registration Statement on Form S-4 (No. 333-26951) filed
on June 26, 1997, including any amendment or report for the purpose of
updating any such material;
14. The Company's Quarterly Report on Form 10-Q for the period ended June
30, 1997;
15. The Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1997;
16. The Company's Current Report on Form 8-K, dated August 7, 1997;
17. The Company's Current Report on Form 8-K, dated September 3, 1997;
18. The Company's Current Report on Form 8-K, dated December 5, 1997;
19. The Company's Current Report on Form 8-K, dated December 18, 1997;
20. The Definitive Joint Management Information Circular and Proxy
Statement of the Company and Chauvco Resources Ltd. (File No.
001-13245) filed with the SEC on November 17, 1997, including any
amendment or report for the purpose of updating any such material;
21. The description of the Company's Common Stock contained in the
Company's Registration Statement on Forms 8-A and 8-A/A (File No.
001-13245), declared effective by the SEC on August 8, 1997; and
22. Pioneer USA's Quarterly Report on Form 10-Q for the period ended
September 30, 1997.
All documents filed by the Company and Pioneer USA pursuant to Section
13(a), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of the filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
that also is or is deemed to be incorporated by reference herein or in any
Prospectus Supplement modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part of this
Prospectus, except as so modified or superseded.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of any
person, a copy of any or all of the documents referred to above that have been
or may be incorporated by reference into this Prospectus, other than exhibits to
the documents (unless the exhibits are specifically incorporated by reference
into the documents). Written or telephone request for the copies should be
directed to Corporate Secretary, Pioneer Natural Resources Company, 1400
Williams Square West, 5205 North O'Connor Boulevard, Irving, Texas 75039
(Telephone: (972) 444-9001).
THE ISSUERS
The Company is one of the largest public independent oil and gas companies
in the United States, engaged principally in the acquisition, development and
production of, and exploration for, oil and gas reserves and related activities.
Pioneer USA is a direct, wholly-owned subsidiary of the Company and, at December
31, 1997, directly owned substantially all of the United States onshore and
offshore properties of the Company. The executive offices and operating
headquarters of the Company and Pioneer USA are located at 1400 Williams Square
West, 5205 North O'Connor Blvd., Irving, Texas 75039, and their telephone number
at those offices is (972) 444-9001.
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<PAGE> 34
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of Offered Securities will be used for general corporate
purposes, which may include repayment of indebtedness, redemption or repurchase
of securities of the Company or any subsidiary, additions to working capital,
and capital expenditures, including exploration, development and acquisitions.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges and earnings to fixed charges and preferred stock
dividends (a) for each of 1996, 1995, 1994, 1993 and 1992, and for the nine
months ended September 30, 1997, on a historical basis, and (b) for 1996 and the
nine months ended September 30, 1997, on a pro forma basis after giving effect
to (i) the merger of Mesa with and into the Company, (ii) the merger of Parker &
Parsley with and into MESA Operating Co., a subsidiary of Mesa, and (iii) the
Company's acquisition of Chauvco Resources Ltd. ("Chauvco"), a corporation
organized under the laws of Alberta, Canada ("Chauvco Acquisition").
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31
NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------------------------
SEPTEMBER 30, 1997 1996 1996 1995 1994 1993 1992
---------------------- ------------- ---------------------- ---- ---- ---- ----
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(a)................. 1.5 (b) 5.4 5.3 1.6 (b) (b) 3.0 2.9
Ratio of earnings to fixed
charges and preferred stock
dividends(c)............... 1.5 (b) 5.4 5.3 1.6 (b) (b) 3.0 2.9
</TABLE>
- ---------------
(a) For purposes of computing the ratio, earnings consist of income before
income taxes and cumulative effect of accounting change plus fixed charges,
net of preferred stock dividends of subsidiary and interest capitalized, and
fixed charges consist of interest expense, interest capitalized, the portion
of rental expense attributable to interest, and preferred stock dividends of
subsidiary.
(b) The ratio indicates a less than one-to-one coverage because the earnings are
inadequate to cover the fixed charges for the period. Pro forma combined
earnings for the nine months ended September 30, 1997, and the Company's
historical earnings for the years ended December 31, 1995 and 1994, were
insufficient to cover its fixed charges. The amounts of the deficiencies
were $27.6 million, $150 million and $20.5 million, respectively.
(c) For purposes of computing the ratio, adjusted earnings consist of income
before income taxes and cumulative effect of accounting change plus fixed
charges and preferred stock dividends, net of preferred stock dividends of
subsidiary and interest capitalized, and fixed charges and preferred stock
dividends consist of interest expense, interest capitalized, the portion of
rental expense attributable to interest, preferred stock dividends of
subsidiary, and preferred stock dividends. The dividends on the 6 1/4%
Cumulative Guaranteed Monthly Income Convertible Preferred Shares of Parker
& Parsley Capital LLC, a subsidiary of Parker & Parsley, were recorded as
interest expense for financial reporting purposes until those shares were
converted into common stock of Parker & Parsley on July 28, 1997.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which the
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to the Debt Securities. Accordingly, for a
description of the terms of a particular issue of Debt Securities, reference
must be made to both the Prospectus Supplement relating thereto and to the
following description.
4
<PAGE> 35
The Debt Securities will be general obligations of the Company and may be
subordinated to Senior Indebtedness (as defined below) of the Company to the
extent set forth in the Prospectus Supplement relating thereto. See "Description
of Debt Securities -- Subordination." Debt Securities will be issued under an
indenture (the "Indenture"), between the Company and one or more commercial
banks to be selected as trustees (the trustee or trustees selected are referred
to collectively as the "Trustee"). The Indenture is subject to and governed by
the Trust Indenture Act of 1939 (the "TIA"), and the terms of the Debt
Securities will include those made part of the Indenture by reference to the TIA
as in effect on the date of the Indenture. A copy of the Indenture is filed as
an exhibit to the Registration Statement of which this Prospectus is a part. The
Indenture will also be available for inspection at the corporate trust office of
the Trustee. The following discussion of certain provisions of the Indenture is
a summary only and does not purport to be a complete description of the terms
and provisions of the Indenture. Accordingly, the following discussion is
qualified in its entirety by reference to the provisions of the Indenture and
the TIA, including the definition in the Indenture of terms used below with
their initial letters capitalized.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that can be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Debt Securities of the series with respect to which the Prospectus
Supplement is being delivered:
(a) The title of the Debt Securities of the series;
(b) Any limit on the aggregate principal amount of the Debt Securities
of the series that may be authenticated and delivered under the Indenture;
(c) The date or dates on which the principal and premium with respect
to the Debt Securities of the series are payable;
(d) The rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest (if any) or the method of
determining the rate or rates, the date or dates from which the interest
shall accrue, the interest payment dates on which the interest shall be
payable or the method by which the dates will be determined, the record
dates for the determination of holders thereof to whom the interest is
payable (in the case of Registered Securities), and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve
30-day months;
(e) The place or places, if any, in addition to or instead of the
corporate trust office of the Trustee (in the case of Registered
Securities) or the principal London office of the Trustee (in the case of
Bearer Securities), where the principal, premium, and interest with respect
to Debt Securities of the series shall be payable;
(f) The price or prices at which, the period or periods within which,
and the terms and conditions upon which, Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Company or
otherwise;
(g) Whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both and, if Bearer
Securities are to be issued, whether coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for Registered
Securities of the series, and the circumstances under which and the places
at which any such exchanges, if permitted, may be made;
(h) If any Debt Securities of the series are to be issued as Bearer
Securities or as one or more Global Securities (as defined below)
representing individual Bearer Securities of the series, whether certain
provisions for the payment of additional interest or tax redemptions shall
apply; whether interest with respect to any portion of a temporary Bearer
Security of the series payable with respect to any interest payment date
prior to the exchange of the temporary Bearer Security for definitive
Bearer Securities of the series shall be paid to any clearing organization
with respect to the portion of the temporary Bearer Security held for its
account and, in such event, the terms and conditions (including
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<PAGE> 36
any certification requirements) upon which any such interest payment
received by a clearing organization will be credited to the persons
entitled to interest payable on the interest payment date; and the terms
upon which a temporary Bearer Security may be exchanged for one or more
definitive Bearer Securities of the series;
(i) The obligation, if any, of the Company to redeem, purchase or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the price or
prices at which, the period or periods within which, and the terms and
conditions upon which, Debt Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligations;
(j) The terms, if any, upon which the Debt Securities of the series
may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by Depositary Shares), other Debt Securities, or
warrants for Common Stock, Preferred Stock, or indebtedness or other
securities of any kind of the Company or any other issuer or obligor and
the terms and conditions upon which the conversion or exchange shall be
effected, including the initial conversion or exchange price or rate, the
conversion or exchange period, and any other additional provisions;
(k) If other than denominations of $1,000 or any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(l) If the amount of principal, premium or interest with respect to
the Debt Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which the amounts will be
determined;
(m) If the principal amount payable at the stated maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to the stated maturity, the amount that will be deemed to be
the principal amount as of any date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity or which will be deemed to be outstanding as
of any date (or, in any such case, the manner in which the deemed principal
amount is to be determined), and if necessary, the manner of determining
the equivalent thereof in United States currency;
(n) Any changes or additions to the provisions of the Indenture
dealing with defeasance, including the addition of additional covenants
that may be subject to the Company's covenant defeasance option;
(o) If other than the coin or currency of the United States as at the
time of payment is legal tender for payment of public and private debts,
the coin or currency or currencies or units of two or more currencies in
which payment of the principal, premium, and interest with respect to Debt
Securities of the series shall be payable;
(p) If other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series that shall be payable
upon declaration of acceleration of the maturity thereof or provable in
bankruptcy;
(q) The terms, if any, of the transfer, mortgage, pledge or assignment
as security for the Debt Securities of the series of any properties,
assets, moneys, proceeds, securities, or other collateral, including
whether certain provisions of the Trust Indenture Act are applicable and
any corresponding changes to provisions of the Indenture as then in effect;
(r) Any addition to or change in the Events of Default with respect to
the Debt Securities of the series and any change in the right of the
Trustee or the holders to declare the principal, premium and interest with
respect to the Debt Securities due and payable;
(s) If the Debt Securities of the series shall be issued in whole or
in part in the form of a Global Security, the terms and conditions, if any,
upon which the Global Security may be exchanged in whole or in part for
other individual Debt Securities in definitive registered form, the
Depositary for the Global
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<PAGE> 37
Security, and the form of any legend or legends to be borne by the Global
Security in addition to or in lieu of the legend referred to in the
Indenture;
(t) Any Trustee, authenticating or paying agents, transfer agents or
registrars;
(u) The applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms
then set forth in the Indenture relating to permitted consolidations,
mergers or sales of assets, including conditioning any merger, conveyance,
transfer or lease permitted by the Indenture upon the satisfaction of an
indebtedness coverage standard by the Company and any successor to the
Company;
(v) The terms, if any, of any guarantee of the payment of principal,
premium and interest with respect to Debt Securities of the series and any
corresponding changes to the provisions of the Indenture as then in effect;
(w) The subordination, if any, of the Debt Securities of the series
pursuant to the Indenture and any changes or additions to the provisions of
the Indenture relating to subordination;
(x) With regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(y) Any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of the Indenture).
The Prospectus Supplement will also describe any material United States
federal income tax consequences or other special considerations applicable to
the series of Debt Securities to which the Prospectus Supplement relates,
including those applicable to (a) Bearer Securities, (b) Debt Securities with
respect to which payments of principal, premium or interest are determined with
reference to an index or formula (including changes in prices of particular
securities, currencies or commodities), (c) Debt Securities with respect to
which principal, premium or interest is payable in a foreign or composite
currency, (d) Debt Securities that are issued at a discount below their stated
principal amount, bearing no interest or interest at a rate that at the time of
issuance is below market rates ("Original Issue Discount Debt Securities"), and
(e) variable rate Debt Securities that are exchangeable for fixed rate Debt
Securities.
Payments of interest on Registered Securities may be made at the option of
the Company by check mailed to the registered holders thereof or, if so provided
in the applicable Prospectus Supplement, at the option of a holder by wire
transfer to an account designated by the holder. Except as otherwise provided in
the applicable Prospectus Supplement, no payment on a Bearer Security will be
made by mail to an address in the United States or by wire transfer to an
account in the United States.
Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities may be transferred or exchanged at the office of the
Trustee at which its corporate trust business is principally administered in the
United States or at the office of the Trustee or the Trustee's agent in the
Borough of Manhattan, the City and State of New York, at which its corporate
agency business is conducted, subject to the limitations provided in the
Indenture, without the payment of any service charge, other than any tax or
governmental charge payable in connection therewith. Bearer Securities will be
transferable only by delivery. Provisions with respect to the exchange of Bearer
Securities will be described in the Prospectus Supplement relating to the Bearer
Securities.
All funds paid by the Company to a paying agent for the payment of
principal, premium, or interest with respect to any Debt Securities that remain
unclaimed at the end of two years after the principal, premium, or interest
shall have become due and payable will be repaid to the Company, and the holders
of the Debt Securities or any coupons appertaining thereto will thereafter look
only to the Company for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities. A Global Security is a Debt Security that
represents, and is denominated in an amount equal to,
7
<PAGE> 38
the aggregate principal amount of all outstanding Debt Securities of a series,
or any portion thereof, in either case having the same terms, including the same
original issue date, date or dates on which principal and interest are due, and
interest rate or method of determining interest. A Global Security will be
deposited with, or on behalf of, a Depositary, which will be identified in the
Prospectus Supplement relating to the Debt Securities. Global Securities may be
issued in either registered or bearer form and in either temporary or definitive
form. Unless and until it is exchanged in whole or in part for the individual
Debt Securities represented thereby, a Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary, by a nominee
of the Depositary to the Depositary or another nominee of the Depositary, or by
the Depositary or any nominee of the Depositary to a successor Depositary or any
nominee of the successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
the Debt Securities. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for the Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Debt Securities represented by
the Global Security to the accounts of persons that have accounts with the
Depositary ("participants"). The accounts shall be designated by the dealers or
underwriters with respect to the Debt Securities or, if the Debt Securities are
offered and sold directly by the Company or through one or more agents, by the
Company or the agents. Ownership of beneficial interests in a Global Security
will be limited to participants or persons that hold beneficial interests
through participants. Ownership of beneficial interests in the Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depositary (with respect to interests of
participants) or records maintained by participants (with respect to interests
of persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of the securities in
definitive form. Such limitations and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner or holder of the Global Security, the Depositary or nominee, as
the case may be, will be considered the sole owner or holder of the individual
Debt Securities represented by the Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities
represented by the Global Security registered in their names, will not receive
or be entitled to receive physical delivery of any of the Debt Securities in
definitive form, and will not be considered the owners or holders thereof under
the Indenture.
Subject to the restrictions described under "Description of Debt
Securities -- Limitations on Issuance of Bearer Securities," payments of
principal, premium and interest with respect to individual Debt Securities
represented by a Global Security will be made to the Depositary or its nominee,
as the case may be, as the registered owner or holder of the Global Security.
Neither the Company, the Trustee, any paying agent or registrar for the Debt
Securities, or any agent of the Company or the Trustee will have any
responsibility or liability for (a) any aspect of the records relating to or
payments made by the Depositary, its nominee, or any participants on account of
beneficial interests in the Global Security or for maintaining, supervising or
reviewing any records relating to the beneficial interests, (b) the payment to
the owners of beneficial interests in the Global Security of amounts paid to the
Depositary or its nominee, or (c) any other matter relating to the actions and
practices of the Depositary, its nominee or its participants. Neither the
Company, the Trustee, any paying agent or registrar for the Debt Securities, nor
any agent of the Company or the Trustee will be liable for any delay by the
Depositary, its nominee or any of its participants in identifying the owners of
beneficial interests in the Global Security, and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from the
Depositary or its nominee for all purposes.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest with
respect to a definitive Global Security representing any of the Debt Securities,
will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of the Global Security, as shown on the records of
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the Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in the Global Security held
through the participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
and registered in street name. The payments will be the responsibility of the
participants. Receipt by owners of beneficial interests in a temporary Global
Security of payments of principal, premium or interest with respect thereto will
be subject to the restrictions described under "Description of Debt
Securities -- Limitations on Issuance of Bearer Securities."
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary, the Company shall appoint a
successor depositary. If a successor depositary is not appointed by the Company
within 90 days, the Company will issue individual Debt Securities of the series
in exchange for the Global Security representing the series of Debt Securities.
In addition, the Company may at any time and in its sole discretion, subject to
any limitations described in the Prospectus Supplement relating to the Debt
Securities, determine no longer to have Debt Securities of a series represented
by a Global Security and, in that event, will issue individual Debt Securities
of the series in exchange for the Global Security representing the series of
Debt Securities. Furthermore, if the Company so specifies with respect to the
Debt Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of the series may, on terms acceptable to
the Company, the Trustee, and the Depositary for the Global Security, receive
individual Debt Securities of the series in exchange for the beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to the Debt Securities. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery of
individual Debt Securities of the series represented by the Global Security
equal in principal amount to the beneficial interest and to have the Debt
Securities registered in its name (if the Debt Securities are issuable as
Registered Securities). Individual Debt Securities of the series so issued will
be issued (a) as Registered Securities in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof if the Debt
Securities are issuable as Registered Securities, (b) as Bearer Securities in
the denomination or denominations specified by the Company if the Debt
Securities are issuable as Bearer Securities, or (c) as either Registered
Securities or Bearer Securities as described above if the Debt Securities are
issuable in either form. See, however, "Description of Debt
Securities -- Limitations on Issuance of Bearer Securities" for a description of
certain restrictions on the issuance of individual Bearer Securities in exchange
for beneficial interests in a bearer Global Security.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
The Debt Securities of a series may be issued as Registered Securities
(which will be registered as to principal and interest in the register
maintained by the registrar for the Debt Securities) or Bearer Securities (which
will be transferable only by delivery). If the Debt Securities are issuable as
Bearer Securities, certain special limitations and considerations will apply.
In compliance with United States federal income tax laws and regulations,
the Company and any underwriter, agent or dealer participating in an offering of
Bearer Securities will agree that, in connection with the original issuance of
the Bearer Securities and during the period ending 40 days after the issue date,
they will not offer, sell or deliver any such Bearer Security, directly or
indirectly, to a United States Person (as defined below) or to any person within
the United States, except to the extent permitted under United States Treasury
regulations.
Bearer Securities will bear a legend to the following effect: "Any United
States person who holds this obligation will be subject to limitations under the
United States federal income tax laws, including the limitations provided in
Sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred
to in the legend provide that, with certain exceptions, a United States taxpayer
who holds Bearer Securities will not be allowed to deduct any loss with respect
to, and will not be eligible for capital gain treatment with respect to any gain
realized on the sale, exchange, redemption or other disposition of, the Bearer
Securities.
For this purpose, "United States" includes the United States of America and
its possessions, and "United States person" means a citizen or resident of the
United States, a corporation, partnership or other
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entity created or organized in or under the laws of the United States, or an
estate or trust the income of which is subject to United States federal income
taxation regardless of its source.
Pending the availability of a definitive Global Security or individual
Bearer Securities, as the case may be, Debt Securities that are issuable as
Bearer Securities may initially be represented by a single temporary Global
Security, without interest coupons, to be deposited with a common depositary in
London for Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of the Euroclear System ("Euroclear"), or Centrale de Livraison de
Valeurs Mobilieres S.A. ("CEDEL") for credit to the accounts designated by or on
behalf of the purchasers thereof. Following the availability of a definitive
Global Security in bearer form, without coupons attached, or individual Bearer
Securities and subject to any further limitations described in the applicable
Prospectus Supplement, the temporary Global Security will be exchangeable for
interests in the definitive Global Security or for the individual Bearer
Securities, respectively, only upon receipt of a "Certificate of Non-U.S.
Beneficial Ownership," which is a certificate to the effect that a beneficial
interest in a temporary Global Security is owned by a person that is not a
United States Person or is owned by or through a financial institution in
compliance with applicable United States Treasury regulations. No Bearer
Security will be delivered in or to the United States. If so specified in the
applicable Prospectus Supplement, interest on a temporary Global Security will
be paid to each of Euroclear and CEDEL with respect to that portion of the
temporary Global Security held for its account, but only upon receipt as of the
relevant interest payment date of a Certificate of Non-U.S. Beneficial
Ownership.
SUBORDINATION
Debt Securities of a series may be subordinated ("Subordinated Debt
Securities") to Senior Indebtedness (as defined below) to the extent set forth
in the Prospectus Supplement relating thereto. The Company currently conducts
substantially all its operations through subsidiaries, and the holders of Debt
Securities (whether or not Subordinated Debt Securities) will be structurally
subordinated to the creditors of the Company's subsidiaries.
Subordinated Debt Securities of a series and any coupons appertaining
thereto will be subordinate in right of payment, to the extent and in the manner
set forth in the Indenture and the Prospectus Supplement relating to the
Subordinated Debt Securities, to the prior payment of all indebtedness of the
Company that is designated as "Senior Indebtedness" with respect to the series.
"Senior Indebtedness," with respect to any series of Subordinated Debt
Securities, will consist of (a) any and all amounts payable under or with
respect to the Company's "Bank Indebtedness" and (b) any other indebtedness of
the Company that is designated in a resolution of the Company's Board of
Directors or in any supplemental indenture establishing any other series as
Senior Indebtedness with respect to the series. "Bank Indebtedness" is defined
as (i) the Amended and Restated Credit Facility Agreement (Primary Facility),
dated as of December 18, 1997, among the Company, as Borrower, and NationsBank
of Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent,
Morgan Guaranty Trust Company of New York, as Documentation Agent, The Chase
Manhattan Bank, as Syndication Agent, and the Co-Agents and Lenders party
thereto; (ii) the Amended and Restated Credit Facility Agreement (364 Day
Facility), dated as of December 18, 1997, among the Company, as Borrower, and
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation
Agent, Morgan Guaranty Trust Company of New York, as Documentation Agent, The
Chase Manhattan Bank, as Syndication Agent, and the Co-Agents and Lenders party
thereto; (iii) the Term Note, dated as of December 22, 1997, executed by the
Company and payable to NationsBank of Texas, N.A., in the original principal
amount of $100 million; and (iv) the Credit Agreement, dated as of December 18,
1997, among Chauvco Resources Ltd., Canadian Imperial Bank of Commerce, and the
other lenders signatory thereto; each as amended or modified from time to time,
and each of which is incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part.
Upon any payment or distribution of assets of the Company to creditors or
upon a total or partial liquidation or dissolution of the Company or in a
bankruptcy, receivership or similar proceeding relating to the Company or its
property, holders of Senior Indebtedness shall be entitled to receive payment in
full in cash of the Senior Indebtedness before holders of Subordinated Debt
Securities shall be entitled to receive any payment of principal, premium or
interest with respect to the Subordinated Debt Securities, and until the
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Senior Indebtedness is paid in full, any distribution to which holders of
Subordinated Debt Securities would otherwise be entitled shall be made to the
holders of Senior Indebtedness (except that the holders may receive shares of
stock and any debt securities that are subordinated to Senior Indebtedness to at
least the same extent as the Subordinated Debt Securities).
The Company may not make any payments of principal, premium or interest
with respect to Subordinated Debt Securities, make any deposit for the purpose
of defeasance of the Subordinated Debt Securities, or repurchase, redeem or
otherwise retire (except, in the case of Subordinated Debt Securities that
provide for a mandatory sinking fund, by the delivery of Subordinated Debt
Securities by the Company to the Trustee in satisfaction of the Company's
sinking fund obligation) any Subordinated Debt Securities if (a) any principal,
premium or interest with respect to Senior Indebtedness is not paid within any
applicable grace period (including at maturity), or (b) any other default on
Senior Indebtedness occurs and the maturity of the Senior Indebtedness is
accelerated in accordance with its terms, unless, in either case, the default
has been cured or waived and the acceleration has been rescinded, the Senior
Indebtedness has been paid in full in cash, or the Company and the Trustee
receive written notice approving the payment from the representatives of each
issue of "Designated Senior Indebtedness" (which will include the Bank
Indebtedness and any other specified issue of Senior Indebtedness of at least
$100 million). During the continuance of any default (other than a default
described in clause (a) or (b) above) with respect to any Senior Indebtedness
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect the
acceleration) or the expiration of any applicable grace periods, the Company may
not pay the Subordinated Debt Securities for a period (the "Payment Blockage
Period") commencing on the receipt by the Company and the Trustee of written
notice of the default from the representative of any Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period (a
"Blockage Notice"). The Payment Blockage Period may be terminated before its
expiration by written notice to the Trustee and the Company from the person who
gave the Blockage Notice, by repayment in full in cash of the Senior
Indebtedness with respect to which the Blockage Notice was given, or because the
default giving rise to the Payment Blockage Period is no longer continuing.
Unless the holders of the Senior Indebtedness shall have accelerated the
maturity thereof, the Company may resume payments on the Subordinated Debt
Securities after the expiration of the Payment Blockage Period. Not more than
one Blockage Notice may be given in any period of 360 consecutive days unless
the first Blockage Notice within the 360-day period is given by or on behalf of
holders of Designated Senior Indebtedness other than the Bank Indebtedness, in
which case, the representative of the Bank Indebtedness may give another
Blockage Notice within the period. In no event, however, may the total number of
days during which any Payment Blockage Period or Periods is in effect exceed 179
days in the aggregate during any period of 360 consecutive days. After all
Senior Indebtedness is paid in full and until the Subordinated Debt Securities
are paid in full, holders of the Subordinated Debt Securities shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness.
By reason of the subordination, in the event of insolvency, creditors of
the Company who are holders of Senior Indebtedness, as well as certain general
creditors of the Company, may recover more, ratably, than the holders of the
Subordinated Debt Securities.
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Debt Securities:
(a) Default in the payment of any installment of interest on any Debt
Securities of that series or any payment with respect to the related
coupons, if any, as and when the same shall become due and payable (whether
or not, in the case of Subordinated Debt Securities, the payment shall be
prohibited by reason of the subordination provisions described above) and
continuance of the default for a period of 30 days;
(b) Default in the payment of principal or premium with respect to any
Debt Securities of that series as and when the same shall become due and
payable, whether at maturity, upon redemption, by declaration, upon
required repurchase or otherwise (whether or not, in the case of
Subordinated Debt Securities, the payment shall be prohibited by reason of
the subordination provisions described above);
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(c) Default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable;
(d) Failure on the part of the Company to comply with the provisions
of the Indenture relating to consolidations, mergers, and sales of assets;
(e) Failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Debt
Securities of that series, in any resolution of the Board of Directors of
the Company authorizing the issuance of that series of Debt Securities, in
the Indenture with respect to the series, or in any supplemental indenture
with respect to the series (other than a covenant a default in the
performance of which is otherwise specifically dealt with) continuing for a
period of 60 days after the date on which written notice specifying the
failure and requiring the Company to remedy the same shall have been given
to the Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in aggregate principal amount of the Debt
Securities of that series at the time outstanding;
(f) Indebtedness of the Company or any subsidiary of the Company is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total amount
of the Indebtedness unpaid or accelerated exceeds $20 million, and the
default remains uncured or the acceleration is not rescinded for 10 days
after the date on which written notice specifying the failure and requiring
the Company to remedy the same shall have been given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at the
time outstanding;
(g) The Company or any of its "Significant Subsidiaries" (defined as
any subsidiary of the Company that would be a "significant subsidiary" as
defined in Rule 405 under the Securities Act as in effect on the date of
the Indenture) shall (1) voluntarily commence any proceeding or file any
petition seeking relief under the United States Bankruptcy Code or other
federal or state bankruptcy, insolvency or similar law, (2) consent to the
institution of, or fail to controvert within the time and in the manner
prescribed by law, any such proceeding or the filing of any such petition,
(3) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for the Company or any
Significant Subsidiary or for a substantial part of its property, (4) file
an answer admitting the material allegations of a petition filed against it
in any such proceeding, (5) make a general assignment for the benefit of
creditors, (6) admit in writing its inability or fail generally to pay its
debts as they become due, (7) take corporate action for the purpose of
effecting any of the foregoing, or (8) take any comparable action under any
foreign laws relating to insolvency;
(h) The entry of an order or decree by a court having competent
jurisdiction for (1) relief with respect to the Company or any of its
Significant Subsidiaries or a substantial part of any of their property
under the United States Bankruptcy Code or any other federal or state
bankruptcy, insolvency or similar law, (2) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any
Significant Subsidiary or for a substantial part of any of their property
(except, any decree or order appointing the official of any Significant
Subsidiary pursuant to a plan under which the assets and operations of the
Significant Subsidiary are transferred to or combined with another
Significant Subsidiary or Subsidiaries of the Company or to the Company),
or (3) the winding-up or liquidation of the Company or any Significant
Subsidiary (except any decree or order approving or ordering the winding-up
or liquidation of the affairs of a Significant Subsidiary pursuant to a
plan under which the assets and operations of the Significant Subsidiary
are transferred to or combined with another Significant Subsidiary or
Subsidiaries of the Company or to the Company), and the order or decree
shall continue unstayed and in effect for 60 consecutive days, or any
similar relief is granted under any foreign laws and the order or decree
stays in effect for 60 consecutive days;
(i) Any judgment or decree for the payment of money in excess of $20
million is entered against the Company or any subsidiary of the Company by
a court of competent jurisdiction, which judgment is not covered by
insurance, and is not discharged and either (1) an enforcement proceeding
has been commenced by any creditor upon the judgment or decree, or (2)
there is a period of 60 days following the
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entry of the judgment or decree during which the judgment or decree is not
discharged or waived or the execution thereof stayed and, in either case,
the default continues for 10 days after the date on which written notice
specifying the failure and requiring the Company to remedy the same shall
have been given to the Company by the Trustee or to the Company and the
Trustee by the holders of at least 25% in aggregate principal amount of the
Debt Securities of that series at the time outstanding; or
(j) Any other Event of Default provided with respect to Debt
Securities of that series.
An Event of Default with respect to one series of Debt Securities is not
necessarily an Event of Default for another series.
If an Event of Default described in clause (a), (b), (c), (d), (e), (f),
(i) or (j) above occurs and is continuing with respect to any series of Debt
Securities, unless the principal and interest with respect to all the Debt
Securities of the series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities of that series then outstanding may declare the principal amount
(or, if Original Issue Discount Debt Securities, the portion of the principal
amount as may be specified in the series) of and interest on all the Debt
Securities of that series due and payable immediately. If an Event of Default
described in clause (g) or (h) above occurs, unless the principal and interest
with respect to all the Debt Securities of all series shall have become due and
payable, the principal amount (or, if Original Issue Discount Debt Securities,
the portion of the principal amount as may be specified in the series) of and
interest on all Debt Securities of all series then outstanding shall become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any holder of Debt Securities.
If an Event of Default occurs and is continuing, the Trustee shall be
entitled and empowered to institute any action or proceeding for the collection
of the sums so due and unpaid or to enforce the performance of any provision of
the Debt Securities of the affected series or the Indenture, to prosecute any
such action or proceeding to judgment or final decree, and to enforce any
judgment or final decree against the Company or any other obligor on the Debt
Securities of the series. In addition, if there shall be pending proceedings for
the bankruptcy or reorganization of the Company or any other obligor on the Debt
Securities, or if a receiver, trustee, or similar official shall have been
appointed for its property, the Trustee shall be entitled and empowered to file
and prove a claim for the whole amount of principal, premium and interest (or,
in the case of Original Issue Discount Debt Securities, the portion of the
principal amount as may be specified in the terms of the series) owing and
unpaid with respect to the Debt Securities.
The holders of not less than a majority in aggregate principal amount of a
series of Debt Securities may direct the time, method and place of conducting
any proceedings for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee; provided that such direction is not in
conflict with any rule of law or with the Indenture. The Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.
The Trustee will be entitled, subject to the duty of the Trustee during the
continuance of an Event of Default to act with the required standard of care, to
be indemnified by the holders of a series of Debt Securities before proceeding
to exercise any right or power under the Indenture at the request of the holders
of that series of Debt Securities.
No holder of any Debt Security or coupon of any series shall have any right
to institute any action or proceeding upon or under or with respect to the
Indenture, for the appointment of a receiver or trustee, or for any other
remedy, unless (a) the holder previously shall have given to the Trustee written
notice of an Event of Default with respect to Debt Securities of that series and
of the continuance thereof, (b) the holders of not less than 25% in aggregate
principal amount of the outstanding Debt Securities of that series shall have
made written request to the Trustee to institute the action or proceeding with
respect to the Event of Default and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and (c) the Trustee, for 60 days
after its receipt of such notice, request, and offer of indemnity shall have
failed to institute the action or proceeding and no direction inconsistent with
the written request shall have been given to the Trustee pursuant to the
provisions of the Indenture. However, such limitations do not apply to a suit
instituted by a holder of Debt Securities for
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enforcement of payment of the principal of, premium, if any, or interest on such
Debt Securities on or after the respective due dates expressed in such Debt
Securities.
Prior to the acceleration of the maturity of the Debt Securities of any
series, the holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may, on behalf of the holders
of all Debt Securities and any related coupons of that series, waive any past
default or Event of Default and its consequences for that series, except (a) a
default in the payment of the principal, premium or interest with respect to the
Debt Securities, or (b) a default with respect to a provision of the Indenture
that cannot be amended without the consent of each holder affected thereby. In
case of any waiver, the default shall cease to exist, any Event of Default
arising therefrom shall be deemed to have been cured for all purposes, and the
Company, the Trustee and the holders of the Debt Securities of that series shall
be restored to their former positions and rights under the Indenture.
The Trustee shall, within 90 days after the occurrence of a default known
to it with respect to a series of Debt Securities, give to the holders of that
series of Debt Securities of the series notice of all uncured defaults with
respect to the series known to it, unless the defaults shall have been cured or
waived before the giving of the notice; provided, however, that except in the
case of default in the payment of principal, premium, or interest with respect
to the Debt Securities of that series or in the making of any sinking fund
payment with respect to the Debt Securities of that series, the Trustee shall be
protected in withholding notice if it in good faith determines that the
withholding of such notice is in the interest of the holders of the Debt
Securities of that series.
The Indenture will require the Company to file annually with the Trustee a
certificate, executed by a designated officer of the Company, stating to the
best of his knowledge that the Company is not in default under certain covenants
under the Indenture or if he has knowledge that the Company is in such default,
specifying such default.
MODIFICATION OF THE INDENTURE
The Company and the Trustee may enter into supplemental indentures without
the consent of the holders of Debt Securities for one or more of the following
purposes:
(a) To evidence the succession of another person to the Company
pursuant to the provisions of the Indenture to consolidations, mergers and
sales of assets and the assumption by the successor of the covenants,
agreements, and obligations of the Company in the Indenture and in the Debt
Securities;
(b) To surrender any right or power conferred upon the Company by the
Indenture, to add to the covenants of the Company such further covenants,
restrictions, conditions, or provisions for the protection of the holders
of all or any series of Debt Securities as the Board of Directors of the
Company shall consider to be for the protection of the holders of the Debt
Securities, and to make the occurrence, or the occurrence and continuance,
of a default in any of the additional covenants, restrictions, conditions
or provisions a default or an Event of Default under the Indenture
(provided, however, that with respect to any such additional covenant,
restriction, condition or provision, the supplemental indenture may provide
for a period of grace after default, which may be shorter or longer than
that allowed in the case of other defaults, may provide for an immediate
enforcement upon the default, may limit the remedies available to the
Trustee upon the default, or may limit the right of holders of a majority
in aggregate principal amount of any or all series of Debt Securities to
waive the default);
(c) To cure any ambiguity or omission or to correct or supplement any
provision contained in the Indenture, in any supplemental indenture, or in
any Debt Securities that may be defective or inconsistent with any other
provision contained therein, to convey, transfer, assign, mortgage or
pledge any property to or with the Trustee, or to make such other
provisions in regard to matters or questions arising under the Indenture as
shall not adversely affect the interests of any holders of Debt Securities
of any series;
(d) To modify or amend the Indenture in such a manner as to permit the
qualification of the Indenture or any supplemental indenture under the
Trust Indenture Act as then in effect;
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(e) To add to or change any of the provisions of the Indenture to
provide that Bearer Securities may be registerable as to principal, to
change or eliminate any restrictions on the payment of principal or premium
with respect to Registered Securities or of principal, premium or interest
with respect to Bearer Securities, or to permit Registered Securities to be
exchanged for Bearer Securities, so long as any such action does not
adversely affect the interests of the holders of Debt Securities or any
coupons of any series in any material respect or permit or facilitate the
issuance of Debt Securities of any series in uncertificated form;
(f) To comply with the provisions of the Indenture to consolidations,
mergers, and sales of assets;
(g) In the case of Subordinated Debt Securities, to make any change in
the provisions of the Indenture to subordination that would limit or
terminate the benefits available to any holder of Senior Indebtedness under
such provisions (but only if the holder of Senior Indebtedness consents to
the change);
(h) To add guarantees with respect to any or all of the Debt
Securities or to secure any or all of the Debt Securities;
(i) To make any change that does not adversely affect the rights of
any holder;
(j) To add to, change or eliminate any of the provisions of the
Indenture with respect to one or more series of Debt Securities, so long as
any such addition, change or elimination not otherwise permitted under the
Indenture shall (1) neither apply to any Debt Security of any series
created prior to the execution of the supplemental indenture and entitled
to the benefit of the provision nor modify the rights of the holders of any
Debt Security with respect to the provision, or (2) become effective only
when there is no Debt Security outstanding;
(k) To evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of the Indenture
as shall be necessary to provide for or facilitate the administration of
the Indenture by more than one Trustee;
(l) To establish the form or terms of Debt Securities and coupons of
any series, as described under "Description of Debt Securities -- General";
and
(m) To provide for uncertificated Debt Securities in addition to or in
place of certificated Debt Securities (provided that the uncertificated
Debt Securities are issued in registered form for purposes of Section
163(f) of the Code or in a manner such that the uncertificated Debt
Securities are described in Section 163(f)(2)(B) of the Code).
With the consent of the holders of a majority in aggregate principal amount
of the outstanding Debt Securities of each series affected thereby, the Company
and the Trustee may from time to time and at any time enter into a supplemental
indenture for the purpose of adding any provisions to, changing in any manner,
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Debt
Securities of that series; provided, however, that without the consent of the
holders of each Debt Security so affected, no such supplemental indenture shall
(a) reduce the percentage in principal amount of Debt Securities of any series
whose holders must consent to an amendment, (b) reduce the rate of or extend the
time for payment of interest on any Debt Security or coupon or reduce the amount
of any payment to be made with respect to any coupon, (c) reduce the principal
of or extend the stated maturity of any Debt Security, (d) reduce the premium
payable upon the redemption of any Debt Security or change the time at which any
Debt Security may or shall be redeemed, (e) make any Debt Security payable in a
currency other than that stated in the Debt Security, (f) in the case of any
Subordinated Debt Security or coupons appertaining thereto, make any change in
the provisions of the Indenture to subordination that adversely affects the
rights of any holder under the provisions, (g) release any security that may
have been granted with respect to the Debt Securities, (h) impair the right of a
holder of Debt Securities to receive payment of principal of and interest on
such holder's Debt Securities on or after the due dates therefor or to institute
suit for the enforcement of or with respect to such holder's Debt Securities,
(i) make
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any change in the provisions of the Indenture to waivers of defaults or
amendments that require unanimous consent, (j) change any obligation of the
Company provided for in the Indenture to pay additional interest with respect to
Bearer Securities, or (k) limit the obligation of the Company to maintain a
paying agency outside the United States for payment on Bearer Securities or
limit the obligation of the Company to redeem certain Bearer Securities.
The consent of the holders of Debt Securities is not necessary under the
Indenture to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to holders of the Debt Securities of all affected series a
notice briefly describing such amendment. However, the failure to give such
notice, or any defect therein, will not impair or affect the validity of the
amendment.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any person, or
convey, transfer or lease all or substantially all its assets, or permit any
person to consolidate with or merge into or convey, transfer or lease
substantially all its assets to the Company, unless the following conditions
have been satisfied:
(a) Either (1) the Company shall be the continuing person in the case
of a merger, or (2) the resulting, surviving or transferee person, if other
than the Company (the "Successor Company"), shall be a corporation
organized and existing under the laws of the United States, any State, or
the District of Columbia and shall expressly assume all the obligations of
the Company under the Debt Securities and coupons and the Indenture;
(b) Immediately after giving effect to the transaction (and treating
any indebtedness that becomes an obligation of the Successor Company or any
subsidiary of the Company as a result of the transaction as having been
incurred by the Successor Company or the subsidiary at the time of the
transaction), no Default or Event of Default would occur or be continuing;
(c) The Successor Company waives any right to redeem any Bearer
Security under circumstances in which the Successor Company would be
entitled to redeem the Bearer Security but the Company would not have been
so entitled to redeem if the consolidation, merger, conveyance, transfer or
lease had not occurred; and
(d) The Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that the consolidation,
merger or transfer complies with the Indenture.
Upon any consolidation by the Company with, or merger by the Company into,
any other person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety as described in the preceding
paragraph, the successor resulting from such consolidation or into which the
Company is merged or the transferee or lessee to which such conveyance, transfer
or lease is made, will succeed to, and be substituted for, and may exercise
every right and power of, the Company under the Indenture, and thereafter,
except in the case of a lease, the predecessor (if still in existence) will be
released from its obligations and covenants under the Indenture and all
outstanding Debt Securities.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with
respect to a series of Debt Securities if (a) the Company has delivered to the
Trustee for cancellation all Debt Securities of that series (with certain
limited exceptions), or (b) all Debt Securities and coupons of the series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year, and the Company shall have
deposited with the Trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all the Debt Securities and coupons of that series
(and if, in either case, the Company shall also pay or cause to be paid all
other sums payable under the Indenture by the Company).
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In addition, the Company shall have a "legal defeasance option" (pursuant
to which it may terminate, with respect to the Debt Securities of a particular
series, all its obligations under the Debt Securities of that series and the
Indenture with respect to the Debt Securities of that series) and a "covenant
defeasance option" (pursuant to which it may terminate, with respect to the Debt
Securities of a particular series, its obligations with respect to the Debt
Securities under certain specified covenants contained in the Indenture). If the
Company exercises its legal defeasance option with respect to a series of Debt
Securities, payment of that series of Debt Securities may not be accelerated
because of an Event of Default. If the Company exercises its covenant defeasance
option with respect to a series of Debt Securities, payment of that series of
Debt Securities may not be accelerated because of an Event of Default related to
the specified covenants.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series only if (a)
the Company irrevocably deposits in trust with the Trustee cash or U.S
Government Obligations (as defined in the Indenture) for the payment of
principal, premium, and interest with respect to that series of Debt Securities
to maturity or redemption, as the case may be, (b) the Company delivers to the
Trustee a certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and interest
when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay the principal, premium and interest
when due with respect to all the Debt Securities of that series to maturity or
redemption, as the case may be, (c) 123 days pass after the deposit is made and
during the 123-day period no default described in clause (g) or (h) under
"Description of Debt Securities -- Events of Default and Remedies" with respect
to the Company occurs that is continuing at the end of the period, (d) no
Default has occurred and is continuing on the date of the deposit and after
giving effect thereto, (e) the deposit does not constitute a default under any
other agreement binding on the Company and, in the case of Subordinated Debt
Securities, is not prohibited by the provisions of the Indenture to
subordination, (f) the Company delivers to the Trustee an opinion of counsel to
the effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940, (g) the Company shall have delivered to the Trustee an opinion of counsel
addressing certain federal income tax matters to the defeasance, and (h) the
Company delivers to the Trustee an officers' certificate and an opinion of
counsel, each stating that all conditions precedent to the defeasance and
discharge of the Debt Securities of the series as contemplated by the Indenture
have been complied with.
The Trustee shall hold in trust cash or U.S. Government Obligations
deposited with it as described above and shall apply the deposited cash and the
proceeds from deposited U.S. Government Obligations to the payment of principal,
premium, and interest with respect to the Debt Securities and coupons of the
defeased series. In the case of Subordinated Debt Securities and coupons related
thereto, the money and U.S. Government Obligations so held in trust will not be
subject to the subordination provisions of the Indenture.
THE TRUSTEE
The Company may appoint a separate Trustee for any series of Debt
Securities. As used herein in the description of a series of Debt Securities,
the term "Trustee" refers to the Trustee appointed with respect to the series of
Debt Securities.
The Company may maintain banking and other commercial relationships with
the Trustee and its affiliates in the ordinary course of business, and the
Trustee may own Debt Securities.
GOVERNING LAW
The Indenture provides that it and the Debt Securities will be governed by,
and construed in accordance with, the laws of the State of New York without
giving effect to applicable principles of conflicts of law to the extent that
the application of the law of another jurisdiction would be required thereby.
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DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 500,000,000 shares
of common stock, par value $.01 per share ("Common Stock"), and 100,000,000
shares of preferred stock, par value $.01 per share ("Preferred Stock"), of
which one share has been designated as Special Preferred Voting Stock.
COMMON STOCK
All shares of Common Stock issued under the Registration Statement of which
this Prospectus is a part will be fully paid and nonassessable. The holders of
Common Stock are entitled to one vote for each share held on all matters
submitted to a vote of common stockholders. The Common Stock does not have
cumulative voting rights. Shares of Common Stock have no preemptive rights,
conversion rights, redemption rights or sinking fund provisions. The Common
Stock is not subject to redemption by the Company.
Subject to the rights of the holders of any class of capital stock of the
Company having any preference or priority over the Common Stock, the holders of
Common Stock are entitled to dividends in such amounts as may be declared by the
Board of Directors from time to time out of funds legally available for such
payments and, in the event of liquidation, to share ratably in any assets of the
Company remaining after payment in full of all creditors and provision for any
liquidation preferences on any outstanding preferred stock ranking prior to the
Common Stock.
PREFERRED STOCK
The Board of Directors, without further stockholder action, is authorized
to issue up to 100,000,000 shares of Preferred Stock in one or more series and
to fix and determine as to any series all the relative rights and preferences of
shares in the series, including voting rights, dividend rights, liquidation
preferences, terms of redemption and conversion rights.
Special Preferred Voting Stock
In connection with the Company's acquisition of Chauvco Resources Ltd., an
Alberta, Canada corporation (the "Chauvco Acquisition"), the Board of Directors
has designated one share of the 100,000,000 authorized shares of Preferred Stock
as Special Preferred Voting Stock (the "Voting Share"). The Montreal Trust
Company of Canada, or any successor thereto (for purposes of this discussion,
the "Share Trustee"), shall hold the Voting Share as trustee for and on behalf
of, and for the use and benefit of, the holders of exchangeable shares (the
"Exchangeable Shares") of Pioneer Natural Resources (Canada) Ltd., an
indirectly-owned subsidiary of the Company ("Pioneer Canada"), and in accordance
with the Voting and Exchange Trust Agreement described in "Description of
Capital Stock -- Pioneer Canada Exchangeable Shares." The Certificate of
Designations for the Voting Share includes the following principal terms:
Dividends. No dividend shall be paid to the Share Trustee as the holder of
the Voting Share.
Voting Rights. The Share Trustee, as the holder of record of the Voting
Share, shall be entitled to all of the voting rights attached to the Voting
Share, including the right to consent to or vote in person or by proxy the
Voting Share, on any matter, question or proposition whatsoever that may
properly come before the stockholders of the Company at a meeting thereof or
with respect to any written consent sought by the Company from its stockholders.
For each Exchangeable Share owned of record on the relevant record date, the
holder thereof shall be entitled to instruct the Share Trustee to cast and
exercise, in the manner instructed, a number of votes (including for purposes of
a quorum) equal to the number of votes to which a holder of one share of Common
Stock is entitled with respect to any matter, proposition or question on which
the holders of Common Stock are entitled to vote. Except as otherwise described
herein or required by law, the holder of the Voting Share will vote together
with the Common Stock as a single class and not as a separate class or series
apart therefrom, including any vote to approve or adopt: (i) any plan of merger,
consolidation or share exchange for which Delaware law requires a stockholder
vote; (ii) any disposition of assets for which Delaware law requires a
stockholder vote; and (iii) any dissolution of the Company for which Delaware
law requires a stockholder vote.
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The holders of Exchangeable Shares have the right to submit stockholder
proposals to the Trustee and the Trustee has agreed pursuant to the Voting and
Exchange Trust Agreement to submit any such proposals to the Company. Such
stockholder proposals may be considered at any meeting of the Company at which
the holders of Common Stock of the Company are entitled to submit stockholder
proposals. The Company has agreed pursuant to the Voting and Exchange Trust
Agreement to accept all stockholder proposals submitted by the Trustee provided
that not more than one proposal is submitted by the Trustee on behalf of any one
holder of Exchangeable Shares.
So long as any Exchangeable Shares are outstanding, the number of shares
comprising the Special Preferred Voting Stock will not be increased or
decreased, and no other term of the Special Preferred Voting Stock may be
amended, except upon the approval of the holder of the Voting Share.
Conversion. The Voting Share is not convertible into any other class or
series of the capital stock of the Company or into cash, property or other
rights.
Redemption. The Voting Share may not be redeemed, except when no
Exchangeable Shares are outstanding, in which case the Voting Share will be
automatically redeemed. The redemption price due and payable upon the automatic
redemption will be $1.00. The Voting Share will be deemed retired and will be
canceled upon any purchase or other acquisition thereof by the Company. After
cancellation, the Voting Share may not be reissued or otherwise disposed of by
the Company.
Liquidation. The Voting Share will rank prior to each share of Common Stock
with respect to the distribution of assets upon a liquidation, dissolution or
winding-up of the Company. In the event of any such liquidation, dissolution or
winding-up, the holder of the Voting Share will be entitled to receive a
liquidation preference of $1.00 before any distribution to the holders of Common
Stock, but only after the liquidation preference of any other shares of
preferred stock of the Company has been paid in full.
Certain Covenants of the Company. For so long as the Voting Share is
outstanding, the Company will (i) fully comply with all terms of the
Exchangeable Shares and with all associated contractual obligations of the
Company, and (ii) not amend, alter or repeal the terms and conditions of the
Special Preferred Voting Stock, except with the approval of the holder of the
Voting Share.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
The Company's Board of Directors is divided into three classes. The
directors of each class are elected for three-year terms, with the terms of the
three classes staggered so that directors from a single class are elected at
each annual meeting of stockholders. Stockholders may remove a director only for
cause. In general, the Board of Directors, not the stockholders, has the right
to appoint persons to fill vacancies on the Board of Directors.
The Amended and Restated Certificate of Incorporation of the Company (the
"Restated Certificate") contains a "fair price" provision that requires the
affirmative vote of the holders of least 80% of the Company's voting stock and
the affirmative vote of at least 66 2/3% of the Company's voting stock not
owned, directly or indirectly, by a Related Person (as defined below) to approve
any merger, consolidation, sale or lease of all or substantially all of the
Company's assets, or certain other transactions involving a Related Person. For
purposes of this fair price provision, a "Related Person" is any person
beneficially owning 10% or more of the voting power of the outstanding capital
stock of the Company who is a party to the transaction at issue. The voting
requirement is not applicable to certain transactions, including those that are
approved by the Continuing Directors (as defined in the Restated Certificate) or
that meet certain "fair price" criteria contained in the Restated Certificate.
The Restated Certificate further provides that stockholders may act only at
annual or special meetings of stockholders and not by written consent, that
special meetings of stockholders may be called only by the Board of Directors,
and that only business proposed by the Board of Directors may be considered at
special meetings of stockholders.
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The Restated Certificate also provides that the only business (including
election of directors) that may be considered at an annual meeting of
stockholders, in addition to business proposed (or persons nominated to be
directors) by the Company's directors, is business proposed (or persons
nominated to be directors) by stockholders who comply with the notice and
disclosure requirements set forth in the Restated Certificate. In general, the
Restated Certificate requires that a stockholder give the Company notice of
proposed business or nominations no later than 60 days before the annual meeting
of stockholders (meaning the date on which the meeting is first scheduled and
not postponements or adjournments thereof) or (if later) ten days after the
first public notice of the annual meeting is sent to common stockholders. In
general, the notice must also contain information about the stockholder
proposing the business or nomination, his interest in the business, and (with
respect to nominations for director) information about the nominee of the nature
ordinarily required to be disclosed in public proxy solicitations. The
stockholder also must submit a notarized letter from each of his nominees
stating the nominee's acceptance of the nomination and indicating the nominee's
intention to serve as director if elected.
The Restated Certificate also restricts the ability of stockholders to
interfere with the powers of the Board of Directors in certain specified ways,
including the constitution and composition of committees and the election and
removal of officers.
The Restated Certificate provides that approval by the holders of at least
66 2/3% of the outstanding voting stock of the Company is required to amend the
provisions of the Restated Certificate discussed above and certain other
provisions, except that (a) approval by the holders of at least 80% of the
outstanding voting stock of the Company together with approval by the holders of
at least 66 2/3% of the outstanding voting stock not owned, directly or
indirectly, by the Related Person, is required to amend the fair price
provisions, and (b) approval of the holders of at least 80% of the outstanding
voting stock of the Company is required to amend the provisions prohibiting
stockholders from acting by written consent.
DELAWARE ANTI-TAKEOVER STATUTE
The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company for three years
following the date that person becomes an interested stockholder unless (a)
before that person became an interested stockholder, the Board of Directors
approved the transaction in which the interested stockholder became an
interested stockholder or approved the business combination, (b) upon completion
of the transaction that resulted in the interested stockholder's becoming an
interested stockholder, the interested stockholder owns at least 85% of the
Company's voting stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of the Company and by
employee stock plans that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer), or (c) following the transaction in which that person
became an interested stockholder, the business combination is approved by the
Board of Directors and authorized at a meeting of stockholders by the
affirmative vote of the holders of at least two-thirds of the outstanding voting
stock of the Company not owned by the interested stockholder.
Under Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of one or certain extraordinary transactions involving the Company
and a person who was not an interested stockholder during the previous three
years or who became an interested stockholder with the approval of a majority of
the Company's directors, if that extraordinary transaction is approved or not
opposed by a majority of the directors before any person became an interested
stockholder in the previous three years or who were recommended for election or
elected to succeed such directors by a majority of such directors then in
office.
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PIONEER CANADA EXCHANGEABLE SHARES
In connection with the Chauvco Acquisition, the Company issued the Voting
Share and entered into the Support Agreement and the Voting and Trust Agreement,
and assumed certain obligations with respect to the Exchangeable Shares issued
by Pioneer Canada. The Exchangeable Shares have the rights and preferences
summarized below.
Voting Rights. The holders of Exchangeable Shares have voting rights or
matters submitted to the holders of the Company's Common Stock as previously
described in "Description of Capital Stock -- Preferred Stock -- Special
Preferred Voting Stock."
Dividends. Holders of Exchangeable Shares will be entitled to receive
dividends equal to dividends paid from time to time by the Company on shares of
the Common Stock. The declaration date, record date and payment date for
dividends on the Exchangeable Shares will be the same as that for the
corresponding dividends on the Common Stock. In the event of the liquidation,
dissolution or winding-up of Pioneer Canada, a holder of Exchangeable Shares
will be entitled to receive for each Exchangeable Share one share of Common
Stock, together with a cash amount equal to the full amount of all unpaid
dividends on the Exchangeable Shares. See "Description of Capital
Stock -- Pioneer Canada Exchangeable Shares -- Voting and Exchange Trust
Agreement." The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be changed only with the approval of the holders
thereof.
Redemption of Exchangeable Shares by Holders. Each Exchangeable Share is
redeemable at the option of the holder for one share of Common Stock plus the
amount equal of unpaid dividends thereon. The redemption price must be delivered
on the date specified by the holder (not less than three nor more than ten
business days after the redemption request) and is payable by Pioneer Canada,
or, if it is unable to do so, by the Company.
Redemption of Exchangeable Shares. Upon at least 120-days prior written
notice by Pioneer Canada to the holders of Exchangeable Shares and subject to
the Company's redemption call right (as described below), on the Automatic
Redemption Date (as defined below) Pioneer Canada will redeem all but not less
than all of the then outstanding Exchangeable Shares for one share of Common
Stock for each Exchangeable Share plus an additional amount equivalent to the
full amount of all unpaid dividends thereon. "Automatic Redemption Date" means
December 18, 2003, unless (a) such date shall be extended at any time or from
time to time to a specified later date by the Board of Directors of Pioneer
Canada but not later than December 31, 2005, or (b) such date shall be
accelerated at any time to a specified earlier date (but no earlier than the
third anniversary of the first issuance of Exchangeable Shares) by the Board of
Directors of Pioneer Canada if at such time there are issued and outstanding
less than 5% of the number of Exchangeable Shares initially issued and
outstanding in the Chauvco Transaction.
Support Agreement
Under the Support Agreement, the Company agreed that: (i) it will not
declare or pay dividends on the Common Stock unless Pioneer Canada is able to
and simultaneously pays an equivalent dividend on the Exchangeable Shares; (ii)
it will advise Pioneer Canada in advance of the declaration of any dividend on
the Common Stock and ensure that the declaration date, record date and payment
date for dividends on the Exchangeable Shares are the same as that for the
Common Stock; (iii) it will take all actions and do all things necessary to
ensure that Pioneer Canada is able to provide to the holders of the Exchangeable
Shares the equivalent number of shares of Common Stock in the event of a
liquidation, dissolution, or winding-up of Pioneer Canada, a redemption request
by a holder of Exchangeable Shares, or a redemption of Exchangeable Shares of
Pioneer Canada; and (iv) it will not vote or otherwise take any action or omit
to take any action causing the liquidation, dissolution or winding-up of Pioneer
Canada.
The Support Agreement also provides that, without the prior approval of
Pioneer Canada and the holders of the Exchangeable Shares, the Company will not
distribute additional shares of Common Stock or rights to subscribe therefor or
other property or assets to all or substantially all holders of shares of Common
Stock, nor change the Common Stock nor effect any tender offer, share exchange
offer, issuer bid, take-over bid or
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similar transaction affecting the Common Stock, unless the same or an equivalent
distribution on or change to the Exchangeable Shares (or in the rights of the
holders thereof) is made simultaneously. The Company has agreed that so long as
there remain outstanding any Exchangeable Shares not owned by the Company or any
entity controlled by the Company, the Company will remain the beneficial owner,
directly or indirectly, of all outstanding shares of Pioneer Canada other than
the Exchangeable Shares.
With certain limited exceptions, the Support Agreement may not be amended
without the approval of the holders of the Exchangeable Shares.
Under the Support Agreement, the Company has agreed not to exercise any
voting rights attached to the Exchangeable Shares owned by it or any entity
controlled by it on any matter considered at meetings of holders of Exchangeable
Shares (including any approval sought from such holders in respect of matters
arising under the Support Agreement).
Voting and Exchange Trust Agreement
Under the terms of the Voting and Exchange Trust Agreement, the Company
will issue and grant to the Share Trustee the (i) rights of the holders of
Exchangeable Shares to direct the voting of the Voting Share in accordance with
the Voting and Exchange Trust Agreement (the "Voting Rights"), and (ii) the
Automatic Exchange Rights (as defined below) and the optional exchange right
granted to the Share Trustee for the use and benefit of the holders of the
Exchangeable Shares pursuant to the Voting and Exchange Trust Agreement to
require the Company to purchase Exchangeable Shares from the holders thereof in
exchange for shares of Common Stock upon the occurrence of a Pioneer Canada
Insolvency Event (as defined herein). "Automatic Exchange Rights" means the
rights granted to the Share Trustee for the benefit of the holders of the
Exchangeable Shares pursuant to the Voting and Exchange Trust Agreement to
automatically exchange the Exchangeable Shares for shares of Common Stock upon a
Pioneer Liquidation Event (as defined herein).
Voting Rights. Under the Voting and Exchange Trust Agreement, the Company
will issue the Voting Share to the Share Trustee for the benefit of the holders
(other than the Company and its subsidiaries) of the Exchangeable Shares. The
Voting Share will have those voting rights with respect to the Company's Common
Stock as previously discussed in "Description of Capital Stock -- Special
Preferred Voting Stock."
Exchange Rights. Under the Voting and Exchange Trust Agreement, the Company
will grant the Exchange Rights (as defined below) to the Trustee for the benefit
of the holders of the Exchangeable Shares. "Exchange Rights" means the Automatic
Exchange Rights and the optional exchange right granted to the Share Trustee for
the use and benefit of the holders of the Exchangeable Shares pursuant to the
Voting and Exchange Trust Agreement to require the Company to purchase
Exchangeable Shares from the holders thereof in exchange for shares of Common
Stock upon the occurrence of a Pioneer Canada Insolvency Event.
Optional Exchange Right. Upon the occurrence and during the continuance of
a Pioneer Canada Insolvency Event, a holder of Exchangeable Shares will be
entitled to instruct the Share Trustee to exercise the optional Exchange Right
with respect to any or all of the Exchangeable Shares held by such holder,
thereby requiring the Company to purchase such Exchangeable Shares from the
holder. Immediately upon the occurrence of a Pioneer Canada Insolvency Event or
any event which may with the passage of time or the giving of notice become a
Pioneer Canada Insolvency Event, Pioneer Canada and the Company will give
written notice thereof to the Share Trustee. As soon as practicable thereafter,
the Trustee will notify each holder of Exchangeable Shares of such event or
potential event and will advise the holder of its rights with respect to the
optional Exchange Right. "Pioneer Canada Insolvency Event" means any insolvency
or bankruptcy proceeding instituted by or against Pioneer Canada, including any
such proceeding under the Companies' Creditors Arrangement Act (Canada) and the
Bankruptcy and Insolvency Act (Canada) and the admission in writing by Pioneer
Canada of its inability to pay its debts generally as they become due and the
inability of Pioneer Canada, as a result of solvency requirements of applicable
law, to redeem any Exchangeable Shares tendered for redemption.
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The consideration for each Exchangeable Share to be acquired under the
optional Exchange Right will be one share of Common Stock plus an additional
amount equivalent to the full amount of all dividends declared and unpaid on the
Exchangeable Share.
If, as a result of liquidity or solvency provisions of applicable law,
Pioneer Canada is unable to redeem all of the Exchangeable Shares tendered for
redemption by a holder in accordance with the Exchangeable Share Provisions, the
holder will be deemed to have exercised the optional Exchange Right with respect
to the unredeemed Exchangeable Shares and the Company will be required to
purchase such shares from the holder in the manner set forth above.
Automatic Exchange Right. In the event of a Pioneer Liquidation Event, the
Company will be required to acquire each outstanding Exchangeable Share by
exchanging one share of Common Stock for each such Exchangeable Share, plus an
additional amount equivalent to the full amount of all declared and unpaid
dividends on the Exchangeable Shares. "Pioneer Liquidation Event" means: (i) any
determination by the Company's Board of Directors to institute voluntary
liquidation, dissolution or winding-up proceedings with respect to the Company
or to effect any other distribution of assets of the Company among its
stockholders for the purpose of winding up its affairs; or (ii) immediately upon
the earlier of (A) receipt by the Company of notice of, and (B) the Company
becoming aware of any threatened or instituted claim, suit, petition or other
proceeding with respect to the involuntary liquidation, dissolution or
winding-up of the Company or to effect any other distribution of assets of the
Company among its stockholders for the purpose of winding-up its affairs.
Delivery of Common Stock
The Company has agreed to ensure that all shares of Common Stock to be
delivered by it under the Support Agreement or on the exercise of the Exchange
Rights under the Voting and Exchange Trust Agreement are duly registered,
qualified or approved under applicable Canadian and United States securities
laws, if required so that such shares may be freely traded by the holder thereof
(other than any restriction on transfer by reason of a holder being a "control
person" of the Company for purposes of Canadian law or an "affiliate" of the
Company for purposes of United States law). In addition, the Company will take
all actions necessary to cause all such shares of Common Stock to be listed or
quoted for trading on all stock exchanges or quotation systems on which
outstanding shares of Common Stock are then listed or quoted for trading.
Call Rights
The following section describes (i) the right of the Company, in the event
of a proposed liquidation, dissolution or winding-up of Pioneer Canada, to
purchase all of the outstanding Exchangeable Shares from the holders thereof on
the effective date of any such liquidation, dissolution or winding-up in
exchange for shares of Common Stock pursuant to the Plan of Arrangement (the
"Liquidation Call Right"), (ii) the right of the Company to purchase all of the
outstanding Exchangeable Shares from the holders thereof on the Automatic
Redemption Date in exchange for shares of Common Stock pursuant to the Plan of
Arrangement, and (iii) the overriding right of the Company, in the event of a
proposed redemption of Exchangeable Shares by a holder thereof, to purchase from
such holder on the redemption date the Exchangeable Shares tendered for
redemption in exchange for shares of Common Stock pursuant to the Exchangeable
Share Provisions.
Optional Redemption by the Holders. Pursuant to the Exchangeable Share
Provisions, a holder requesting Pioneer Canada to redeem the Exchangeable Shares
will be deemed to offer such shares to the Company, and the Company will have an
overriding redemption call right to acquire all but not less than all of the
Exchangeable Shares that the holder has requested Pioneer Canada to redeem in
exchange for one share of Common Stock for each Exchangeable Share, plus an
additional amount equivalent to the full amount of all declared and unpaid
dividends thereon.
At the time of a redemption request by a holder of Exchangeable Shares,
Pioneer Canada will immediately notify the Company. The Company must then advise
Pioneer Canada within two business days as to whether the Company will exercise
its redemption call right. If the Company does not advise Pioneer Canada within
such two business day period, Pioneer Canada will notify the holder as soon as
possible
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thereafter that the Company will not exercise its redemption call right. A
holder may revoke his or her redemption request, at any time prior to the close
of business on the business day preceding the redemption date, in which case the
holder's Exchangeable Shares will neither be purchased by the Company nor
redeemed by Pioneer Canada. If the holder does not revoke his or her redemption
request, on the redemption date the Exchangeable Shares that the holder has
requested Pioneer Canada to redeem will be acquired by the Company (assuming the
Company exercises its redemption call right) or redeemed by Pioneer Canada, as
the case may be, in each case for one share of Common Stock for each
Exchangeable Share plus an additional amount equal to the full amount of all
declared and unpaid dividends on the Exchangeable Shares.
Liquidation Call Right. Pursuant to the Plan of Arrangement, the Company
will be granted an overriding Liquidation Call Right, in the event of and
notwithstanding a proposed Pioneer Canada Insolvency Event, to acquire all but
not less than all of the Exchangeable Shares then outstanding in exchange for
Common Stock and, upon the exercise by the Company of the Liquidation Call
Right, the holders thereof will be obligated to transfer such shares to the
Company. The acquisition by the Company of all of the outstanding Exchangeable
Shares upon the exercise of the Liquidation Call Right will occur on the
effective date of the voluntary or involuntary liquidation, dissolution or
winding-up of Pioneer Canada.
Optional Redemption by the Company. Pursuant to the Plan of Arrangement,
the Company will be granted an overriding redemption call right, notwithstanding
the proposed automatic redemption of the Exchangeable Shares by Pioneer Canada
pursuant to the Exchangeable Share Provisions, to acquire on the Automatic
Redemption Date all but not less than all of the Exchangeable Shares then
outstanding in exchange for Common Stock plus an additional amount equal to the
full amount of all declared and unpaid dividends on the Exchangeable Shares and,
upon the exercise by the Company of the redemption call right, the holders
thereof will be obligated to transfer such shares to the Company.
Effect of Call Right Exercise. If the Company exercises one or more of its
call rights, it will directly issue shares of Common Stock to holders of
Exchangeable Shares and will become the holder of such Exchangeable Shares. The
Company will not be entitled to exercise any voting rights attached to the
Exchangeable Shares it so acquires. If the Company declines to exercise its call
rights when applicable, it will be required, pursuant to the Support Agreement,
to issue shares of Common Stock to Pioneer Canada which will, in turn, transfer
such stock to the holders of Exchangeable Shares in consideration for the return
and cancellation of such Exchangeable Shares.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below), Depositary Shares (as
defined below) and Depositary Receipts (as defined below) does not purport to be
complete and is subject to and qualified in its entirety by reference to the
forms of Deposit Agreement and Depositary Receipts to each series of Preferred
Stock that will be filed with the SEC in connection with the offering of the
series of Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
depositary to the public of receipts for depositary shares ("Depositary
Shares"), each of which will represent fractional interests of a particular
series of Preferred Stock (which will be set forth in the Prospectus Supplement
to a particular series of Preferred Stock).
The shares of any series of Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50 million. The Prospectus Supplement to a
series of Depositary Shares will set forth the name and address of the
depositary with respect to the Depositary Shares. Subject to the terms of the
Deposit Agreement, each owner of Depositary Shares will be entitled, in
proportion to the applicable fractional
24
<PAGE> 55
interests in shares of Preferred Stock underlying the Depositary Shares, to all
the rights and preferences of the Preferred Stock underlying the Depositary
Shares (including dividend, voting, redemption, conversion, and liquidation
rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional
interests in shares of the related series of Preferred Stock in accordance with
the terms of the offering described in the related Prospectus Supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to Preferred Stock to the record holders of
Depositary Shares to the Preferred Stock in proportion to the numbers of the
Depositary Shares owned by the holders on the relevant record date. The
depositary shall distribute only the amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and the balance not so distributed shall be added to and treated as part of the
next sum received by the depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the depositary determines that it is not feasible to
make the distribution, in which case the depositary may, with the approval of
the Company, sell the property and distribute the net proceeds from the sale to
the holders.
The Deposit Agreement will also contain provisions to the manner in which
any subscription or similar rights offered by the Company to holders of the
Preferred Stock shall be made available to the holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the depositary resulting from the redemption, in whole or in part,
of the series of the Preferred Stock held by the depositary. The depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to the series of
the Preferred Stock. Whenever the Company redeems shares of Preferred Stock held
by the depositary, the depositary will redeem as of the same redemption date the
number of Depositary Shares to shares of Preferred Stock so redeemed. If less
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the money, securities,
or other property payable upon the redemption and any money, securities, or
other property to which the holders of the Depositary Shares were entitled upon
the redemption upon surrender to the depositary of the Depositary Receipts
evidencing the Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the depositary will mail the information contained
in the notice of meeting to the record holders of the Depositary Shares to the
Preferred Stock. Each record holder of the Depositary Shares on the record date
(which will be the same date as the record date for the Preferred Stock) will be
entitled to instruct the depositary as to the exercise of the voting rights
pertaining to the number of shares of Preferred Stock underlying the holder's
Depositary Shares. The depositary will endeavor, insofar as practicable, to vote
the number of shares of Preferred Stock underlying the Depositary Shares in
accordance with the instructions, and the Company will
25
<PAGE> 56
agree to take all action that may be deemed necessary by the depositary in order
to enable the depositary to do so.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the depositary. However, any amendment that materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless the amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the depositary only if (a)
all outstanding Depositary Shares thereto have been redeemed or, (b) there has
been a final distribution with respect to the Preferred Stock of the relevant
series in connection with any liquidation, dissolution, or winding up of the
Company and the distribution has been distributed to the holders of the related
Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay transfer and other taxes and governmental charges and the other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the depositary,
any such resignation or removal to take effect upon the appointment of a
successor depositary and its acceptance of the appointment. The successor
depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50 million.
MISCELLANEOUS
The depositary will forward to the holders of Depositary Shares all reports
and communications from the Company that are delivered to the depositary and
that the Company is required to furnish to the holders of the Preferred Stock.
Neither the depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding with respect to any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares, or other persons
believed to be competent and on documents believed to be genuine.
26
<PAGE> 57
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock or Common Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from any such Offered
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Warrant Agent"). The Warrant Agent
will act solely as an agent of the Company in connection with the Warrants and
will not assume any obligation or relationship of agency or trust for or with
any holders or beneficial owners of Warrants. The following summary of certain
provisions of the Warrants does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the provisions of the Warrant
Agreement that will be filed with the SEC in connection with the offering of the
Warrants.
DEBT WARRANTS
The Prospectus Supplement to a particular issue of Debt Warrants will
describe the terms of the Debt Warrants, including the following: (a) the title
of the Debt Warrants; (b) the offering price for the Debt Warrants, if any; (c)
the aggregate number of the Debt Warrants; (d) the designation and terms of the
Debt Securities purchasable upon exercise of the Debt Warrants; (e) if
applicable, the designation and terms of the Debt Securities with which the Debt
Warrants are issued and the number of the Debt Warrants issued with each Debt
Security; (f) if applicable, the date from and after which the Debt Warrants and
any Debt Securities issued therewith will be separately transferable; (g) the
principal amount of Debt Securities purchasable upon exercise of a Debt Warrant
and the price at which the principal amount of Debt Securities may be purchased
upon exercise (which price may be payable in cash, securities, or other
property); (h) the date on which the right to exercise the Debt Warrants shall
commence and the date on which the right shall expire; (i) if applicable, the
minimum or maximum amount of the Debt Warrants that may be exercised at any one
time; (j) whether the Debt Warrants represented by the Debt Warrant certificates
or Debt Securities that may be issued upon exercise of the Debt Warrants will be
issued in registered or bearer form; (k) information with respect to book- entry
procedures, if any; (l) the currency or currency units in which the offering
price, if any, and the exercise price are payable; (m) if applicable, a
discussion of material United States federal income tax considerations; (n) the
antidilution provisions of the Debt Warrants, if any; (o) the redemption or call
provisions, if any, applicable to the Debt Warrants; and (p) any additional
terms of the Debt Warrants, including terms, procedures, and limitations to the
exchange and exercise of the Debt Warrants.
STOCK WARRANTS
The Prospectus Supplement to any particular issue of Preferred Stock
Warrants or Common Stock Warrants will describe the terms of the Warrants,
including the following: (a) the title of the Warrants; (b) the offering price
for the Warrants, if any; (c) the aggregate number of the Warrants; (d) the
designation and terms of the Common Stock or Preferred Stock purchasable upon
exercise of the Warrants; (e) if applicable, the designation and terms of the
Offered Securities with which the Warrants are issued and the number of the
Warrants issued with each Offered Security; (f) if applicable, the date from and
after which the Warrants and any Offered Securities issued therewith will be
separately transferable; (g) the number of shares of Common Stock or Preferred
Stock purchasable upon exercise of a Warrant and the price at which the shares
may be purchased upon exercise (which price may be payable in cash, securities,
or other property); (h) the date on which the right to exercise the Warrants
shall commence and the date on which the right shall expire; (i) if applicable,
the minimum or maximum amount of the Warrants that may be exercised at any one
time; (j) the currency or currency units in which the offering price, if any,
and the exercise price are payable; (k) if applicable, a discussion of material
United States federal income tax considerations; (l) the antidilution provisions
of the Warrants, if any; (m) the redemption or call provisions, if any,
applicable to the Warrants; and (n) any additional terms of the Warrants,
including terms, procedures and limitations to the exchange and exercise of the
Warrants.
27
<PAGE> 58
DESCRIPTION OF GUARANTEES
Pioneer USA may issue Guarantees in connection with Debt Securities offered
by any Prospectus Supplement. The following summary of certain provisions of the
Guarantees does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the form of Guarantee that will
be filed with the SEC in connection with the offering of Guarantees. Each
Guarantee will be issued under the Indenture. The Prospectus Supplement to a
particular issue of Guarantees will describe the terms of the Guarantees,
including the following: (a) the series of Debt Securities to which the
Guarantees apply; (b) whether the Guarantees are secured or unsecured; (c)
whether the Guarantees are conditional or unconditional; (d) whether the
Guarantees are senior or subordinate to other Guarantees or debt; (e) the terms
under which the Guarantees may be amended, modified, waived, released or
otherwise terminated, if different from the provisions applicable to the
guaranteed Debt Securities; and (f) any additional terms of the Guarantees.
PLAN OF DISTRIBUTION
The Company or Pioneer USA may sell the Offered Securities within or
outside the United States through underwriters, brokers or dealers, directly to
one or more purchasers, or through agents. The Prospectus Supplement with
respect to the Offered Securities will set forth the terms of the offering of
the Offered Securities, including the name or names of any underwriters, dealers
or agents, the purchase price of the Offered Securities and the proceeds to the
Company or Pioneer USA from the sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwriters' compensation,
the initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers, and any securities exchanges on which the Offered
Securities may be listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement to the offering, and if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover of the Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement thereto, the obligations of the underwriters or agents to
purchase the Offered Securities will be subject to conditions precedent and the
underwriters will be obligated to purchase all the Offered Securities if any are
purchased. The initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
The Company or Pioneer USA may also sell the Offered Securities pursuant to
one or more standby agreements with one or more underwriters in connection with
the call for redemption of a specified class or series of any securities of the
Company or any subsidiary of the Company. In such a standby agreement, the
underwriter or underwriters would agree either (a) to purchase from the Company
up to the number of shares of Common Stock that would be issuable upon
conversion of all the shares of the class or series of securities of the Company
or its subsidiary at an agreed price per share of Common Stock, or (b) to
purchase from the Company or Pioneer USA up to a specified dollar amount of
Offered Securities at an agreed price per Offered Security which price may be
fixed or may be established by formula or other method and which may or may not
relate to market prices of the Common Stock or any other security of the Company
then outstanding. The underwriter or underwriters would also agree, if
applicable, to convert into Common Stock or other security of the Company any
securities of the class or series held or purchased by the underwriter or
underwriters. The underwriter or underwriters may assist in the solicitation of
conversions by holders of the class or series of securities.
If dealers are used in the sale of Offered Securities with respect to which
this Prospectus is delivered, the Company or Pioneer USA will sell the Offered
Securities to the dealers as principals. The dealers may then resell the Offered
Securities to the public at varying prices to be determined by the dealers at
the time of
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<PAGE> 59
resale. The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement thereto.
Offered Securities may be sold directly by the Company or Pioneer USA or
through agents designated by the Company or Pioneer USA from time to time at
fixed prices, which may be changed, or at varying prices determined at the time
of sale. Any agent involved in the offer or sale of the Offered Securities with
respect to which this Prospectus is delivered will be named, and any commissions
payable by the Company to the agent will be set forth, in the Prospectus
Supplement thereto. Unless otherwise indicated in the Prospectus Supplement, any
agent will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Offered Securities, underwriters or
agents may receive compensation from the Company or Pioneer USA or from
purchasers of Offered Securities for whom they may act as agents in the form of
discounts, concessions, or commissions. Underwriters, agents, and dealers
participating in the distribution of the Offered Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the Company
or Pioneer USA and any profit on the resale of the Offered Securities by them
may be deemed to be underwriting discounts or commissions under the Securities
Act.
If so indicated in the Prospectus Supplement, the Company or Pioneer USA
will authorize agents, underwriters or dealers to solicit offers from certain
types of institutions to purchase Offered Securities from the Company or Pioneer
USA at the public offering price set forth in the Prospectus Supplement pursuant
to delayed delivery contracts providing for payment and delivery on a specified
date in the future. The contracts will be subject only to those conditions set
forth in the Prospectus Supplement, and the Prospectus Supplement will set forth
the commission payable for solicitation of the contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company or Pioneer USA to indemnification by the Company or
Pioneer USA against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments that the agents,
dealers or underwriters may be required to make with respect thereto. Agents,
dealers and underwriters may be customers of, engage in transactions with, or
perform services for the Company or Pioneer USA in the ordinary course of
business.
The Offered Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be a market for the Offered
Securities.
LEGAL OPINIONS
Certain legal matters in connection with the Offered Securities will be
passed upon for the Company and Pioneer USA by Vinson & Elkins L.L.P., Dallas,
Texas, and for any underwriters or agents by a firm named in the Prospectus
Supplement to a particular issue of Offered Securities.
EXPERTS
The Consolidated Financial Statements of the Company (successor to Parker &
Parsley and subsidiaries) have been incorporated by reference in this
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing. The report of KPMG Peat Marwick LLP refers
to a change in the method of accounting for the impairment of long-lived assets
and for long-lived assets to be disposed of in 1995 and a change in the method
of accounting for income taxes in 1993.
The Consolidated Financial Statements of Mesa incorporated by reference in
this Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said report.
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<PAGE> 60
The Financial Statements of Greenhill Petroleum Corporation incorporated by
reference in this Registration Statement, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
The Consolidated Financial Statements of Chauvco Resources Ltd.
incorporated by reference in this Registration Statement have been audited by
Price Waterhouse, chartered accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said report.
The estimates of the proved reserves of the Company (successor to Parker &
Parsley and subsidiaries) as of December 31, 1996, incorporated by reference in
this Registration Statement, are based upon a reserve report prepared by the
Company and audited by Netherland, Sewell & Associates, Inc., independent
petroleum consultants, and are incorporated by reference herein upon the
authority of such firm as experts with respect to such matters covered by such
report.
The estimates of Mesa's proved reserves as of December 31, 1996,
incorporated by reference in this Registration Statement with respect to its
Hugoton and West Panhandle field properties are based upon a reserve report
prepared by Williamson Petroleum Consultants, Inc., independent petroleum
consultants, and are incorporated by reference herein upon the authority of such
firm as experts with respect to such matters covered by such report. The
estimates of Greenhill Petroleum Corporation's proved reserves as of December
31, 1996, incorporated by reference in this Registration Statement pursuant to
items 10 and 16 under the section entitled "Incorporation of Certain Documents
By Reference" in this Registration Statement, are based upon a reserve report
prepared by Miller and Lents, Ltd., independent petroleum consultants, and are
incorporated by reference herein upon the authority of such firm as experts with
respect to such matters covered by such report.
The estimates of Chauvco Resources Ltd. proved reserves as of December 31,
1996, incorporated by reference in this Registration Statement, are based upon
reserve reports prepared by Gilbert Lausten Jung Associates, Ltd. and Martin
Petroleum and Associates, independent petroleum consultants, and are
incorporated by reference herein upon the authority of such firm as experts with
respect to such matters covered by such report.
30
<PAGE> 61
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER
OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Forward-Looking Statements............ S-2
Summary............................... S-3
Use of Proceeds....................... S-13
Capitalization........................ S-14
Description of Notes.................. S-14
Underwriting.......................... S-26
Legal Opinions........................ S-28
Independent Auditors.................. S-28
Reserve Engineers..................... S-28
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Issuers........................... 3
Use of Proceeds....................... 4
Ratios of Earnings to Fixed Charges
and Earnings to Fixed Charges and
Preferred Stock Dividends........... 4
Description of Debt Securities........ 4
Description of Capital Stock.......... 18
Description of Depositary Shares...... 24
Description of Warrants............... 27
Description of Guarantees............. 28
Plan of Distribution.................. 28
Legal Opinions........................ 29
Experts............................... 29
</TABLE>
======================================================
======================================================
$600,000,000
PIONEER NATURAL
RESOURCES COMPANY
% SENIOR NOTES DUE 2008
% SENIOR NOTES DUE 2028
LOGO
-------------
PROSPECTUS SUPPLEMENT
JANUARY , 1998
-------------
SALOMON SMITH BARNEY
CHASE SECURITIES INC.
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
NATIONSBANC MONTGOMERY SECURITIES
======================================================
<PAGE> 62
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 -- OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses to be incurred by the
registrant, Pioneer Natural Resources Company (the "Company"), in connection
with the issuance and distribution of the securities being registered. Except
for the Securities and Exchange Commission registration fee, all amounts shown
are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $265,500
Accounting fees and expenses................................ 20,000
Legal fees and expenses..................................... 150,000
Transfer agent's fees and expenses.......................... 10,000
Blue Sky fees and expenses, including counsel fees.......... 1,000
Fees of rating agencies..................................... 180,000
Listing fees................................................ 24,500
Printing and engraving expenses............................. 100,000
Miscellaneous............................................... 10,000
--------
Total............................................. $761,000
========
</TABLE>
ITEM 15 -- INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Twelfth of the Amended and Restated Certificate of Incorporation of
the registrant provides that the registrant must indemnify its officers and
directors to the extent allowed by the Delaware General Corporation Law.
Pursuant to Section 145 of the Delaware General Corporation Law, the registrant
generally has the power to indemnify its present and former directors and
officers against expenses and liabilities incurred by them in connection with
any suit to which they are, or are threatened to be made, a party by reason of
their serving in those positions so long as they acted in good faith and in a
manner they reasonably believed to be in, or not opposed to, the best interests
of the registrant, and with respect to any criminal action, they had no
reasonable cause to believe their conduct was unlawful. With respect to suits by
or in the right of the registrant, however, indemnification is generally limited
to attorneys' fees and other expenses and is not available if the person is
adjudged to be liable to the registrant unless the court determines that
indemnification is appropriate. The statute expressly provides that the power to
indemnify authorized thereby is not exclusive of any rights granted under any
by-law, agreement, vote of stockholders or disinterested directors, or
otherwise. The registrant also has the power to purchase and maintain insurance
for its directors and officers. Additionally, Article Twelfth of the Amended and
Restated Certificate of Incorporation provides that, in the event that an
officer or director files suit against the registrant seeking indemnification of
liabilities or expenses incurred, the burden will be on the registrant to prove
that the indemnification would not be permitted under the Delaware General
Corporation Law.
The registrant has entered into Indemnification Agreements with each of its
directors and officers. These agreements provide that the registrant must
indemnify an officer or director for liabilities incurred to the fullest extent
permitted by the Delaware General Corporation Law. The registrant must, within
ten days of a request, indemnify an officer or director for expenses incurred in
the defense of a claim or other proceeding. The obligation of the registrant to
provide the indemnification does not apply if, before the date on which the
registrant must provide the indemnification, the registrant's Board of
Directors, or a representative chosen by the Board of Directors, concludes that
indemnification would be improper under the Delaware General Corporation Law.
The preceding discussion of the registrant's Amended and Restated
Certificate of Incorporation, Section 145 of the Delaware General Corporation
Law, and the Indemnification Agreements is not intended to be exhaustive and is
qualified in its entirety by the Amended and Restated Certificate of
Incorporation, Section 145 of the Delaware General Corporation Law, and the
Indemnification Agreements.
II-1
<PAGE> 63
ITEM 16 -- EXHIBITS
There are filed with the Registration Statement the following exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1* -- Underwriting Agreement.
2.1 -- Amended and Restated Agreement and Plan of Merger, dated
as of April 6, 1997, by and among MESA Inc. ("Mesa"),
Mesa Operating Co. ("MOC"), MXP Reincorporation Corp. and
Parker & Parsley Petroleum Company ("Parker & Parsley")
(incorporated by reference to Exhibit 2.1 to the
Company's Registration Statement on Form S-4, dated June
27, 1997, Registration No. 333-26951).
2.2+ -- Combination Agreement, dated as of September 3, 1997,
between the Company and Chauvco Resources Ltd.
("Chauvco").
2.3 -- Plan of Arrangement under Section 186 of the Business
Corporations Act (Alberta) (incorporated by reference to
Exhibit 2.2 to the Company's Current Report on Form 8-K,
File No. 001-13245, filed with the SEC on January 2,
1998).
2.4 -- Support Agreement between the Company and Pioneer Natural
Resources (Canada) Ltd. (incorporated by reference to
Exhibit 2.3 to the Company's Current Report on Form 8-K,
File No. 001-13245, filed with the SEC on January 2,
1998).
2.5 -- Voting and Exchange Trust Agreement among the Company,
Pioneer Natural Resources (Canada) Ltd. and Montreal
Trust Company of Canada, as Trustee (incorporated by
reference to Exhibit 2.4 to the Company's Current Report
on Form 8-K, File No. 001-13245, filed with the SEC on
January 2, 1998).
2.6+ -- Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among the Company and Guy J.
Turcotte.
2.7 -- Shareholders Agreement, dated as of September 3, 1997, by
and among the Company, Chauvco, DNR-MESA Holdings, L.P.
("DNR"), Scott D. Sheffield and I. Jon Brumley
(incorporated by reference to Exhibit 2.3 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on October 2, 1997).
2.8 -- Shareholders Agreement, dated as of September 3, 1997, by
and among the Company, Trimac Corporation and Gendis Inc.
(incorporated by reference to Exhibit 2.4 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on October 2, 1997).
3.1 -- Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-4,
Registration No. 333-26951).
3.2 -- Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on
Form S-4, Registration No. 333-26951).
3.3+ -- Certificate of Designations of Special Preferred Voting
Stock.
3.4 -- Terms and Conditions of Exchangeable Shares (incorporated
by reference to Annex F to the Definitive Joint
Management Information Circular and Proxy Statement of
the Company and Chauvco Resources Ltd., File No.
001-13245, filed with the SEC on November 17, 1997).
4.1 -- Form of Certificate of Common Stock, par value $.01 per
share, of the Company (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4, Registration No. 333-26951).
4.2** -- Form of Indenture between the Company and one or more
commercial banks to be named, as trustee.
</TABLE>
II-2
<PAGE> 64
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.3* -- Form of Senior Debt Security.
4.4* -- Form of Subordinated Debt Security.
4.5* -- Form of Deposit Agreement.
4.6* -- Form of Depositary Receipt.
4.7* -- Form of Warrant Agreement.
4.8* -- Form of Warrant Certificate.
4.9* -- Form of Guarantee.
4.10 -- Form of Certificate of Special Preferred Voting Stock
(incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
4.11 -- Form of Certificate of Exchangeable Shares (incorporated
by reference to Exhibit 4.2 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
5.1** -- Form of opinion of Vinson & Elkins L.L.P. as to the
legality of the securities to be registered.
9.1 -- Shareholder Agreement, dated as of April 6, 1997, between
Mesa, Boone Pickens and Parker & Parsley (incorporated by
reference to Exhibit 2.4 of Mesa's Form 8-K filed April
8, 1997).
9.2 -- Shareholders Agreement, dated as of April 6, 1997,
between DNR and Mesa (incorporated by reference to
Exhibit 2.2 of Mesa's Form 8-K filed April 8, 1997).
10.1 -- Indenture, dated July 2, 1996, among Pioneer Natural
Resources USA, Inc. ("Pioneer USA") (formerly MOC), as
Issuer, the Company (Mesa's successor), as Guarantor, and
Harris Trust and Savings Bank, as Trustee, relating to
the 11 5/8% Senior Subordinated Discount Notes Due 2006
(incorporated by reference to Exhibit 4.17 of Mesa's Form
10-Q dated August 13, 1996).
10.2 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC), as Issuer, Mesa, the
subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.1
(incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
10.3 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.1
(incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
10.4 -- Indenture, dated July 2, 1996, among Pioneer USA
(formerly MOC), as Issuer, the Company (Mesa's
successor), as Guarantor, and Harris Trust and Savings
Bank, as Trustee, relating to 10 5/8% Senior Subordinated
Notes Due 2006 (incorporated by reference to Exhibit 4.18
of Mesa's Form 10-Q, dated August 13, 1996).
</TABLE>
II-3
<PAGE> 65
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.5 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC), as Issuer, Mesa, the
subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.4
(incorporated by reference to Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
10.6 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.4
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
10.7 -- Indentures relating to $50,000,000 principal amount of
8 1/2% Convertible Subordinated Debentures due 2005 of
Dorchester Master Limited Partnership ($3,762,000
principal amount of which were outstanding and held by
non affiliates at December 31, 1996) and $100,000,000
principal amount of 9 1/2% Senior Notes due 2000 of
Bridge Oil (U.S.A.) Inc. ($2,063,000 principal amount of
which were outstanding at December 31, 1996) have been
omitted pursuant to Item 601(b)(4)(iii)(A) of Regulation
S-K. The Company hereby agrees to furnish a copy of the
indentures to the Securities and Exchange Commission upon
request (incorporated by reference to Parker & Parsley's
Form 10-K, dated December 31, 1996).
10.8 -- Indenture, dated April 12, 1995, between Pioneer USA
(successor to Parker & Parsley), and The Chase Manhattan
Bank (National Association), as Trustee (incorporated by
reference to Exhibit 4.1 to Parker & Parsley's Current
Report on Form 8-K, dated April 12, 1995, File No.
1-10695).
10.9 -- First Supplemental Indenture, dated as of August 7, 1997,
among Parker & Parsley, The Chase Manhattan Bank, as
Trustee, and Pioneer USA, with respect to the indenture
identified above as Exhibit 10.8 (incorporated by
reference to Exhibit 10.5 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30,
1997, File No. 001-13245).
10.10 -- Form of 8 7/8% Senior Notes Due 2005, dated as of April
12, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate dated
April 12, 1995, establishing the terms of the 8 7/8%
Senior Notes Due 2005 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by
reference to Exhibit 4.2 to Parker & Parsley's Quarterly
Report on Form 10-Q for the period ended June 30, 1995,
File No. 1-10695).
10.11 -- Form of 8 1/4% Senior Notes due 2007, dated as of August
22, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate, dated
August 22, 1995, establishing the terms of the 8 1/4%
Senior Notes due 2007 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by
reference to Exhibit 1.2 to Parker & Parsley's Current
Report on Form 8-K, dated August 17, 1995, File No.
1-10695).
10.12 -- Agreement of Sale between Pioneer Corporation and Cabot
Corporation, dated August 29, 1984 (incorporated by
reference to Exhibit 10.5 to Pioneer Corporation's Form
10-K, dated December 31, 1985).
</TABLE>
II-4
<PAGE> 66
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.13 -- Settlement Agreement, dated March 15, 1989, by and among
Mesa Operating Limited Partnership and Mesa Limited
Partnership, et al., Energas Company and the City of
Amarillo (incorporated by reference to Exhibit 10(k) to
Mesa Limited Partnership's Form 10-K, dated December 31,
1990).
10.14 -- Gas Purchase Agreement, dated December 1, 1989, between
Williams Natural Gas Company and Mesa Operating Limited
Partnership acting on behalf of itself and as agent for
Mesa Midcontinent Limited Partnership (incorporated by
reference to Exhibit 10.1 to Registration Statement of
Mesa Limited Partnership on Form S-3, Registration No.
33-32978).
10.15 -- "B" Contract Production Allocation Agreement, dated July
29, 1991, and effective as of January 1, 1991, between
Colorado Interstate Gas Company and Mesa Operating
Limited Partnership (incorporated by reference to Exhibit
10(r) to Mesa's Form 10-K, dated December 31, 1991).
10.16 -- Amendment to "B" Contract Production Allocation Agreement
effective as of January 1, 1993, between Colorado
Interstate Gas Company and Mesa Operating Limited
Partnership (incorporated by reference to Exhibit 10.24
to Mesa's Registration Statement on Form S-1,
Registration No. 033-51909).
10.17 -- Amended Peak Day Gas Purchase Agreement, dated effective
June 19, 1991, between Colorado Interstate Gas Company
and Mesa Operating Limited Partnership (incorporated by
reference to Exhibit 10(t) to Mesa's Form 10-K, dated
December 31, 1991).
10.18 -- Omnibus Amendment to Collateral Instruments to
Supplemental Stipulation and Agreement, dated June 19,
1991, between Colorado Interstate Gas Company and Mesa
Operating Limited Partnership (incorporated by reference
to Exhibit 10(u) to Mesa's Form 10-K, dated December 31,
1991).
10.19 -- Amarillo Supply Agreement between Mesa Operating Limited
Partnership, Seller, and Energas Company, a division of
Atmos Energy Corporation, Buyer, dated effective January
2, 1993 (incorporated by reference to Exhibit 10.14 to
Mesa's Form 10-K dated, December 31, 1995).
10.20 -- Gas Supply Agreement, dated May 11, 1994, between MOC, as
successor to Mesa Operating Limited Partnership, acting
on behalf of itself and as agent for Hugoton Capital
Limited Partnership, and Williams Gas Marketing Company,
and Gas Supply Guarantee, dated May 11, 1994
(incorporated by reference to Exhibit 10.16 to Mesa's
Form 10-K, dated December 31, 1995).
10.21 -- Gas Transportation Agreement, dated June 14, 1994,
between Western Resources, Inc. and MOC, acting on behalf
of itself and as agent for Hugoton Capital Limited
Partnership (incorporated by reference to Exhibit 10.24
to Mesa's Form 10-K, dated December 31, 1994).
10.22 -- 1991 Stock Option Plan of Mesa (incorporated by reference
to Exhibit 10(v) to Mesa's Form 10-K, dated December 31,
1991).
10.23 -- Interruptible Gas Transportation and Sales Agreement,
dated January 1, 1991, between Mesa Operating Limited
Partnership and Energas Company and Amendment, dated
January 1, 1995 (incorporated by reference to Exhibit
10.22 to Mesa's Form 10-K, dated December 31, 1995).
10.24 -- "B" Contract Operating Agreement, dated January 1, 1988,
between Mesa Operating Limited Partnership and Colorado
Interstate Gas Company (incorporated by reference to
Exhibit 10.23 to Mesa's Form 10-K, dated December 31,
1995).
</TABLE>
II-5
<PAGE> 67
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.25 -- Gathering Agreement, dated May 29, 1987, between Mesa
Operating Limited Partnership and Colorado Interstate Gas
Company (incorporated by reference to Exhibit 10.15 to
the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997, File No. 001-13245).
10.26 -- Amendment to Gathering Agreement, dated July 15, 1990,
between Colorado Interstate Gas Company and Mesa
Operating Limited Partnership (incorporated by reference
to Exhibit 10.24 to Mesa's Form 10-K, dated December 31,
1995).
10.27 -- Amendment to 1990 Gathering Agreement Amendment, dated
September 1, 1997, between Colorado Interstate Gas
Company and Pioneer USA (incorporated by reference to
Exhibit 10.6 to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1997, File No.
001-13245).
10.28 -- Gas Purchase Agreement, dated January 1, 1996, between
MOC, as Seller, and KN Marketing L.P., as Buyer, and
Amendment, dated August 1, 1995 (incorporated by
reference to Exhibit 10.25 to Mesa's Form 10-K, dated
December 31, 1995).
10.29 -- Employment Agreement, dated as of August 21, 1996,
between Mesa and I. Jon Brumley (incorporated by
reference to Exhibit 10.26 of Mesa's Form 10-K, dated
December 31, 1996).
10.30 -- Stock Purchase Agreement, dated April 26, 1996, between
Mesa and DNR (incorporated by reference to Exhibit No. 10
to Mesa's Form 8-K filed on April 29, 1996).
10.31 -- 1996 Incentive Plan of Mesa (incorporated by reference to
Exhibit 10.28 to the Company's Registration Statement on
Form S-4, dated June 27, 1997, Registration No.
333-26951).
10.32 -- Mesa Management Severance Plan, dated April 4, 1997,
including a Schedule of Participants on Schedule A for
the purpose of defining the payment of certain benefits
upon the termination of the officer's employment under
certain circumstances (incorporated by reference to
Exhibit 10.29 to the Company's Registration Statement on
Form S-4, dated June 27, 1997, Registration No.
333-26951).
10.33 -- Parker & Parsley Petroleum Company Long-Term Incentive
Plan, dated February 19, 1991 (incorporated by reference
to Exhibit 4.1 to Parker & Parsley's Registration
Statement on Form S-8, Registration No. 33-38971).
10.34 -- First Amendment to the Parker & Parsley Petroleum Company
Long-Term Incentive Plan, dated August 23, 1991
(incorporated by reference to Exhibit 10.2 to Parker &
Parsley's Registration Statement on Form S-1, dated
February 28, 1992, Registration No. 33-46082).
10.35 -- Agreement of Partnership of P&P Employees 89-B Conv.,
L.P. (formerly P&P Employees 89-B GP), dated October 31,
1989, among Parker & Parsley, Ltd. and the Investor
Partners (as defined therein, which includes individuals
who are directors and executive officers of Parker &
Parsley), together with a schedule identifying
substantially identical documents and setting forth the
material details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.50 to Parker & Parsley's Registration Statement on
Form S-4, dated December 31, 1990, Registration No.
33-38436).
</TABLE>
II-6
<PAGE> 68
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.36 -- Amendment to Agreement of Partnership of P&P Employees
89-B GP, dated May 31, 1990, among Parker & Parsley, Ltd.
and the Investor Partners (as defined therein, which
includes individuals who are directors and executives
officers of Parker & Parsley), together with a schedule
identifying substantially identical documents and setting
forth the material details in which those documents
differ form the foregoing document (incorporated by
reference to Exhibit 10.51 to Parker & Parsley's
Registration Statement on Form S-4, dated December 31,
1990, Registration No. 33-38436).
10.37 -- Schedule identifying additional documents substantially
identical to the Amendment to Agreement of Partnership of
P&P Employees 89-B GP included as Exhibit 10.5 and
setting forth the material details in which those
documents differ from that document (incorporated by
reference to Exhibit 10.52 to Parker & Parsley's
Registration Statement on Form S-1, dated February 28,
1992, Registration No. 33-46082).
10.38 -- Agreement of Partnership of P&P Employees 90 Spraberry
Private Development GP, dated October 16, 1990, among
Parker & Parsley, Ltd., James D. Moring, and the General
Partners (as defined therein, which includes individuals
who are directors and executive officers of Parker &
Parsley), and form of Amendment to Agreement of
Partnership of P&P Employees 90 Spraberry Private
Development GP, together with a schedule identifying
substantially identical documents and setting forth the
material details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.52 to Parker & Parsley's Registration Statement on
Form S-4, dated December 31, 1990, Registration No.
33-38436).
10.39 -- Amendment to Agreement of Partnership of Parker & Parsley
90-A GP, dated February 19, 1991, among Parker & Parsley
Development Company and the Investor Partners (as defined
therein, which includes individuals who are directors and
executive officers of Parker & Parsley), together with a
schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing document
(incorporated by reference to Exhibit 10.58 to Parker &
Parsley's Registration Statement on Form S-1, dated
February 28, 1992, Registration No. 33-46082).
10.40 -- Agreement of Partnership of P&P Employees 91-A, GP, dated
September 30, 1991, among Parker & Parsley Development
Company, James D. Moring, and the General Partners (as
defined therein, which includes individuals who are
directors and executive officers of Parker & Parsley),
together with a schedule identifying substantially
identical documents and setting forth the material
details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.61 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No.
33-46082).
10.41 -- Development Drilling Program Agreement of Parker &
Parsley 91-A Development Drilling Program, dated
September 30, 1991, among Parker & Parsley Development
Company, the P&P Employee Participants (as defined
therein, which includes individuals who are directors and
executive officers of Parker & Parsley), P&P Employees
91-A, GP, and Parker & Parsley 91-A, L.P., together with
a schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing document
(incorporated by reference to Exhibit 10.63 to Parker &
Parsley's Registration Statement on Form S-1, dated
February 28, 1992, Registration No. 33-46082).
</TABLE>
II-7
<PAGE> 69
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.42 -- Development Drilling Program Agreement, dated August 1,
1989, among Parker & Parsley, Ltd., Parker & Parsley
Development Partners L.P., certain key employees of
Parker & Parsley, Ltd. (which includes individuals who
are directors and executive officers of Parker &
Parsley), and related persons, P&P Employees 89-A GP, and
Parker & Parsley 89-A, GP, and Parker & Parsley 89-A,
L.P., together with a schedule identifying substantially
identical documents and setting forth the material
details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.56 to Parker & Parsley's Registration Statement on
Form S-4, dated December 31, 1990, Registration No.
33-38436).
10.43 -- Amendment to Development Drilling Program Agreement,
dated February 19, 1991, amending the Development
Drilling Program Agreement included in Exhibit 10.11,
together with a schedule identifying substantially
identical documents and setting forth the material
details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.66 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No.
33-46082).
10.44 -- Amendment to Agreement of Partnership of P&P Employees 90
Spraberry Private Development GP, dated April 22, 1991,
among the Partners (as defined therein, which includes
individuals who are directors and executive officers of
Parker & Parsley) (incorporated by reference to Exhibit
10.67 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No.
33-46082).
10.45 -- Agreement of Limited Partnership of Parker & Parsley 1992
Direct Investment Program, Ltd., dated as of July 24,
1992, among Parker & Parsley Development Company, as
managing general partner, and certain key employees of
Parker & Parsley (including individuals who are directors
and executive officers of Parker & Parsley), as
non-managing general partners and limited partners
(incorporated by reference to Exhibit 10.57 to Parker
Parsley's Annual Report on Form 10-K for the year ended
December 31, 1993, Commission File No. 1-10695).
10.46 -- Agreement of Limited Partnership of Parker & Parsley 1993
Direct Investment Program, Ltd., dated as of January 1,
1993, among Parker & Parsley Development Company, as
managing general partner, and certain key employees of
Parker & Parsley (including individuals who are directors
and executive officers of Parker & Parsley), as
non-managing general partners and limited partners
(incorporated by reference to Exhibit 10.49 to Parker &
Parsley's Annual Report on Form 10-K for the year ended
December 31, 1993, Commission File No. 1-10695).
10.47 -- Agreement of Limited Partnership of Parker & Parsley 1994
Direct Investment Program, Ltd., dated as of January 1,
1994, among Parker & Parsley Development Company, as
managing general partner, and certain key employees of
Parker & Parsley (including individuals who are directors
and executive officers of Parker & Parsley), as
non-managing general partners and limited partners
(incorporated by reference to Exhibit 10.20 to Parker &
Parsley's Annual Report on Form 10-K for the year ended
December 31, 1994, Commission File No. 1-10695).
10.48+ -- Stock Acquisition Loan Agreements entered into as of June
15, 1995, between Parker & Parsley and Scott D.
Sheffield, together with Schedule I identifying named
executive officers with substantially identical
agreements providing for Parker & Parsley's loans to such
officers.
</TABLE>
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<PAGE> 70
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.49 -- Omnibus Amendment to Nonstatutory Stock Option
Agreements, included as part of the Long-Term Incentive
Plan, dated as of November 16, 1995, between Parker &
Parsley and Named Executive Officers identified on
Schedule 1 setting forth additional details relating to
the Long-Term Incentive Plan (incorporated by reference
to Parker & Parsley's Annual Report on Form 10-K for the
year ended December 31, 1995, Commission File No.
1-10695).
10.50 -- Severance Agreement, dated as of August 8, 1997, between
the Company and Scott D. Sheffield, together with a
schedule identifying substantially identical agreements
between the Company and each of the other named executive
officers identified on Schedule I for the purpose of
defining the payment of certain benefits upon the
termination of the officer's employment under certain
circumstances (incorporated by reference to Exhibit 10.7
to the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997, File No. 001-13245).
10.51 -- Indemnification Agreement, dated as of August 8, 1997,
between the Company and Scott D. Sheffield, together with
a schedule identifying substantially identical agreements
between the Company and each of the Company's other
directors and named executive officers identified on
Schedule I (incorporated by reference to Exhibit 10.8 to
the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997, File No. 001-13245).
10.52 -- Pioneer Natural Resources Company Long-Term Incentive
Plan (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8,
Registration No. 333-35087).
10.53 -- Pioneer Natural Resources Company Employee Stock Purchase
Plan (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8,
Registration No. 333-35165).
10.54 -- Pioneer Natural Resources Company Deferred Compensation
Retirement Plan (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form S-8,
Registration No. 333-39153).
10.55 -- Pioneer Natural Resources USA, Inc. 401(k) Plan
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8,
Registration No. 333-39249).
10.56 -- Amended and Restated Credit Facility Agreement (Primary
Facility), dated as of December 18, 1997, between the
Company, as Borrower, and NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent,
Morgan Guaranty Trust Company of New York, as
Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders
named therein (incorporated by reference to Exhibit 10.1
to the Company's Form 8-K, File No. 001-13245, filed with
the SEC on January 2, 1998).
10.57 -- Amended and Restated Credit Facility Agreement (364 Day
Facility), dated as of December 18, 1997, between the
Company, as Borrower, and NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent,
Morgan Guaranty Trust Company of New York, as
Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders
named therein (incorporated by reference to Exhibit 10.2
to the Company's Form 8-K, File No. 001-13245, filed with
the SEC on January 2, 1998).
10.58 -- Credit Agreement, dated as of December 18, 1997, among
Chauvco, Canadian Imperial Bank of Commerce, as Agent,
and the other Lenders named therein (incorporated by
reference to Exhibit 10.3 to the Company's Current Report
on Form 8-K, File No. 001-13245, filed with the SEC on
January 2, 1998).
</TABLE>
II-9
<PAGE> 71
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.59 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC.), as Issuer, Mesa, the
subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the 10 5/8% Senior Subordinated Notes Due 2006
(incorporated by reference to Exhibit 10.5 to Pioneer's
Registration Statement on Form S-3, Registration No.
333-39381, filed with the SEC on November 3, 1997).
10.60 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the 10 5/8% Senior Subordinated Notes Due 2006
(incorporated by reference to Exhibit 10.6 to the
Company's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.61 -- Third Supplemental Indenture, dated as of December 18,
1997, among Pioneer USA, the Subsidiary Guarantors named
therein, the Company, and Harris Trust and Savings Bank,
as Trustee, with respect to the Indenture, dated as of
July 2, 1996, as amended, relating to Pioneer USA's
10 5/8% Senior Subordinated Notes due 2006 (incorporated
by reference to Exhibit 10.6 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.62 -- Fourth Supplemental Indenture, dated as of December 30,
1997, among Pioneer USA, a Delaware corporation, the
Company, a Delaware corporation, Pioneer NewSubl, Inc., a
Texas corporation, and Harris Trust and Savings Bank, an
Illinois corporation, as Trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating
to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006 (incorporated by reference to Exhibit 10.7 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.63 -- Fifth Supplemental Indenture, dated as of December 30,
1997, among Pioneer NewSubl, Inc. (as successor to
Pioneer USA), a Texas corporation, Pioneer, a Delaware
corporation, Pioneer DebtCo, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois
corporation, as Trustee, with respect to the Indenture,
dated as of July 2, 1996, as amended, relating to Pioneer
USA's 10 5/8% Senior Subordinated Notes due 2006
(incorporated by reference to Exhibit 10.8 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.64 -- Sixth Supplemental Indenture, dated as of December 30,
1997, among Pioneer DebtCo, Inc. (as successor to Pioneer
NewSubl, Inc.), a Texas corporation, the Company, a
Delaware corporation, and Harris Trust and Savings Bank,
an Illinois corporation, as Trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating
to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006 (incorporated by reference to Exhibit 10.9 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.65 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC), as Issuer, Mesa, the
subsidiary guarantors named therein, Pioneer, and Harris
Trust and Savings Bank, as Trustee, with respect to the
11 5/8% Senior Subordinated Discount Notes Due 2006
(incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on
November 3, 1997).
</TABLE>
II-10
<PAGE> 72
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.66 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the 11 5/8% Senior Subordinated Discount Notes Due
2006 (incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.67 -- Third Supplemental Indenture, dated as of December 18,
1997, among Pioneer USA, the Subsidiary Guarantors named
therein, the Company, and Harris Trust and Savings Bank,
as Trustee, with respect to the Indenture, dated as of
July 2, 1996, as amended, relating to Pioneer USA's
11 5/8% Senior Subordinated Notes due 2006 (incorporated
by reference to Exhibit 10.12 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.68 -- Fourth Supplemental Indenture, dated as of December 30,
1997, among Pioneer USA (formerly known as MOC), a
Delaware corporation, the Company, a Delaware
corporation, Pioneer NewSubl, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois
corporation, as Trustee, with respect to the Indenture
dated as of July 2, 1996, as amended, relating to Pioneer
USA's 11 5/8% Senior Subordinated Discount Notes Due
(incorporated by reference to Exhibit 10.13 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.69 -- Fifth Supplemental Indenture, dated as of December 30,
1997, among Pioneer NewSubl, Inc. (as successor to
Pioneer USA), a Texas corporation, the Company, a
Delaware corporation, Pioneer DebtCo, Inc., a Texas
corporation, and Harris Trust and Savings Bank, an
Illinois corporation, as Trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount
Notes Due 2006 (incorporated by reference to Exhibit
10.14 to the Company's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on January 2, 1998).
10.70 -- Sixth Supplemental Indenture, dated as of December 30,
1997, among Pioneer DebtCo, Inc.(as successor to Pioneer
NewSub1, Inc.), a Texas corporation, the Company, a
Delaware corporation, and Harris Trust and Savings Bank,
an Illinois corporation, as Trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount
Notes Due 2006 (incorporated by reference to Exhibit
10.15 to the Company's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on January 2, 1998).
10.71 -- First Supplemental Indenture, dated as of August 7, 1997,
among Parker & Parsley, The Chase Manhattan Bank, as
Trustee, and Pioneer USA, with respect to the Indenture,
dated April 12, 1995, between Pioneer USA (successor to
Parker & Parsley), and The Chase Manhattan Bank (National
Association), as Trustee (incorporated by reference to
Exhibit 10.9 to the Company's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC
on November 3, 1997).
10.72 -- Second Supplemental Indenture, dated as of December 30,
1997, among Pioneer USA, a Delaware corporation, Pioneer
NewSubl, Inc., a Texas corporation, and The Chase
Manhattan Bank, a New York banking association, as
Trustee, with respect to the Indenture, dated as of April
12, 1995, as amended, relating to Pioneer USA's 8 7/8%
Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007
(incorporated by reference to Exhibit 10.17 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
</TABLE>
II-11
<PAGE> 73
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.73 -- Third Supplemental Indenture, dated as of December 30,
1997, among Pioneer NewSubl, Inc. (as successor to
Pioneer USA), a Texas corporation, Pioneer DebtCo, Inc.,
a Texas corporation, and The Chase Manhattan Bank, a New
York banking association, as Trustee, with respect to the
Indenture, dated as of April 12, 1995, as amended,
relating to Pioneer USA's 8 7/8% Senior Notes Due 2005
and 8 1/4% Senior Notes Due 2007 (incorporated by
reference to Exhibit 10.18 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.74 -- Fourth Supplemental Indenture, dated as of December 30,
1997, among Pioneer DebtCo, Inc. (as successor to Pioneer
NewSubl, Inc., as successor to Pioneer USA), a Texas
corporation, the Company, a Delaware corporation, Pioneer
USA, a Delaware corporation, and The Chase Manhattan
Bank, a New York banking association, as trustee, with
respect to the Indenture, dated as of April 12, 1995, as
amended, relating to Pioneer USA's 8 7/8% Senior Notes
Due 2005 and 8 1/4% Senior Notes Due 2007 (incorporated
by reference to Exhibit 10.19 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.75 -- Guarantee, dated as of December 30, 1997, by Pioneer USA
relating to the $150,000,000 in aggregate principal
amount of 8 7/8% Senior Notes Due 2005 and $150,000,000
in aggregate principal amount of 8 1/4% Senior Notes Due
2007 issued under the Indenture, dated as of April 12,
1995, between Pioneer USA and The Chase Manhattan Bank, a
New York banking association, as Trustee (incorporated by
reference to Exhibit 10.20 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.76 -- Note, dated December 22, 1997, between the Company, as
Borrower, and NationsBank of Texas, N.A., as Lender
(incorporated by reference to Exhibit 10.21 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.77 -- Purchase and Sale Agreement, dated as of October 22,
1997, between Cometra Energy, L.P., and Pioneer USA
(incorporated by reference to Exhibit 10.22 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
12.1** -- Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.
23.1** -- Consent of KPMG Peat Marwick LLP.
23.2** -- Consent of Arthur Andersen LLP.
23.3** -- Consent of Price Waterhouse, chartered accountants.
23.4** -- Consent of Coopers & Lybrand L.L.P.
23.5** -- Consent of Netherland, Sewell & Associates, Inc.
23.6** -- Consent of Williamson Petroleum Consultants, Inc.
23.7** -- Consent of Miller and Lents, Ltd.
23.8+ -- Consent of Gilbert Lausten Jung Associates, Ltd.
</TABLE>
II-12
<PAGE> 74
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.9** -- Consent of Martin Petroleum and Associates.
23.10* -- Consent of Vinson & Elkins L.L.P. (included in the
opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1+ -- Powers of Attorney of directors and officers of the
Company.
24.2** -- Powers of Attorney of Pioneer USA (included on page II-16
to this Registration Statement).
25.1* -- Form T-1 Statement for eligibility under the Trust
Indenture Act of 1939 of trustee.
</TABLE>
- ---------------
+ Previously filed.
* To be filed.
** Filed herewith.
ITEM 17 -- UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement.
(1) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(2) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(3) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to the information in this Registration Statement;
Provided, however, that clauses (1) and (2) above do not apply if
the information required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference into this Registration Statement;
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-13
<PAGE> 75
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the provisions described in Item 15 above or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by the director, officer, or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of the issue.
II-14
<PAGE> 76
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Irving, Texas, on December 31, 1997.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ SCOTT D. SHEFFIELD
-------------------------------------
Scott D. Sheffield,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board and Director December 31, 1997
- -----------------------------------------------------
I. Jon Brumley
* Director, President and Chief December 31, 1997
- ----------------------------------------------------- Executive Officer (principal
Scott D. Sheffield executive officer)
* Executive Vice President and Chief December 31, 1997
- ----------------------------------------------------- Financial Officer (principal
M. Garrett Smith financial and accounting
officer)
* Director December 31, 1997
- -----------------------------------------------------
R. Hartwell Gardner
* Director December 31, 1997
- -----------------------------------------------------
Kenneth A. Hersh
* Director December 31, 1997
- -----------------------------------------------------
James L. Houghton
* Director December 31, 1997
- -----------------------------------------------------
Jerry P. Jones
* Director December 31, 1997
- -----------------------------------------------------
Charles E. Ramsey, Jr.
* Director December 31, 1997
- -----------------------------------------------------
Philip B. Smith
* Director December 31, 1997
- -----------------------------------------------------
Robert L. Stillwell
* Director December 31, 1997
- -----------------------------------------------------
Michael D. Wortley
*By: /s/ M. GARRETT SMITH
-------------------------------------------------
M. Garrett Smith
Attorney-in-Fact
</TABLE>
II-15
<PAGE> 77
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Irving, Texas, on December 31, 1997.
PIONEER NATURAL RESOURCES USA, INC.
By: /s/ SCOTT D. SHEFFIELD
-------------------------------------
Scott D. Sheffield,
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes and appoints Scott D. Sheffield, Mark L. Withrow and M.
Garrett Smith, or any of them, as his attorney-in-fact to sign on his behalf
individually and in the capacity stated below all amendments and post-effective
amendments to this Registration Statement (including any additional registration
statement filed pursuant to Rule 462 of the Securities Act of 1933 with respect
to this Registration Statement) as that attorney-in-fact may deem necessary or
appropriate.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ SCOTT D. SHEFFIELD Director and President (principal December 31, 1997
- ----------------------------------------------------- executive officer)
Scott D. Sheffield
/s/ M. GARRETT SMITH Director and Senior Vice December 31, 1997
- ----------------------------------------------------- President-Finance (principal
M. Garrett Smith financial and accounting
officer)
Director December 31, 1997
- -----------------------------------------------------
Timothy L. Dove
Director December 31, 1997
- -----------------------------------------------------
Dennis E. Fagerstone
/s/ MARK L. WITHROW Director December 31, 1997
- -----------------------------------------------------
Mark L. Withrow
</TABLE>
II-16
<PAGE> 78
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1* -- Underwriting Agreement.
2.1 -- Amended and Restated Agreement and Plan of Merger, dated
as of April 6, 1997, by and among MESA Inc. ("Mesa"),
Mesa Operating Co. ("MOC"), MXP Reincorporation Corp. and
Parker & Parsley Petroleum Company ("Parker & Parsley")
(incorporated by reference to Exhibit 2.1 to the
Company's Registration Statement on Form S-4, dated June
27, 1997, Registration No. 333-26951).
2.2+ -- Combination Agreement, dated as of September 3, 1997,
between the Company and Chauvco Resources Ltd.
("Chauvco").
2.3 -- Plan of Arrangement under Section 186 of the Business
Corporations Act (Alberta) (incorporated by reference to
Exhibit 2.2 to the Company's Current Report on Form 8-K,
File No. 001-13245, filed with the SEC on January 2,
1998).
2.4 -- Support Agreement between the Company and Pioneer Natural
Resources (Canada) Ltd. (incorporated by reference to
Exhibit 2.3 to the Company's Current Report on Form 8-K,
File No. 001-13245, filed with the SEC on January 2,
1998).
2.5 -- Voting and Exchange Trust Agreement among the Company,
Pioneer Natural Resources (Canada) Ltd. and Montreal
Trust Company of Canada, as Trustee (incorporated by
reference to Exhibit 2.4 to the Company's Current Report
on Form 8-K, File No. 001-13245, filed with the SEC on
January 2, 1998).
2.6+ -- Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among the Company and Guy J.
Turcotte.
2.7 -- Shareholders Agreement, dated as of September 3, 1997, by
and among the Company, Chauvco, DNR-MESA Holdings, L.P.
("DNR"), Scott D. Sheffield and I. Jon Brumley
(incorporated by reference to Exhibit 2.3 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on October 2, 1997).
2.8 -- Shareholders Agreement, dated as of September 3, 1997, by
and among the Company, Trimac Corporation and Gendis Inc.
(incorporated by reference to Exhibit 2.4 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on October 2, 1997).
3.1 -- Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-4,
Registration No. 333-26951).
3.2 -- Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on
Form S-4, Registration No. 333-26951).
3.3+ -- Certificate of Designations of Special Preferred Voting
Stock.
3.4 -- Terms and Conditions of Exchangeable Shares (incorporated
by reference to Annex F to the Definitive Joint
Management Information Circular and Proxy Statement of
the Company and Chauvco Resources Ltd., File No.
001-13245, filed with the SEC on November 17, 1997).
4.1 -- Form of Certificate of Common Stock, par value $.01 per
share, of the Company (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4, Registration No. 333-26951).
4.2** -- Form of Indenture between the Company and one or more
commercial banks to be named, as trustee.
4.3* -- Form of Senior Debt Security.
</TABLE>
<PAGE> 79
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.4* -- Form of Subordinated Debt Security.
4.5* -- Form of Deposit Agreement.
4.6* -- Form of Depositary Receipt.
4.7* -- Form of Warrant Agreement.
4.8* -- Form of Warrant Certificate.
4.9* -- Form of Guarantee.
4.10 -- Form of Certificate of Special Preferred Voting Stock
(incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
4.11 -- Form of Certificate of Exchangeable Shares (incorporated
by reference to Exhibit 4.2 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
5.1** -- Form of opinion of Vinson & Elkins L.L.P. as to the
legality of the securities to be registered.
9.1 -- Shareholder Agreement, dated as of April 6, 1997, between
Mesa, Boone Pickens and Parker & Parsley (incorporated by
reference to Exhibit 2.4 of Mesa's Form 8-K filed April
8, 1997).
9.2 -- Shareholders Agreement, dated as of April 6, 1997,
between DNR and Mesa (incorporated by reference to
Exhibit 2.2 of Mesa's Form 8-K filed April 8, 1997).
10.1 -- Indenture, dated July 2, 1996, among Pioneer Natural
Resources USA, Inc. ("Pioneer USA") (formerly MOC), as
Issuer, the Company (Mesa's successor), as Guarantor, and
Harris Trust and Savings Bank, as Trustee, relating to
the 11 5/8% Senior Subordinated Discount Notes Due 2006
(incorporated by reference to Exhibit 4.17 of Mesa's Form
10-Q dated August 13, 1996).
10.2 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC), as Issuer, Mesa, the
subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.1
(incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
10.3 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.1
(incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
10.4 -- Indenture, dated July 2, 1996, among Pioneer USA
(formerly MOC), as Issuer, the Company (Mesa's
successor), as Guarantor, and Harris Trust and Savings
Bank, as Trustee, relating to 10 5/8% Senior Subordinated
Notes Due 2006 (incorporated by reference to Exhibit 4.18
of Mesa's Form 10-Q, dated August 13, 1996).
10.5 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC), as Issuer, Mesa, the
subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.4
(incorporated by reference to Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
</TABLE>
<PAGE> 80
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.6 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the indenture identified above as Exhibit 10.4
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997, File No. 001-13245).
10.7 -- Indentures relating to $50,000,000 principal amount of
8 1/2% Convertible Subordinated Debentures due 2005 of
Dorchester Master Limited Partnership ($3,762,000
principal amount of which were outstanding and held by
non affiliates at December 31, 1996) and $100,000,000
principal amount of 9 1/2% Senior Notes due 2000 of
Bridge Oil (U.S.A.) Inc. ($2,063,000 principal amount of
which were outstanding at December 31, 1996) have been
omitted pursuant to Item 601(b)(4)(iii)(A) of Regulation
S-K. The Company hereby agrees to furnish a copy of the
indentures to the Securities and Exchange Commission upon
request (incorporated by reference to Parker & Parsley's
Form 10-K, dated December 31, 1996).
10.8 -- Indenture, dated April 12, 1995, between Pioneer USA
(successor to Parker & Parsley), and The Chase Manhattan
Bank (National Association), as Trustee (incorporated by
reference to Exhibit 4.1 to Parker & Parsley's Current
Report on Form 8-K, dated April 12, 1995, File No.
1-10695).
10.9 -- First Supplemental Indenture, dated as of August 7, 1997,
among Parker & Parsley, The Chase Manhattan Bank, as
Trustee, and Pioneer USA, with respect to the indenture
identified above as Exhibit 10.8 (incorporated by
reference to Exhibit 10.5 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30,
1997, File No. 001-13245).
10.10 -- Form of 8 7/8% Senior Notes Due 2005, dated as of April
12, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate dated
April 12, 1995, establishing the terms of the 8 7/8%
Senior Notes Due 2005 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by
reference to Exhibit 4.2 to Parker & Parsley's Quarterly
Report on Form 10-Q for the period ended June 30, 1995,
File No. 1-10695).
10.11 -- Form of 8 1/4% Senior Notes due 2007, dated as of August
22, 1995, in the aggregate principal amount of
$150,000,000, together with Officers' Certificate, dated
August 22, 1995, establishing the terms of the 8 1/4%
Senior Notes due 2007 pursuant to the indenture
identified above as Exhibit 10.8 (incorporated by
reference to Exhibit 1.2 to Parker & Parsley's Current
Report on Form 8-K, dated August 17, 1995, File No.
1-10695).
10.12 -- Agreement of Sale between Pioneer Corporation and Cabot
Corporation, dated August 29, 1984 (incorporated by
reference to Exhibit 10.5 to Pioneer Corporation's Form
10-K, dated December 31, 1985).
10.13 -- Settlement Agreement, dated March 15, 1989, by and among
Mesa Operating Limited Partnership and Mesa Limited
Partnership, et al., Energas Company and the City of
Amarillo (incorporated by reference to Exhibit 10(k) to
Mesa Limited Partnership's Form 10-K, dated December 31,
1990).
10.14 -- Gas Purchase Agreement, dated December 1, 1989, between
Williams Natural Gas Company and Mesa Operating Limited
Partnership acting on behalf of itself and as agent for
Mesa Midcontinent Limited Partnership (incorporated by
reference to Exhibit 10.1 to Registration Statement of
Mesa Limited Partnership on Form S-3, Registration No.
33-32978).
</TABLE>
<PAGE> 81
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.15 -- "B" Contract Production Allocation Agreement, dated July
29, 1991, and effective as of January 1, 1991, between
Colorado Interstate Gas Company and Mesa Operating
Limited Partnership (incorporated by reference to Exhibit
10(r) to Mesa's Form 10-K, dated December 31, 1991).
10.16 -- Amendment to "B" Contract Production Allocation Agreement
effective as of January 1, 1993, between Colorado
Interstate Gas Company and Mesa Operating Limited
Partnership (incorporated by reference to Exhibit 10.24
to Mesa's Registration Statement on Form S-1,
Registration No. 033-51909).
10.17 -- Amended Peak Day Gas Purchase Agreement, dated effective
June 19, 1991, between Colorado Interstate Gas Company
and Mesa Operating Limited Partnership (incorporated by
reference to Exhibit 10(t) to Mesa's Form 10-K, dated
December 31, 1991).
10.18 -- Omnibus Amendment to Collateral Instruments to
Supplemental Stipulation and Agreement, dated June 19,
1991, between Colorado Interstate Gas Company and Mesa
Operating Limited Partnership (incorporated by reference
to Exhibit 10(u) to Mesa's Form 10-K, dated December 31,
1991).
10.19 -- Amarillo Supply Agreement between Mesa Operating Limited
Partnership, Seller, and Energas Company, a division of
Atmos Energy Corporation, Buyer, dated effective January
2, 1993 (incorporated by reference to Exhibit 10.14 to
Mesa's Form 10-K dated, December 31, 1995).
10.20 -- Gas Supply Agreement, dated May 11, 1994, between MOC, as
successor to Mesa Operating Limited Partnership, acting
on behalf of itself and as agent for Hugoton Capital
Limited Partnership, and Williams Gas Marketing Company,
and Gas Supply Guarantee, dated May 11, 1994
(incorporated by reference to Exhibit 10.16 to Mesa's
Form 10-K, dated December 31, 1995).
10.21 -- Gas Transportation Agreement, dated June 14, 1994,
between Western Resources, Inc. and MOC, acting on behalf
of itself and as agent for Hugoton Capital Limited
Partnership (incorporated by reference to Exhibit 10.24
to Mesa's Form 10-K, dated December 31, 1994).
10.22 -- 1991 Stock Option Plan of Mesa (incorporated by reference
to Exhibit 10(v) to Mesa's Form 10-K, dated December 31,
1991).
10.23 -- Interruptible Gas Transportation and Sales Agreement,
dated January 1, 1991, between Mesa Operating Limited
Partnership and Energas Company and Amendment, dated
January 1, 1995 (incorporated by reference to Exhibit
10.22 to Mesa's Form 10-K, dated December 31, 1995).
10.24 -- "B" Contract Operating Agreement, dated January 1, 1988,
between Mesa Operating Limited Partnership and Colorado
Interstate Gas Company (incorporated by reference to
Exhibit 10.23 to Mesa's Form 10-K, dated December 31,
1995).
10.25 -- Gathering Agreement, dated May 29, 1987, between Mesa
Operating Limited Partnership and Colorado Interstate Gas
Company (incorporated by reference to Exhibit 10.15 to
the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997, File No. 001-13245).
10.26 -- Amendment to Gathering Agreement, dated July 15, 1990,
between Colorado Interstate Gas Company and Mesa
Operating Limited Partnership (incorporated by reference
to Exhibit 10.24 to Mesa's Form 10-K, dated December 31,
1995).
</TABLE>
<PAGE> 82
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.27 -- Amendment to 1990 Gathering Agreement Amendment, dated
September 1, 1997, between Colorado Interstate Gas
Company and Pioneer USA (incorporated by reference to
Exhibit 10.6 to the Company's Quarterly Report on Form
10-Q for the period ended September 30, 1997, File No.
001-13245).
10.28 -- Gas Purchase Agreement, dated January 1, 1996, between
MOC, as Seller, and KN Marketing L.P., as Buyer, and
Amendment, dated August 1, 1995 (incorporated by
reference to Exhibit 10.25 to Mesa's Form 10-K, dated
December 31, 1995).
10.29 -- Employment Agreement, dated as of August 21, 1996,
between Mesa and I. Jon Brumley (incorporated by
reference to Exhibit 10.26 of Mesa's Form 10-K, dated
December 31, 1996).
10.30 -- Stock Purchase Agreement, dated April 26, 1996, between
Mesa and DNR (incorporated by reference to Exhibit No. 10
to Mesa's Form 8-K filed on April 29, 1996).
10.31 -- 1996 Incentive Plan of Mesa (incorporated by reference to
Exhibit 10.28 to the Company's Registration Statement on
Form S-4, dated June 27, 1997, Registration No.
333-26951).
10.32 -- Mesa Management Severance Plan, dated April 4, 1997,
including a Schedule of Participants on Schedule A for
the purpose of defining the payment of certain benefits
upon the termination of the officer's employment under
certain circumstances (incorporated by reference to
Exhibit 10.29 to the Company's Registration Statement on
Form S-4, dated June 27, 1997, Registration No.
333-26951).
10.33 -- Parker & Parsley Petroleum Company Long-Term Incentive
Plan, dated February 19, 1991 (incorporated by reference
to Exhibit 4.1 to Parker & Parsley's Registration
Statement on Form S-8, Registration No. 33-38971).
10.34 -- First Amendment to the Parker & Parsley Petroleum Company
Long-Term Incentive Plan, dated August 23, 1991
(incorporated by reference to Exhibit 10.2 to Parker &
Parsley's Registration Statement on Form S-1, dated
February 28, 1992, Registration No. 33-46082).
10.35 -- Agreement of Partnership of P&P Employees 89-B Conv.,
L.P. (formerly P&P Employees 89-B GP), dated October 31,
1989, among Parker & Parsley, Ltd. and the Investor
Partners (as defined therein, which includes individuals
who are directors and executive officers of Parker &
Parsley), together with a schedule identifying
substantially identical documents and setting forth the
material details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.50 to Parker & Parsley's Registration Statement on
Form S-4, dated December 31, 1990, Registration No.
33-38436).
10.36 -- Amendment to Agreement of Partnership of P&P Employees
89-B GP, dated May 31, 1990, among Parker & Parsley, Ltd.
and the Investor Partners (as defined therein, which
includes individuals who are directors and executives
officers of Parker & Parsley), together with a schedule
identifying substantially identical documents and setting
forth the material details in which those documents
differ form the foregoing document (incorporated by
reference to Exhibit 10.51 to Parker & Parsley's
Registration Statement on Form S-4, dated December 31,
1990, Registration No. 33-38436).
</TABLE>
<PAGE> 83
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.37 -- Schedule identifying additional documents substantially
identical to the Amendment to Agreement of Partnership of
P&P Employees 89-B GP included as Exhibit 10.5 and
setting forth the material details in which those
documents differ from that document (incorporated by
reference to Exhibit 10.52 to Parker & Parsley's
Registration Statement on Form S-1, dated February 28,
1992, Registration No. 33-46082).
10.38 -- Agreement of Partnership of P&P Employees 90 Spraberry
Private Development GP, dated October 16, 1990, among
Parker & Parsley, Ltd., James D. Moring, and the General
Partners (as defined therein, which includes individuals
who are directors and executive officers of Parker &
Parsley), and form of Amendment to Agreement of
Partnership of P&P Employees 90 Spraberry Private
Development GP, together with a schedule identifying
substantially identical documents and setting forth the
material details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.52 to Parker & Parsley's Registration Statement on
Form S-4, dated December 31, 1990, Registration No.
33-38436).
10.39 -- Amendment to Agreement of Partnership of Parker & Parsley
90-A GP, dated February 19, 1991, among Parker & Parsley
Development Company and the Investor Partners (as defined
therein, which includes individuals who are directors and
executive officers of Parker & Parsley), together with a
schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing document
(incorporated by reference to Exhibit 10.58 to Parker &
Parsley's Registration Statement on Form S-1, dated
February 28, 1992, Registration No. 33-46082).
10.40 -- Agreement of Partnership of P&P Employees 91-A, GP, dated
September 30, 1991, among Parker & Parsley Development
Company, James D. Moring, and the General Partners (as
defined therein, which includes individuals who are
directors and executive officers of Parker & Parsley),
together with a schedule identifying substantially
identical documents and setting forth the material
details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.61 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No.
33-46082).
10.41 -- Development Drilling Program Agreement of Parker &
Parsley 91-A Development Drilling Program, dated
September 30, 1991, among Parker & Parsley Development
Company, the P&P Employee Participants (as defined
therein, which includes individuals who are directors and
executive officers of Parker & Parsley), P&P Employees
91-A, GP, and Parker & Parsley 91-A, L.P., together with
a schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing document
(incorporated by reference to Exhibit 10.63 to Parker &
Parsley's Registration Statement on Form S-1, dated
February 28, 1992, Registration No. 33-46082).
10.42 -- Development Drilling Program Agreement, dated August 1,
1989, among Parker & Parsley, Ltd., Parker & Parsley
Development Partners L.P., certain key employees of
Parker & Parsley, Ltd. (which includes individuals who
are directors and executive officers of Parker &
Parsley), and related persons, P&P Employees 89-A GP, and
Parker & Parsley 89-A, GP, and Parker & Parsley 89-A,
L.P., together with a schedule identifying substantially
identical documents and setting forth the material
details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.56 to Parker & Parsley's Registration Statement on
Form S-4, dated December 31, 1990, Registration No.
33-38436).
</TABLE>
<PAGE> 84
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.43 -- Amendment to Development Drilling Program Agreement,
dated February 19, 1991, amending the Development
Drilling Program Agreement included in Exhibit 10.11,
together with a schedule identifying substantially
identical documents and setting forth the material
details in which those documents differ from the
foregoing document (incorporated by reference to Exhibit
10.66 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No.
33-46082).
10.44 -- Amendment to Agreement of Partnership of P&P Employees 90
Spraberry Private Development GP, dated April 22, 1991,
among the Partners (as defined therein, which includes
individuals who are directors and executive officers of
Parker & Parsley) (incorporated by reference to Exhibit
10.67 to Parker & Parsley's Registration Statement on
Form S-1, dated February 28, 1992, Registration No.
33-46082).
10.45 -- Agreement of Limited Partnership of Parker & Parsley 1992
Direct Investment Program, Ltd., dated as of July 24,
1992, among Parker & Parsley Development Company, as
managing general partner, and certain key employees of
Parker & Parsley (including individuals who are directors
and executive officers of Parker & Parsley), as
non-managing general partners and limited partners
(incorporated by reference to Exhibit 10.57 to Parker
Parsley's Annual Report on Form 10-K for the year ended
December 31, 1993, Commission File No. 1-10695).
10.46 -- Agreement of Limited Partnership of Parker & Parsley 1993
Direct Investment Program, Ltd., dated as of January 1,
1993, among Parker & Parsley Development Company, as
managing general partner, and certain key employees of
Parker & Parsley (including individuals who are directors
and executive officers of Parker & Parsley), as
non-managing general partners and limited partners
(incorporated by reference to Exhibit 10.49 to Parker &
Parsley's Annual Report on Form 10-K for the year ended
December 31, 1993, Commission File No. 1-10695).
10.47 -- Agreement of Limited Partnership of Parker & Parsley 1994
Direct Investment Program, Ltd., dated as of January 1,
1994, among Parker & Parsley Development Company, as
managing general partner, and certain key employees of
Parker & Parsley (including individuals who are directors
and executive officers of Parker & Parsley), as
non-managing general partners and limited partners
(incorporated by reference to Exhibit 10.20 to Parker &
Parsley's Annual Report on Form 10-K for the year ended
December 31, 1994, Commission File No. 1-10695).
10.48+ -- Stock Acquisition Loan Agreements entered into as of June
15, 1995, between Parker & Parsley and Scott D.
Sheffield, together with Schedule I identifying named
executive officers with substantially identical
agreements providing for Parker & Parsley's loans to such
officers.
10.49 -- Omnibus Amendment to Nonstatutory Stock Option
Agreements, included as part of the Long-Term Incentive
Plan, dated as of November 16, 1995, between Parker &
Parsley and Named Executive Officers identified on
Schedule 1 setting forth additional details relating to
the Long-Term Incentive Plan (incorporated by reference
to Parker & Parsley's Annual Report on Form 10-K for the
year ended December 31, 1995, Commission File No.
1-10695).
</TABLE>
<PAGE> 85
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.50 -- Severance Agreement, dated as of August 8, 1997, between
the Company and Scott D. Sheffield, together with a
schedule identifying substantially identical agreements
between the Company and each of the other named executive
officers identified on Schedule I for the purpose of
defining the payment of certain benefits upon the
termination of the officer's employment under certain
circumstances (incorporated by reference to Exhibit 10.7
to the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997, File No. 001-13245).
10.51 -- Indemnification Agreement, dated as of August 8, 1997,
between the Company and Scott D. Sheffield, together with
a schedule identifying substantially identical agreements
between the Company and each of the Company's other
directors and named executive officers identified on
Schedule I (incorporated by reference to Exhibit 10.8 to
the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997, File No. 001-13245).
10.52 -- Pioneer Natural Resources Company Long-Term Incentive
Plan (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8,
Registration No. 333-35087).
10.53 -- Pioneer Natural Resources Company Employee Stock Purchase
Plan (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8,
Registration No. 333-35165).
10.54 -- Pioneer Natural Resources Company Deferred Compensation
Retirement Plan (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form S-8,
Registration No. 333-39153).
10.55 -- Pioneer Natural Resources USA, Inc. 401(k) Plan
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8,
Registration No. 333-39249).
10.56 -- Amended and Restated Credit Facility Agreement (Primary
Facility), dated as of December 18, 1997, between the
Company, as Borrower, and NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent,
Morgan Guaranty Trust Company of New York, as
Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders
named therein (incorporated by reference to Exhibit 10.1
to the Company's Form 8-K, File No. 001-13245, filed with
the SEC on January 2, 1998).
10.57 -- Amended and Restated Credit Facility Agreement (364 Day
Facility), dated as of December 18, 1997, between the
Company, as Borrower, and NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent,
Morgan Guaranty Trust Company of New York, as
Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders
named therein (incorporated by reference to Exhibit 10.2
to the Company's Form 8-K, File No. 001-13245, filed with
the SEC on January 2, 1998).
10.58 -- Credit Agreement, dated as of December 18, 1997, among
Chauvco, Canadian Imperial Bank of Commerce, as Agent,
and the other Lenders named therein (incorporated by
reference to Exhibit 10.3 to the Company's Current Report
on Form 8-K, File No. 001-13245, filed with the SEC on
January 2, 1998).
</TABLE>
<PAGE> 86
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.59 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC.), as Issuer, Mesa, the
subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the 10 5/8% Senior Subordinated Notes Due 2006
(incorporated by reference to Exhibit 10.5 to Pioneer's
Registration Statement on Form S-3, Registration No.
333-39381, filed with the SEC on November 3, 1997).
10.60 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the 10 5/8% Senior Subordinated Notes Due 2006
(incorporated by reference to Exhibit 10.6 to the
Company's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.61 -- Third Supplemental Indenture, dated as of December 18,
1997, among Pioneer USA, the Subsidiary Guarantors named
therein, the Company, and Harris Trust and Savings Bank,
as Trustee, with respect to the Indenture, dated as of
July 2, 1996, as amended, relating to Pioneer USA's
10 5/8% Senior Subordinated Notes due 2006 (incorporated
by reference to Exhibit 10.6 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.62 -- Fourth Supplemental Indenture, dated as of December 30,
1997, among Pioneer USA, a Delaware corporation, the
Company, a Delaware corporation, Pioneer NewSubl, Inc., a
Texas corporation, and Harris Trust and Savings Bank, an
Illinois corporation, as Trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating
to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006 (incorporated by reference to Exhibit 10.7 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.63 -- Fifth Supplemental Indenture, dated as of December 30,
1997, among Pioneer NewSubl, Inc. (as successor to
Pioneer USA), a Texas corporation, Pioneer, a Delaware
corporation, Pioneer DebtCo, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois
corporation, as Trustee, with respect to the Indenture,
dated as of July 2, 1996, as amended, relating to Pioneer
USA's 10 5/8% Senior Subordinated Notes due 2006
(incorporated by reference to Exhibit 10.8 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.64 -- Sixth Supplemental Indenture, dated as of December 30,
1997, among Pioneer DebtCo, Inc. (as successor to Pioneer
NewSubl, Inc.), a Texas corporation, the Company, a
Delaware corporation, and Harris Trust and Savings Bank,
an Illinois corporation, as Trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating
to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006 (incorporated by reference to Exhibit 10.9 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.65 -- First Supplemental Indenture, dated as of April 15, 1997,
among Pioneer USA (formerly MOC), as Issuer, Mesa, the
subsidiary guarantors named therein, Pioneer, and Harris
Trust and Savings Bank, as Trustee, with respect to the
11 5/8% Senior Subordinated Discount Notes Due 2006
(incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on
November 3, 1997).
</TABLE>
<PAGE> 87
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.66 -- Second Supplemental Indenture, dated as of August 7,
1997, among Pioneer USA (formerly MOC), as Issuer, Mesa,
the subsidiary guarantors named therein, the Company, and
Harris Trust and Savings Bank, as Trustee, with respect
to the 11 5/8% Senior Subordinated Discount Notes Due
2006 (incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.67 -- Third Supplemental Indenture, dated as of December 18,
1997, among Pioneer USA, the Subsidiary Guarantors named
therein, the Company, and Harris Trust and Savings Bank,
as Trustee, with respect to the Indenture, dated as of
July 2, 1996, as amended, relating to Pioneer USA's
11 5/8% Senior Subordinated Notes due 2006 (incorporated
by reference to Exhibit 10.12 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.68 -- Fourth Supplemental Indenture, dated as of December 30,
1997, among Pioneer USA (formerly known as MOC), a
Delaware corporation, the Company, a Delaware
corporation, Pioneer NewSubl, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois
corporation, as Trustee, with respect to the Indenture
dated as of July 2, 1996, as amended, relating to Pioneer
USA's 11 5/8% Senior Subordinated Discount Notes Due
(incorporated by reference to Exhibit 10.13 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.69 -- Fifth Supplemental Indenture, dated as of December 30,
1997, among Pioneer NewSubl, Inc. (as successor to
Pioneer USA), a Texas corporation, the Company, a
Delaware corporation, Pioneer DebtCo, Inc., a Texas
corporation, and Harris Trust and Savings Bank, an
Illinois corporation, as Trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount
Notes Due 2006 (incorporated by reference to Exhibit
10.14 to the Company's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on January 2, 1998).
10.70 -- Sixth Supplemental Indenture, dated as of December 30,
1997, among Pioneer DebtCo, Inc.(as successor to Pioneer
NewSub1, Inc.), a Texas corporation, the Company, a
Delaware corporation, and Harris Trust and Savings Bank,
an Illinois corporation, as Trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount
Notes Due 2006 (incorporated by reference to Exhibit
10.15 to the Company's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on January 2, 1998).
10.71 -- First Supplemental Indenture, dated as of August 7, 1997,
among Parker & Parsley, The Chase Manhattan Bank, as
Trustee, and Pioneer USA, with respect to the Indenture,
dated April 12, 1995, between Pioneer USA (successor to
Parker & Parsley), and The Chase Manhattan Bank (National
Association), as Trustee (incorporated by reference to
Exhibit 10.9 to the Company's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC
on November 3, 1997).
10.72 -- Second Supplemental Indenture, dated as of December 30,
1997, among Pioneer USA, a Delaware corporation, Pioneer
NewSubl, Inc., a Texas corporation, and The Chase
Manhattan Bank, a New York banking association, as
Trustee, with respect to the Indenture, dated as of April
12, 1995, as amended, relating to Pioneer USA's 8 7/8%
Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007
(incorporated by reference to Exhibit 10.17 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
</TABLE>
<PAGE> 88
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.73 -- Third Supplemental Indenture, dated as of December 30,
1997, among Pioneer NewSubl, Inc. (as successor to
Pioneer USA), a Texas corporation, Pioneer DebtCo, Inc.,
a Texas corporation, and The Chase Manhattan Bank, a New
York banking association, as Trustee, with respect to the
Indenture, dated as of April 12, 1995, as amended,
relating to Pioneer USA's 8 7/8% Senior Notes Due 2005
and 8 1/4% Senior Notes Due 2007 (incorporated by
reference to Exhibit 10.18 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.74 -- Fourth Supplemental Indenture, dated as of December 30,
1997, among Pioneer DebtCo, Inc. (as successor to Pioneer
NewSubl, Inc., as successor to Pioneer USA), a Texas
corporation, the Company, a Delaware corporation, Pioneer
USA, a Delaware corporation, and The Chase Manhattan
Bank, a New York banking association, as trustee, with
respect to the Indenture, dated as of April 12, 1995, as
amended, relating to Pioneer USA's 8 7/8% Senior Notes
Due 2005 and 8 1/4% Senior Notes Due 2007 (incorporated
by reference to Exhibit 10.19 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.75 -- Guarantee, dated as of December 30, 1997, by Pioneer USA
relating to the $150,000,000 in aggregate principal
amount of 8 7/8% Senior Notes Due 2005 and $150,000,000
in aggregate principal amount of 8 1/4% Senior Notes Due
2007 issued under the Indenture, dated as of April 12,
1995, between Pioneer USA and The Chase Manhattan Bank, a
New York banking association, as Trustee (incorporated by
reference to Exhibit 10.20 to the Company's Current
Report on Form 8-K, File No. 001-13245, filed with the
SEC on January 2, 1998).
10.76 -- Note, dated December 22, 1997, between the Company, as
Borrower, and NationsBank of Texas, N.A., as Lender
(incorporated by reference to Exhibit 10.21 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
10.77 -- Purchase and Sale Agreement, dated as of October 22,
1997, between Cometra Energy, L.P., and Pioneer USA
(incorporated by reference to Exhibit 10.22 to the
Company's Current Report on Form 8-K, File No. 001-13245,
filed with the SEC on January 2, 1998).
12.1** -- Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.
23.1** -- Consent of KPMG Peat Marwick LLP.
23.2** -- Consent of Arthur Andersen LLP.
23.3** -- Consent of Price Waterhouse, chartered accountants.
23.4** -- Consent of Coopers & Lybrand L.L.P.
23.5** -- Consent of Netherland, Sewell & Associates, Inc.
23.6** -- Consent of Williamson Petroleum Consultants, Inc.
23.7** -- Consent of Miller and Lents, Ltd.
23.8+ -- Consent of Gilbert Lausten Jung Associates, Ltd.
</TABLE>
<PAGE> 89
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.9** -- Consent of Martin Petroleum and Associates.
23.10* -- Consent of Vinson & Elkins L.L.P. (included in the
opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1+ -- Powers of Attorney of directors and officers of the
Company.
24.2** -- Powers of Attorney of Pioneer USA (included on page II-16
to this Registration Statement).
25.1* -- Form T-1 Statement for eligibility under the Trust
Indenture Act of 1939 of trustee.
</TABLE>
- ---------------
+ Previously filed.
* To be filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 4.2
================================================================================
PIONEER NATURAL RESOURCES COMPANY
AND
[ ],
AS TRUSTEE
----------
INDENTURE
DATED AS OF [ ]
-----------
DEBT SECURITIES
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
RECITALS OF THE COMPANY..................................................................................1
ARTICLE I
DEFINITIONS
Section 1.01. Certain Terms Defined..................................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act.....................................14
Section 1.03. Rules of Construction.................................................................14
ARTICLE II
DEBT SECURITIES
Section 2.01. Forms Generally.......................................................................15
Section 2.02. Form of Trustee's Certificate of Authentication.......................................16
Section 2.03. Principal Amount; Issuable in Series..................................................16
Section 2.04. Execution of Debt Securities..........................................................19
Section 2.05. Authentication and Delivery of Debt Securities........................................20
Section 2.06. Denomination of Debt Securities.......................................................21
Section 2.07. Registration of Transfer and Exchange.................................................21
Section 2.08. Temporary Debt Securities.............................................................23
Section 2.09. Mutilated, Destroyed, Lost or Stolen Debt Securities..................................24
Section 2.10. Cancelation of Surrendered Debt Securities............................................25
Section 2.11. Provisions of the Indenture and Debt Securities for the Sole
Benefit of the Parties and the Holders................................................26
Section 2.12. Payment of Interest; Interest Rights Preserved........................................26
Section 2.13. Securities Denominated in Foreign Currencies..........................................27
Section 2.14. Wire Transfers........................................................................28
Section 2.15. Securities Issuable in the Form of a Global Security..................................28
Section 2.16. Medium Term Securities................................................................30
Section 2.17. Defaulted Interest....................................................................31
Section 2.18. Judgments.............................................................................32
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01. Applicability of Article..............................................................33
Section 3.02. Tax Redemption; Special Tax Redemption................................................33
Section 3.03. Notice of Redemption; Selection of Debt Securities....................................35
Section 3.04. Payment of Debt Securities Called for Redemption......................................36
Section 3.05. Mandatory and Optional Sinking Funds..................................................37
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 3.06. Redemption of Debt Securities for Sinking Fund........................................38
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. Payment of Principal of, and Premium, If Any, and Interest on,
Debt Securities.......................................................................40
Section 4.02. Maintenance of Offices or Agencies for Registration of Transfer,
Exchange and Payment of Debt Securities...............................................40
Section 4.03. Appointment to Fill a Vacancy in the Office of Trustee................................41
Section 4.04. Duties of Paying Agents, etc..........................................................41
Section 4.05. Statement by Officers as to Default...................................................42
Section 4.06. Payment of Additional Interest........................................................42
Section 4.07. Further Instruments and Acts..........................................................44
Section 4.08. Existence.............................................................................44
Section 4.09. Maintenance of Properties.............................................................44
Section 4.10. Payment of Taxes and Other Claims.....................................................44
Section 4.11. Limitation on Liens...................................................................45
Section 4.12. Limitation on Sale/Leaseback Transactions.............................................45
ARTICLE V
HOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 5.01. Company to Furnish Trustee Information as to Names and Addresses
of Holders; Preservation of Information...............................................45
Section 5.02. Communications to Holders.............................................................46
Section 5.03. Reports by Company....................................................................46
Section 5.04. Reports by Trustee....................................................................47
Section 5.05. Record Dates for Action by Holders....................................................47
ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01. Events of Default.....................................................................48
Section 6.02. Collection of Indebtedness by Trustee, etc............................................50
Section 6.03. Application of Moneys Collected by Trustee............................................52
Section 6.04. Limitation on Suits by Holders........................................................53
Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights Not
a Waiver of Default...................................................................53
Section 6.06. Rights of Holders of Majority in Principal Amount of Debt Securities
to Direct Trustee and to Waive Default................................................53
</TABLE>
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<TABLE>
<S> <C>
Section 6.07. Trustee to Give Notice of Defaults Known to It, but May Withhold
Such Notice in Certain Circumstances..................................................54
Section 6.08. Requirement of an Undertaking To Pay Costs in Certain Suits under
the Indenture or Against the Trustee..................................................54
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities...................................................55
Section 7.02. Certain Rights of Trustee.............................................................56
Section 7.03. Trustee Not Liable for Recitals in Indenture or in Debt Securities....................57
Section 7.04. Trustee, Paying Agent or Registrar May Own Debt Securities............................57
Section 7.05. Moneys Received by Trustee to Be Held in Trust........................................58
Section 7.06. Compensation and Reimbursement........................................................58
Section 7.07. Right of Trustee to Rely on an Officers' Certificate Where No Other
Evidence Specifically Prescribed......................................................58
Section 7.08. Separate Trustee; Replacement of Trustee..............................................59
Section 7.09. Successor Trustee by Merger...........................................................60
Section 7.10. Eligibility; Disqualification.........................................................60
Section 7.11. Preferential Collection of Claims Against Company.....................................60
Section 7.12. Compliance with Tax Laws..............................................................60
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01. Evidence of Action by Holders.........................................................61
Section 8.02. Proof of Execution of Instruments and of Holding of Debt Securities...................61
Section 8.03. Who May Be Deemed Owner of Debt Securities............................................61
Section 8.04. Instruments Executed by Holders Bind Future Holders...................................62
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Purposes for Which Supplemental Indenture May Be Entered into
Without Consent of Holders............................................................63
Section 9.02. Modification of Indenture with Consent of Holders of Debt Securities..................65
Section 9.03. Effect of Supplemental Indentures.....................................................66
Section 9.04. Debt Securities May Bear Notation of Changes by Supplemental
Indentures............................................................................67
Section 9.05. Payment for Consent...................................................................67
</TABLE>
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<TABLE>
ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
<S> <C>
Section 10.01. Consolidations and Mergers of the Company.............................................67
Section 10.02. Rights and Duties of Successor Corporation............................................67
ARTICLE XI
SATISFACTION AND DISCHARGE OF
INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01. Applicability of Article..............................................................68
Section 11.02. Satisfaction and Discharge of Indenture; Defeasance...................................68
Section 11.03. Conditions of Defeasance..............................................................69
Section 11.04. Application of Trust Money............................................................71
Section 11.05. Repayment to Company..................................................................71
Section 11.06. Indemnity for U.S. Government Obligations.............................................71
Section 11.07. Reinstatement.........................................................................71
ARTICLE XII
SUBORDINATION OF DEBT SECURITIES
Section 12.01. Applicability of Article; Agreement To Subordinate....................................71
Section 12.02. Liquidation, Dissolution, Bankruptcy..................................................72
Section 12.03. Default on Senior Indebtedness........................................................72
Section 12.04. Acceleration of Payment of Debt Securities............................................73
Section 12.05. When Distribution Must Be Paid Over...................................................73
Section 12.06. Subrogation...........................................................................73
Section 12.07. Relative Rights.......................................................................73
Section 12.08. Subordination May Not Be Impaired by Company..........................................74
Section 12.09. Rights of Trustee and Paying Agent....................................................74
Section 12.10. Distribution or Notice to Representative..............................................74
Section 12.11. Article XII Not to Prevent Defaults or Limit Right to Accelerate......................74
Section 12.12. Trust Moneys Not Subordinated.........................................................74
Section 12.13. Trustee Entitled to Rely..............................................................74
Section 12.14. Trustee to Effectuate Subordination...................................................75
Section 12.15. Trustee Not Fiduciary for Holders of Senior Indebtedness..............................75
Section 12.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions............................................................................75
</TABLE>
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<TABLE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
<S> <C>
Section 13.01. Successors and Assigns of Company Bound by Indenture..................................75
Section 13.02. Acts of Board, Committee or Officer of Successor Company Valid........................76
Section 13.03. Required Notices or Demands...........................................................76
Section 13.04. Indenture and Debt Securities to Be Construed in Accordance with the
Laws of the State of New York.........................................................77
Section 13.05. Officers' Certificate and Opinion of Counsel to Be Furnished
upon Application or Demand by the Company.............................................77
Section 13.06. Payments Due on Legal Holidays........................................................77
Section 13.07. Provisions Required by Trust Indenture Act to Control.................................77
Section 13.08. Computation of Interest on Debt Securities............................................77
Section 13.09. Rules by Trustee, Paying Agent and Registrar..........................................78
Section 13.10. No Recourse Against Others............................................................78
Section 13.11. Severability..........................................................................78
Section 13.12. Effect of Headings....................................................................78
Section 13.13. Indenture May Be Executed in Counterparts.............................................78
</TABLE>
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<PAGE> 7
INDENTURE dated as of _____________________, between PIONEER NATURAL
RESOURCES COMPANY, a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter sometimes called the "Company"), and
____________________, an association duly incorporated and existing under the
Federal laws of the United States (hereinafter sometimes called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the "Debt Securities"),
as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which the Debt
Securities are authenticated, issued and delivered, and in consideration of the
premises, and of the purchase and acceptance of the Debt Securities by the
holders thereof, the Company and the Trustee covenant and agree with each
other, for the benefit of the respective Holders from time to time of the Debt
Securities or any series thereof, as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN TERMS DEFINED. The terms defined in this Section
1.01 (except as herein otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any Indenture
supplemental hereto shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are defined in the
Trust Indenture Act or which are by reference therein defined in the Securities
Act (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in the
Trust Indenture Act and in the Securities Act as in force as of the date of
original execution of this Indenture.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, the remainder of:
(a) the sum of (i) discounted future net revenues from proved
oil and gas reserves of the Company and its Subsidiaries calculated
in accordance with SEC guidelines before any provincial, territorial,
state, Federal or foreign income taxes, as estimated by the Company
in a reserve report prepared as of the end of the Company's most
recently completed fiscal year for which audited financial statements
are available, as increased by, as of the date of determination, the
estimated discounted future net revenues from (A) estimated proved
oil and gas reserves acquired since such year end, which reserves
were not reflected in such year end reserve report, and (B) estimated
oil and gas reserves attributable to upward revisions of estimates of
proved oil and gas reserves since such year end due to exploration,
development or exploitation activities, in each case calculated in
accordance with SEC guidelines (utilizing the prices utilized in such
year end reserve report), and decreased by, as of the date of
determination, the estimated discounted future net revenues from (C)
estimated proved oil and gas reserves produced or disposed of since
such year end, and (D) estimated oil and gas reserves attributable to
downward revisions of estimates of proved oil and gas reserves since
such year end due to changes in geological conditions or other
factors which would, in accordance with standard industry practice,
cause such revisions, in each case calculated on a pre-tax basis and
substantially in accordance with SEC guidelines (utilizing the prices
utilized in such year end reserve report), in each case as estimated
by the Company's petroleum engineers or any independent petroleum
engineers engaged by the Company for that purpose; (ii) the
capitalized costs that are attributable to oil and gas properties of
the Company and its Subsidiaries to which no proved oil and gas
reserves are attributable, based on the Company's books and records
as of a date no earlier than the date of the Company's latest
available annual or quarterly financial statements, (iii) the Net
Working Capital on a date no earlier than the date of the Company's
latest annual or quarterly financial statements, and (iv) the greater
of (A) the net book value on a date no earlier than the date of the
Company's latest annual or quarterly financial statement, and (B) the
appraised value, as estimated by independent appraisers, of other
tangible assets of the Company and its Subsidiaries, as of the date
no earlier than the date of the Company's latest audited financial
statements; minus
(b) the sum of (i) Minority Interests; (ii) any net gas
balancing liabilities of the Company and its Subsidiaries reflected
in the Company's latest audited financial statements; (iii) to the
extent included in (a)(i) above, the discounted future net revenues,
calculated in accordance with SEC guidelines (utilizing the prices
utilized in the Company's year end reserve report), attributable to
reserves which are required to be delivered to third parties to fully
satisfy the obligations of the Company and its Subsidiaries with
respect to Volumetric Production Payments (determined, if applicable,
using the schedules specified with respect thereto); and (iv) the
discounted future net revenues, calculated in accordance with SEC
guidelines, attributable to reserves subject to Dollar-Denominated
Production Payments which, based on the estimates of production and
price assumptions included in determining the discounted future net
revenues specified (a)(i) above, would be necessary to fully satisfy
the payment obligations of the Company and its Subsidiaries with
respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto).
If the Company changes its method of accounting from the successful
efforts method to the full cost or a similar method of accounting, "Adjusted
Consolidated Net Tangible Assets" will continue to be calculated as if the
Company were still using the successful efforts method of accounting.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership
1
<PAGE> 8
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified pursuant to Section 2.03
with respect to the Debt Securities of any series. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any business day in
such city.
"Attributable Indebtedness" in respect of a Sale and Leaseback
Transaction means, as of the time of determination, (a) if the obligation in
respect of such Sale and Leaseback Transaction is a Capitalized Lease
Obligation, the amount of Indebtedness represented by such obligation shall be
the capitalized amount of such obligation determined in accordance with GAAP
and included in the financial statements of the lessee or (b) if the obligation
in respect of such Sale and Leaseback Transaction is not a Capitalized Lease
Obligation, the total Net Amount of Rent required to be paid by the lessee
under such lease during the remaining term thereof (including any period for
which the lease has been extended), discounted from the respective due dates
thereof to such determination date at the rate per annum borne by the
applicable series of Debt Securities compounded semi-annually.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreements, as supplemented amended or modified from time
to time, including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees and all other amounts payable thereunder
or in respect thereof.
"Banks" means the Lenders, as such term is defined in the Credit
Agreement.
"Bearer Holder" means, with respect to any Bearer Security or Coupon,
the bearer thereof.
"Bearer Security" means any Debt Security (with or without Coupons),
title to which passes by delivery only, but does not include any Coupons.
"Board of Directors" means either the Board of Directors of the
Company or any duly authorized committee or subcommittee of such Board, except
as the context may otherwise require.
"business day" means, when used with respect to any Place of Payment
specified pursuant to Section 2.03, any day that is not a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies in
such Place of Payment are authorized or obligated by law to close, except as
otherwise specified pursuant to Section 2.03.
"Capitalized Lease Obligation" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP.
2
<PAGE> 9
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests (including partnership interests) in (however designated) equity
of such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Commodity Price Protection Agreement" means, in respect of any
Person, any forward contract, commodity swap agreement, commodity option
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in commodity prices.
"Common Stock" means the common stock, par value $.01 per share, of
the Company, which stock is currently listed on the New York Stock Exchange.
"Company" means Pioneer Natural Resources Company, a Delaware
corporation, and, subject to the provisions of Article X, shall also include
its successors and assigns.
"Company Order" means a written order of the Company, signed by its
Chairman of the Board, Vice Chairman, President or any Vice President and by
its Treasurer, Secretary, any Assistant Treasurer or any Assistant Secretary.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of
any action for the purpose of which the determination is being made, as (a) the
par or stated value of all outstanding Capital Stock of the Company plus (b)
paid-in capital or capital surplus relating to such Capital Stock plus (c) any
retained earnings or earned surplus less (i) any accumulated deficit and (ii)
any amounts attributable to Disqualified Stock.
3
<PAGE> 10
"corporate trust office of the trustee" or other similar term means
the office of the Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered in the United States
of America, except that with respect to the presentation of Debt Securities for
payment or for registration of transfer and exchange, such term shall also mean
the office of the Trustee or the Trustee's agent in the Borough of Manhattan,
the city and state of New York, at which at any particular time its corporate
agency business shall be conducted.
"Coupon" means any interest coupon appertaining to any Bearer Security.
"Coupon Security" means any Bearer Security authenticated and
delivered with one or more Coupons appertaining thereto.
"Credit Agreements" means (i) the Amended and Restated Credit Facility
Agreement (Primary Facility), dated as of December 18, 1997, among the Company,
as Borrower, and NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, and the
Co-Agents and Lenders party thereto; (ii) the Amended and Restated Credit
Facility Agreement (364 Day Facility), dated as of December 18, 1997, among the
Company, as Borrower, and NationsBank of Texas, N.A., as Administrative Agent,
CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, and the
Co-Agents and Lenders party thereto; (iii) the Term Note, dated as of December
22, 1997, executed by the Company and payable to NationsBank of Texas, N.A., in
the original principal amount of $100 million; and (iv) the Credit Agreement,
dated as of December 18, 1997, among Chauvco Resources Ltd., Canadian Imperial
Bank of Commerce, and the other lenders signatory thereto; as supplemented,
amended or modified from time to time.
"Currency" means Dollars or Foreign Currency.
"Currency Exchange Protection Agreement" means, in respect of any
Person, any foreign exchange contract, currency swap agreement, currency option
or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
"Debt Security" or "Debt Securities" has the meaning stated in the
first recital of this Indenture and more particularly means any debt security
or debt securities, as the case may be of any series authenticated and
delivered under this Indenture.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means, unless otherwise specified by the Company pursuant
to either Section 2.03 or 2.15, with respect to registered Debt Securities of
any series issuable or issued in whole or in part in the form of one or more
Global Securities, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Exchange Act or
other applicable statute or regulations.
"Designated Senior Indebtedness" means (a) the Bank Indebtedness and
(b) any other Senior Indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $100
million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Indenture and has been designated as
"Designated Senior Indebtedness" for purposes of this Indenture in an Officers'
Certificate received by the Trustee.
4
<PAGE> 11
"Disqualified Stock" of a Person means Redeemable Stock of such Person
as to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the holder thereof occurs, or may occur, on or
prior to the first anniversary of the Stated Maturity of the applicable series
of Debt Securities.
"Dollar" or "$" means such currency of the United States as at the
time of payment is legal tender for the payment of public and private debts.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Dollar Equivalent" means, with respect to any monetary amount in a
Foreign Currency, at any time for the determination thereof, the amount of
Dollars obtained by converting such Foreign Currency involved in such
computation into Dollars at the spot rate for the purchase of Dollars with the
applicable Foreign Currency as quoted by Bankers Trust Company (unless another
comparable financial institution is designated by the Company) in New York, New
York at approximately 11:00 a.m. (New York time) on the date two business days
prior to such determination.
"European Currency Units" has the meaning assigned to it from time to
time by the Council of the European Communities, or its successor in the
European Union.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community, or
their successors in the European Union.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Floating Rate Security" means a Debt Security that provides for the
payment of interest at a variable rate determined periodically by reference to
an interest rate index specified pursuant to Section 2.03.
"Foreign Currency" means a currency issued by the government of any
country other than the United States or a composite currency the value of which
is determined by reference to the values of the currencies of any group of
countries.
"GAAP" means generally accepted accounting principles in the United
States as in effect as of the date on which the Debt Securities of the
applicable series are issued, including those set forth in (i) the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (ii) statements and pronouncements of the
Financial Accounting Standards Board, (iii) such other statements by such other
entity as approved by a significant segment of the accounting profession, and
(iv) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC. All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP consistently applied.
"Global Security" means with respect to any series of Debt Securities
issued hereunder, a Debt Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and
5
<PAGE> 12
any Indentures supplemental hereto, or resolution of the Board of Directors and
set forth in an Officers' Certificate, which shall be registered in the name of
the Depositary or its nominee and which shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, all the
Outstanding Debt Securities of such series or any portion thereof, in either
case having the same terms, including, without limitation, the same original
issue date, date or dates on which principal is due and interest rate or method
of determining interest.
"Government Contract Lien" means any Lien required by any contract,
statute, regulation or order in order to permit the Company or any of its
Subsidiaries to perform any contract or subcontract made by it with or at the
request of the United States or any State thereof or any department, agency or
instrumentality of either or to secure partial, progress, advance or other
payments by the Company or any of its Subsidiaries to the United States or any
State thereof or any department, agency or instrumentality of either pursuant
to the provisions of any contract, statute, regulation or order.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation of such
other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Protection Agreement, Currency Exchange
Protection Agreement, Commodity Price Protection Agreement or other similar
agreement.
"Holder," "Holder of Debt Securities" or other similar terms means,
with respect to a Registered Security, the Registered Holder and, with respect
to a Bearer Security or a Coupon, the Bearer Holder.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Subsidiary at the time it becomes a Subsidiary. The terms "Incurred",
"Incurrence" and "Incurring" shall each have a correlative meaning.
"Indebtedness" means, with respect to any Person, at any date, any of
the following, without duplication: (i) any liability, contingent or otherwise,
of such Person (A) for borrowed money (whether or not the recourse of the lender
is to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by a note, bond, debenture or similar instrument, or (C) for the
payment of money relating to a Capitalized Lease Obligation or other obligation
(whether issued or assumed) relating to the deferred purchase price of property;
(ii) all conditional sale obligations and all obligations under any title
retention agreement (even if the rights and remedies of the seller under such
agreement in the event of default are limited to repossession or sale of such
property); (iii) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction other than
entered into in the ordinary course of business; (iv) all indebtedness of others
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on any asset or property
(including, without limitation, leasehold interests and any other tangible or
intangible property) of such Person, whether or not such indebtedness is assumed
by such Person or is not otherwise such Person's legal liability; provided that
if the obligations so secured have not been assumed in full by such Person or
are otherwise not such Person's legal liability in full, the amount of such
indebtedness for the purposes of this definition shall be limited to the lesser
of the amount of such indebtedness secured by such Lien or the fair market value
of the assets of the property securing such lien; (v) all indebtedness of others
(including all interest and dividends on any Indebtedness or Preferred Stock of
any other Person for the payment of which is) guaranteed, directly or
indirectly, by such Person or that is otherwise its legal liability or which
such Person has agreed to purchase or repurchase or in respect of which such
Person has agreed contingently to supply or advance funds; and (vi) to the
extent not otherwise included in this definition, obligations in respect of
Hedging Obligations. Indebtedness shall not include (a) accounts payable arising
in the ordinary course of business, and (b) any obligations in respect of
prepayments for gas or oil production or gas or oil imbalances.
6
<PAGE> 13
"Indenture" means this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented and
shall include the form and terms of particular series of Debt Securities as
contemplated hereunder, whether or not a supplemental Indenture is entered into
with respect thereto.
"Interest" includes, when used with respect to a Bearer Security, any
additional interest payable on such Bearer Security pursuant to Section 3.02 or
4.06.
"Interest Rate Protection Agreement" means, in respect of any Person,
any interest rate swap agreement, interest rate option agreement, interest rate
cap agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Minority Interest" means the percentage interest represented by any
shares of stock of any class of a Subsidiary that are not owned by the Company
or a Subsidiary.
"Net Amount of Rent" as to any lease for any period means the
aggregate amount of rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges. In the
case of any lease that is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as payable under such lease subsequent to the first
date upon which it may be so terminated.
"Net Working Capital" means (a) all current assets of the Company and
its Subsidiaries, less (b) all current liabilities of the Company and its
Subsidiaries, except current liabilities included in Indebtedness, in each case
as set forth in consolidated financial statements of the Company prepared in
accordance with GAAP.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman, the President or any Vice President and by the
Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary of
the Company. Each such certificate shall include the statements provided for in
Section 13.05, if applicable.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel for the Company (which counsel may be an employee of the Company), or
outside counsel for the Company. Each such opinion shall include the statements
provided for in Section 13.05, if applicable.
"Original Issue Discount Debt Security" means any Debt Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 6.01.
"Outstanding", when used with respect to any series of Debt
Securities, means, as of the date of determination, all Debt Securities of that
series theretofore authenticated and delivered under this Indenture, except:
(a) Debt Securities of that series theretofore canceled by the
Trustee or delivered to the Trustee for cancelation;
(b) Debt Securities of that series for whose payment or
redemption money in the necessary amount has been theretofore deposited with
the Trustee or any paying agent (other than
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the Company) in trust or set aside and segregated in trust by the Company (if
the Company shall act as its own paying agent) for the Holders of such Debt
Securities; provided, that, if such Debt Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(c) Debt Securities of that series which have been paid
pursuant to Section 2.09 or in exchange for or in lieu of which other Debt
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Debt Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Debt Securities are
held by a bona fide purchaser in whose hands such Debt Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Debt Securities of any series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Debt Securities owned by the Company or any other obligor upon the
Debt Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Debt
Securities which the Trustee knows to be so owned shall be so disregarded. Debt
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debt Securities and that the
pledgee is not the Company or any other obligor upon the Debt Securities or an
Affiliate of the Company or of such other obligor. In determining whether the
Holders of the requisite principal amount of Outstanding Debt Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Debt Security
that shall be deemed to be Outstanding for such purposes shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 6.01. In determining whether the Holders of the requisite
principal amount of the Outstanding Debt Securities of any series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of a Debt Security denominated in one or more
foreign currencies or currency units that shall be deemed to be Outstanding for
such purposes shall be the Dollar Equivalent, determined in the manner provided
as contemplated by Section 2.03 on the date of original issuance of such Debt
Security, of the principal amount (or, in the case of any Original Issue
Discount Security, the Dollar Equivalent on the date of original issuance of
such Security of the amount determined as provided in the preceding sentence
above) of such Debt Security.
"pari passu", as applied to the ranking of any Indebtedness of a
Person in relation to other Indebtedness of such Person, means that each such
Indebtedness either (a) is not subordinate in right of payment to any
Indebtedness or (b) is subordinate in right of payment to the same Indebtedness
as is the other, and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any Indebtedness as to
which the other is not so subordinate.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under worker's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness)
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or leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits of cash or United States
government bonds to secure performance, surety or appeal bonds to which such
Person is a party or which are otherwise required of such Person, or deposits
as security for contested taxes or import duties or for the payment of rent or
other obligations of like nature, in each case Incurred in the ordinary course
of business; (b) Liens imposed by law, such as carriers', warehousemen's,
laborers', materialmen's, landlords', vendors', workmen's, operators',
producers' (including those arising pursuant to Article 9.319 of the Texas
Uniform Commercial Code or other similar statutory provisions of other states
with respect to production purchased from others) and mechanics' Liens, in each
case for sums not yet due or being contested in good faith by appropriate
proceedings; (c) Liens for property taxes, assessments and other governmental
charges or levies not yet delinquent or subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings; (d) minor
survey exceptions, minor encumbrances, easements or reservations of or with
respect to, or rights of others for or with respect to, licenses,
rights-of-way, sewers, electric and other utility lines and usages, telegraph
and telephone lines, pipelines, surface use, operation of equipment, permits,
servitudes and other similar matters, or zoning or other restrictions as to the
use of real property or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not Incurred in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of such Person; (e) Liens existing on or provided
for under the terms of agreements existing on the Issue Date (including,
without limitation, under the Credit Agreements); (f) Liens on property or
assets of, or any shares of stock of or secured debt of, any Person at the time
the Company or any of its Subsidiaries acquired the property or the Person
owning such property, including any acquisition by means of a merger or
consolidation with or into the Company or any of its Subsidiaries; (g) Liens
securing a Hedging Obligation so long as such Hedging Obligation is of the type
customarily entered into in connection with, and is entered into for the
purpose of, limiting risk; (h) Liens upon specific properties of the Company or
any of its Subsidiaries securing Indebtedness Incurred in the ordinary course
of business to provide all or part of the funds for the exploration, drilling
or development of those properties; (i) Purchase Money Liens; (j) Liens
securing only Indebtedness of a wholly owned Subsidiary of the Company to the
Company or to one or more wholly owned Subsidiaries of the Company; (k) Liens
on any property to secure bonds for the construction, installation or financing
of pollution control or abatement facilities or other forms of industrial
revenue bond financing or Indebtedness issued or Guaranteed by the United
States, any state or any department, agency or instrumentality thereof; (l)
Government Contract Liens; (m) Liens in respect of Production Payments and
Reserve Sales; (n) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of defeasing Indebtedness of the Company
or any of its Subsidiaries; (o) legal or equitable encumbrances deemed to exist
by reason of negative pledges or the existence of any litigation or other legal
proceeding and any related lis pendens filing (excluding any attachment prior
to judgment, judgment lien or attachment lien in aid of execution on a
judgment); (p) rights of a common owner of any interest in property held by
such Person; (q) farmout, carried working interest, joint operating,
unitization, royalty, overriding royalty, sales and similar agreements relating
to the exploration or development of, or production from, oil and gas
properties entered into the ordinary course of business; (r) any defects,
irregularities or deficiencies in title to easements, rights-of-way or other
properties which do not in the aggregate materially adversely affect the value
of such properties or materially impair their use in the operation
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of the business of such Person; and (s) Liens to secure any refinancing,
refunding, extension, renewal or replacement (or successive refinancings,
refundings, extensions, renewals or replacements), as a whole, or in part, of
any Indebtedness secured by any Lien referred to in the foregoing clauses (e)
through (m); provided, however, that (i) such new Lien shall be limited to all
or part of the same property that secured the original Lien (plus improvements
on such property) and (ii) the Indebtedness secured by such Lien at such time
is not increased to any amount greater than the sum of (A) the outstanding
principal amount or, if greater, committed amount of the Indebtedness described
under clauses (e) through (m) at the time the original Lien became a Permitted
Lien under this Indenture and (B) an amount necessary to pay any fees and
expenses, including premiums, related to such refinancing, refunding,
extension, renewal or replacement.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Place of Payment" means, when used with respect to the Debt
Securities of any series, the place or places where the principal of, and
premium, if any, and interest on, the Debt Securities of that series are
payable as specified pursuant to Section 2.03.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principal Property" means any interest owned by the Company or any
of its Subsidiaries in property situated in or outside of the United States
and any shares of capital stock or Indebtedness of a Subsidiary of the Company
that owns or leases Principal Property.
"Production Payments and Reserve Sales" means the grant or transfer by
the Company or a Subsidiary of the Company to any Person of a royalty,
overriding royalty, net profits interest, production payment (whether volumetric
or dollar denominated), partnership or other interest in oil and gas properties,
reserves or the right to receive all or a portion of the production or the
proceeds from the sale of production attributable to such properties, including
any such grants or transfers pursuant to incentive compensation programs on
terms that are reasonably customary in the Oil and Gas Business for geologists,
geophysicists and other providers of technical services to the Company or a
Subsidiary of the Company.
"Purchase Money Lien" means a Lien on property securing Indebtedness
Incurred by the Company or any of its Subsidiaries to provide funds for all or
any portion of the cost of acquiring, constructing, altering, expanding,
improving or repairing such property or assets used in connection with such
property.
"Redeemable Stock" of any Person means any equity security of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including on the
happening of an event), is or could become required to be redeemed for cash or
other property or is or could become redeemable for cash or other property at
the option of the holder thereof, in whole or in part, on or prior to the first
anniversary of the stated maturity of the applicable series of Notes; or is or
could become exchangeable at the option of the holder thereof for Indebtedness
at any time in whole or in part, on or prior to the first anniversary of the
stated maturity of the applicable series of Debt Securities; provided, however,
that Redeemable Stock shall not include any security that may be exchanged or
converted at the option of the holder for Capital Stock of the Company having no
preference as to dividends or liquidation over any other Capital Stock of the
Company.
"Registered Holder" means the Person in whose name a Registered
Security is registered in the Debt Security Register (as defined in Section
2.07(a)).
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"Registered Security" means any Debt Security registered as to
principal and interest in the Debt Security Register (as defined in Section
2.07(a)).
"Registrar" has the meaning set forth in Section 2.07(a).
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Indebtedness.
"responsible officer", when used with respect to the Trustee, means
any Account Manager or any officer within the [NAME OF TRUSTEE'S INSTITUTIONAL
TRUST GROUP] of the Trustee, including any Vice President, any Second Vice
President, any trust officer or any other officer of the Trustee performing
functions similar to those performed by the persons who at the time shall be
such officers, and any other officer of the Trustee to whom corporate trust
matters are referred because of his knowledge of and familiarity with the
particular subject.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Subsidiary leases any Principal Property
that has been or is to be sold or transferred by the Company or the Subsidiary
to such Person, other than (i) temporary leases for a term, including renewals
at the option of the lessee, of not more than five years, (ii) leases between
the Company and a Subsidiary or between Subsidiaries, (iii) leases of Principal
Property executed by the time of, or within 12 months after the latest of, the
acquisition, the completion of construction or improvement, or the commencement
of commercial operation of the Principal Property, and (iv) arrangements
pursuant to any provision of law with an effect similar to the former Section
168(f)(8) of the Internal Revenue Code of 1954.
"Secured Indebtedness" means any Indebtedness of the Company secured by
a Lien.
"Securities Act" means the Securities Act of 1933.
"Senior Indebtedness" means, as to any series of Debt Securities
subordinated pursuant to the provisions of Article XII, the Indebtedness of the
Company identified as Senior Indebtedness in the resolution of the Board of
Directors and accompanying Officers' Certificate or supplemental Indenture
setting forth the terms, including as to Subordination, of such series.
"Significant Subsidiary" means a Subsidiary of any Person that would
be a "significant subsidiary" as defined in Rule 405 under the Securities Act
as in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
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"Subsidiary" of any Person means (i) any Person of which more than 50%
of the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Subsidiaries of that Person or a
combination thereof, and (ii) any partnership, joint venture or other Person in
which such Person or one or more of the Subsidiaries of that Person or a
combination thereof has the power to control by contract or otherwise the board
of directors or equivalent governing body or otherwise controls such entity.
"Temporary Cash Investments" means any of the following: (a)
investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (b) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States, any State thereof or any foreign country
recognized by the United States having capital, surplus and undivided profits
aggregating in excess of $500,000,000 (or the Dollar Equivalent thereof) and
whose long-term debt is rated "A" or higher according to Moody's Investors
Service, Inc. (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)), (c) repurchase obligations with a term of not more than 7
days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b)
above and (d) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of the Company) organized and in existence under the laws of the United States
or any foreign country recognized by the United States with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard
and Poor's Corporation.
"Trade Payables" means, with respect to any Person, any accounts
payable or any Indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
of such Person in connection with the acquisition of goods or services.
"Trustee" initially means [TRUSTEE] and any other Person or Persons
appointed as such from time to time pursuant to Section 7.08, and, subject to
the provisions of Article VII, includes its or their successors and assigns. If
at any time there is more than one such Person, "Trustee" as used with respect
to the Debt Securities of any series shall mean the Trustee with respect to the
Debt Securities of that series.
"Trust Indenture Act" (except as herein otherwise expressly provided)
means the Trust Indenture Act of 1939 as in force at the date of this Indenture
as originally executed and, to the extent required by law, as amended.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a nonresident alien individual,
a nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more members of which is, for United States Federal
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income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Yield to Maturity" means the yield to maturity, calculated at the
time of issuance of a series of Debt Securities, or, if applicable, at the most
recent redetermination of interest on such series and calculated in accordance
with accepted financial practice.
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the Trust Indenture Act
which are incorporated by reference in and made a part of this Indenture. The
following Trust Indenture Act terms have the following meanings:
"indenture securities" means the Debt Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Debt Securities.
All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, reference to another statute or defined by
rules of the Securities and Exchange Commission have the meanings assigned to
them by such definitions.
Section 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
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(e) words in the singular include the plural and words in the
plural include the singular;
(f) if the applicable series of Debt Securities are
subordinated pursuant to Article XII, unsecured Indebtedness shall not be
deemed to be subordinate or junior to Secured Indebtedness merely by virtue of
its nature as unsecured Indebtedness;
(g) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(h) the principal amount of any Preferred Stock shall be the
greater of (i) the maximum liquidation value of such Preferred Stock or (ii)
the maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE II
DEBT SECURITIES
Section 2.01. FORMS GENERALLY. The Debt Securities and Coupons, if
any, of each series shall be in substantially the form established without the
approval of any Holder by or pursuant to a resolution of the Board of Directors
or in one or more Indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as the Company may deem appropriate (and, if not contained in a supplemental
Indenture entered into in accordance with Article IX, as are not prohibited by
the provisions of this Indenture) or as may be required or appropriate to
comply with any law or with any rules made pursuant thereto or with any rules
of any securities exchange on which such series of Debt Securities may be
listed, or to conform to general usage, or as may, consistently herewith, be
determined by the officers executing such Debt Securities and Coupons, as
evidenced by their execution of the Debt Securities and Coupons.
The definitive Debt Securities of each series and Coupons, if any,
shall be printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Debt Securities and Coupons, as evidenced by their execution of such Debt
Securities and Coupons.
Each Bearer Security and each Coupon shall bear a legend substantially
to the following effect: "Any United States Person who holds this obligation
will be subject to limitations under the United States Federal income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
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Section 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's Certificate of Authentication on all Debt Securities authenticated by
the Trustee shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
[TRUSTEE],
As Trustee
By:
------------------------------------------
Authorized Signature
Section 2.03. PRINCIPAL AMOUNT; ISSUABLE IN SERIES. The aggregate
principal amount of Debt Securities which may be issued, executed,
authenticated, delivered and outstanding under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall
be established, without the approval of any Holders, in or pursuant to a
resolution of the Board of Directors and set forth in an Officers' Certificate,
or established in one or more Indentures supplemental hereto, prior to the
issuance of Debt Securities of any series any or all of the following:
(a) the title of the Debt Securities of the series (which
shall distinguish the Debt Securities of the series from all other Debt
Securities);
(b) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);
(c) the date or dates on which the principal and premium, if
any, of the Debt Securities of the series are payable;
(d) the rate or rates (which may be fixed or variable) at
which the Debt Securities of the series shall bear interest, if any, or the
method of determining such rate or rates, the date or dates from which such
interest shall accrue, the interest payment dates on which such interest shall
be payable, or the method by which such date will be determined, in the case of
Registered Securities, the record dates for the determination of Holders
thereof to whom such interest is payable; and the basis upon which interest
will be calculated if other than that of a 360-day year of twelve thirty-day
months;
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(e) the place or places, if any, in addition to or instead of
the corporate trust office of the Trustee (in the case of Registered
Securities) or the principal London office of the Trustee (in the case of
Bearer Securities), where the principal of, and premium, if any, and interest
on, Debt Securities of the series shall be payable;
(f) the price or prices at which, the period or periods
within which and the terms and conditions upon which Debt Securities of the
series may be redeemed, in whole or in part, at the option of the Company or
otherwise;
(g) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer Securities
are to be issued, whether Coupons will be attached thereto, whether Bearer
Securities of the series may be exchanged for Registered Securities of the
series and the circumstances under which and the places at which any such
exchanges, if permitted, may be made;
(h) if any Debt Securities of the series are to be issued as
Bearer Securities or as one or more Global Securities representing individual
Bearer Securities of the series, (i) whether the provisions of Sections 3.02
and 4.06 or other provisions for payment of additional interest or tax
redemptions shall apply and, if other provisions shall apply, such other
provisions; (ii) whether interest in respect of any portion of a temporary
Bearer Security of the series (delivered pursuant to Section 2.08) payable in
respect of any interest payment date prior to the exchange of such temporary
Bearer Security for definitive Bearer Securities of the series shall be paid to
any clearing organization with respect to the portion of such temporary Bearer
Security held for its account and, in such event, the terms and conditions
(including any certification requirements) upon which any such interest payment
received by a clearing organization will be credited to the Persons entitled to
interest payable on such interest payment date; and (iii) the terms upon which
a temporary Bearer Security may be exchanged for one or more definitive Bearer
Securities of the series;
(i) the obligation, if any, of the Company to redeem,
purchase or repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligations;
(j) the terms, if any, upon which the Debt Securities of the
series may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by depositary shares), other Debt Securities or
warrants for Common Stock, Preferred Stock or Indebtedness or other securities
of any kind of the Company or any other obligor and the terms and conditions
upon which such conversion or exchange shall be effected, including the initial
conversion or exchange price or rate, the conversion or exchange period and any
other provision in addition to or in lieu of those described herein;
(k) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of the series
shall be issuable;
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(l) if the amount of principal of or any premium or interest
on Debt Securities of the series may be determined with reference to an index
or pursuant to a formula, the manner in which such amounts will be determined;
(m) if the principal amount payable at the Stated Maturity of
Debt Securities of the series will not be determinable as of any one or more
dates prior to such Stated Maturity, the amount which will be deemed to be such
principal amount as of any such date for any purpose, including the principal
amount thereof which will be due and payable upon any maturity other than the
Stated Maturity or which will be deemed to be Outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount is to
be determined); and the manner of determining the equivalent thereof in the
currency of the United States of America for purposes of the definition of
Dollar Equivalent;
(n) any changes or additions to Article XI, including the
addition of additional covenants that may be subject to the covenant defeasance
option pursuant to Section 11.02(b)(ii);
(o) if other than such coin or Currency of the United States
as at the time of payment is legal tender for payment of public and private
debts, the coin or Currency or Currencies or units of two or more Currencies in
which payment of the principal of, and premium, if any, and interest on, Debt
Securities of the series shall be payable;
(p) if other than the principal amount thereof, the portion
of the principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section
6.01 or provable in bankruptcy pursuant to Section 6.02;
(q) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Debt Securities of the series of any properties,
assets, moneys, proceeds, securities or other collateral, including whether
certain provisions of the Trust Indenture Act are applicable and any
corresponding changes to provisions of this Indenture as currently in effect;
(r) any addition to or change in the Events of Default with
respect to the Debt Securities of the series and any change in the right of the
Trustee or the Holders to declare the principal of, and premium and interest
on, such Debt Securities due and payable;
(s) if the Debt Securities of the series shall be issued in
whole or in part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Debt Securities in
definitive registered form; and the Depositary for such Global Security or
Securities and the form of any legend or legends to be borne by any such Global
Security or Securities in addition to or in lieu of the legend referred to in
Section 2.15;
(t) any trustees, authenticating or paying agents, transfer
agents or registrars;
(u) the applicability of, and any addition to or change in
the covenants and definitions currently set forth in this Indenture or in the
terms currently set forth in Article X,
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including conditioning any merger, conveyance, transfer or lease permitted by
Article X upon the satisfaction of an Indebtedness coverage standard by the
Company and Successor Company (as defined in Article X);
(v) the terms, if any, of any Guarantee of the payment of
principal of, and premium, if any, and interest on, Debt Securities of the
series and any corresponding changes to the provisions of this Indenture as
currently in effect;
(w) the subordination, if any, of the Debt Securities of the
series pursuant to Article XII and any changes or additions to Article XII;
(x) with regard to Debt Securities of the series that do not
bear interest, the dates for certain required reports to the Trustee; and
(y) any other terms of the Debt Securities of the series
(which terms shall not be prohibited by the provisions of this Indenture).
All Debt Securities of any one series and the Coupons, if any,
appertaining thereto shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to such resolution of
the Board of Directors and as set forth in such Officers' Certificate or in any
such Indenture supplemental hereto.
Section 2.04. EXECUTION OF DEBT SECURITIES. The Debt Securities and
the Coupons, if any, shall be signed on behalf of the Company by its Chairman
of the Board, its Vice Chairman, its President or a Vice President and by its
Secretary, an Assistant Secretary, a Treasurer or an Assistant Treasurer. Such
signatures upon the Debt Securities and Coupons may be the manual or facsimile
signatures of the present or any future such authorized officers and may be
imprinted or otherwise reproduced on the Debt Securities and Coupons. The seal
of the Company, if any, may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Debt Securities
and Coupons.
Only such Debt Securities and Coupons as shall bear thereon a
certificate of authentication substantially in the form hereinbefore recited,
signed manually by the Trustee, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Debt Security or Coupon executed by the Company shall be
conclusive evidence that the Debt Security or Coupon so authenticated has been
duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any of the
Debt Securities or Coupons shall cease to be such officer before the Debt
Securities or Coupons so signed shall have been authenticated and delivered by
the Trustee, or disposed of by the Company, such Debt Securities or Coupons
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debt Securities or Coupons had not ceased to be such
officer of the Company; and any Debt Security or Coupon may be signed on behalf
of the Company by such Persons as, at the actual date of the execution of such
Debt Security or Coupon, shall be the proper
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officers of the Company, although at the date of such Debt Security or Coupon
or of the execution of this Indenture any such Person was not such officer.
Section 2.05. AUTHENTICATION AND DELIVERY OF DEBT SECURITIES. At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Debt Securities, with appropriate Coupons, if any, of
any series executed by the Company to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Debt Securities and
Coupons to or upon a Company Order. In authenticating such Debt Securities and
Coupons, and accepting the additional responsibilities under this Indenture in
relation to such Debt Securities and Coupons, the Trustee shall be entitled to
receive, and (subject to Section 7.01) shall be fully protected in relying
upon:
(a) a copy of any resolution or resolutions of the Board of
Directors, certified by the Secretary or Assistant Secretary of the Company,
authorizing the terms of issuance of any series of Debt Securities and Coupons;
(b) an executed supplemental Indenture, if any;
(c) an Officers' Certificate; and
(d) an Opinion of Counsel prepared in accordance with Section
13.05 which shall also state:
(i) that the form of such Debt Securities and
Coupons has been established by or pursuant to a resolution of the
Board of Directors or by a supplemental Indenture as permitted by
Section 2.01 in conformity with the provisions of this Indenture;
(ii) that the terms of such Debt Securities and
Coupons have been established by or pursuant to a resolution of the
Board of Directors or by a supplemental Indenture as permitted by
Section 2.03 in conformity with the provisions of this Indenture;
(iii) that such Debt Securities and Coupons, when
authenticated and delivered by the Trustee and issued by the Company
in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and (B) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability;
(iv) that the Company has the corporate power to
issue such Debt Securities and Coupons and has duly taken all
necessary corporate action with respect to such issuance;
(v) that the issuance of such Debt Securities and
Coupons will not contravene the charter or by-laws of the Company or
result in any material violation of any
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of the terms or provisions of any law or regulation or of any
indenture, mortgage or other agreement known to such counsel by which
the Company is bound;
(vi) that authentication and delivery of such Debt
Securities and Coupons and the execution and delivery of any
supplemental Indenture will not violate the terms of this Indenture;
and
(vii) such other matters as the Trustee may
reasonably request.
Such Opinion of Counsel need express no opinion as to whether a court
in the United States would render a money judgment in a currency other than
that of the United States.
The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities or Coupons under this Section 2.05 if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
or if the Trustee in good faith by its board of directors or trustees,
executive committee or a trust committee of directors, trustees or vice
presidents shall determine that such action would expose the Trustee to
personal liability to existing Holders.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Debt Securities and Coupons, if any, of any
series. Unless limited by the terms of such appointment, an authenticating
agent may authenticate Debt Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
any Registrar, paying agent or agent for service of notices and demands.
Unless otherwise provided in the form of Debt Security for any series,
each Debt Security shall be dated the date of its authentication.
Section 2.06. DENOMINATION OF DEBT SECURITIES. Unless otherwise
provided in the form of Debt Security for any series, the Debt Securities of
each series shall be issuable only as Registered Securities in such
denominations as shall be specified or contemplated by Section 2.03. In the
absence of any such specification with respect to the Debt Securities of any
series, the Debt Securities of such series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
Section 2.07. REGISTRATION OF TRANSFER AND EXCHANGE. (a) The Company
shall keep or cause to be kept a register for each series of Registered
Securities issued hereunder (hereinafter collectively referred to as the "Debt
Security Register"), in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and the transfer of Registered Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for
inspection by the Trustee. Subject to Section 2.15, upon due presentment for
registration of transfer of any Registered Security at any office or agency to
be maintained by the Company in accordance with the provisions of Section 4.02,
the Company shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Registered Security or Registered
Securities of authorized denominations for a like
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aggregate principal amount. In no event may Registered Securities, including
Registered Securities received in exchange for Bearer Securities, be exchanged
for Bearer Securities.
Unless and until otherwise determined by the Company by resolution of
the Board of Directors, the register of the Company for the purpose of
registration, exchange or registration of transfer of the Registered Securities
shall be kept at the corporate trust office of the Trustee and, for this
purpose, the Trustee shall be designated "Registrar".
Registered Securities of any series (other than a Global Security,
except as set forth below) may be exchanged for a like aggregate principal
amount of Registered Securities of the same series of other authorized
denominations. Subject to Section 2.15, Registered Securities to be exchanged
shall be surrendered at the office or agency to be maintained by the Company as
provided in Section 4.02, and the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor the Registered Security or
Registered Securities which the Holder making the exchange shall be entitled to
receive.
At the option of the Holder of Bearer Securities of any series, except
as otherwise specified as contemplated by Section 2.03(8) or 2.03(19) with
respect to a Global Security representing Bearer Securities, Bearer Securities
of such series may be exchanged for Registered Securities (if the Debt
Securities of such series are issuable as Registered Securities) or Bearer
Securities of the same series, of any authorized denomination or denominations,
of like tenor and aggregate principal amount, upon surrender of the Bearer
Securities to be exchanged at the office or agency of the Company maintained
for such purpose, with all unmatured Coupons and all matured Coupons in Default
thereto appertaining; provided, however, that delivery of a Bearer Security
shall occur only outside the United States. If such Holder is unable to produce
any such unmatured Coupon or Coupons or matured Coupon or Coupons in Default,
such exchange may be effected if such Holder's Bearer Securities are
accompanied by payment in funds acceptable to the Company and the Trustee in an
amount equal to the face amount of such missing Coupon or Coupons, or the
surrender of such missing Coupon or Coupons may be waived by the Company and
the Trustee if there be furnished to them such security or indemnity as they
may require to save each of them and any paying agent harmless. If thereafter
such Holder shall surrender to any paying agent any such missing Coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; provided, however, that, except
as otherwise provided in Section 2.12, interest represented by Coupons shall be
payable only upon presentation and surrender of those Cou pons at an office or
agency located outside the United States.
Whenever any Debt Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Debt
Securities that the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Debt Securities in effect at the time of
such exchange.
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(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed or be accompanied by a
written instrument or instruments of transfer, in form satisfactory to the
Company, the Trustee and the Registrar, duly executed by the Registered Holder
or his attorney duly authorized in writing.
All Debt Securities issued in exchange for or upon transfer of Debt
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture as the Debt
Securities surrendered for such exchange or transfer.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities (except as provided by Section 2.09), but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto, other than those
expressly provided in this Indenture to be made at the Company's own expense or
without expense or without charge to the Holders.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Debt Securities for a period of 15 days next preceding any
mailing of notice of redemption of Debt Securities of such series or (ii) to
register the transfer of or exchange any Debt Securities selected, called or
being called for redemption; provided, however, that, if specified pursuant to
Section 2.03, any Bearer Securities of any series that are exchangeable for
Registered Securities and that are called for redemption pursuant to Section
3.02 may, to the extent permitted by applicable law, be exchanged for one or
more Registered Securities of such series during the period preceding the
redemption date therefor.
Prior to the due presentation for registration of transfer of any Debt
Security, the Company, the Trustee, any paying agent or any Registrar may deem
and treat the Person in whose name a Debt Security is registered as the
absolute owner of such Debt Security for the purpose of receiving payment of
principal of, and premium, if any, and interest on, such Debt Security and for
all other purposes whatsoever, whether or not such Debt Security is overdue,
and none of the Company, the Trustee, any paying agent or Registrar shall be
affected by notice to the contrary.
None of the Company, the Trustee, any agent of the Trustee, any paying
agent or any Registrar will have any responsibility or liability for any aspect
of the records relating to, or payments made on account of, beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Section 2.08. TEMPORARY DEBT SECURITIES. Pending the preparation of
definitive Debt Securities of any series, the Company may execute and the
Trustee shall authenticate and deliver temporary Debt Securities (printed,
lithographed, photocopied, typewritten or otherwise produced) of any authorized
denomination, and substantially in the form of the definitive Debt Securities
in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more Coupons or without Coupons, and with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities and Coupons, all as may be determined by the Company with the
concurrence of the Trustee. Temporary Debt Securities and Coupons may contain
such
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reference to any provisions of this Indenture as may be appropriate. Every
temporary Debt Security shall be executed by the Company and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. Except as otherwise specified as contemplated by Section
2.03(8)(z) with respect to a series of Debt Securities issuable as Bearer
Securities or as one or more Global Securities representing individual Bearer
Securities of the series, (a) after the preparation of definitive Debt
Securities of such series, the temporary Debt Securities of such series shall
be exchangeable for definitive Debt Securities of such series upon surrender of
the temporary Debt Securities of such series at the office or agency of the
Company at a Place of Payment for such series, without charge to the Holder
thereof, except as provided in Section 2.07 in connection with a transfer and
except that a Person receiving definitive Bearer Securities shall bear the cost
of insurance, postage, transportation and the like unless otherwise specified
pursuant to Section 2.03, and (b) upon surrender for cancelation of any one or
more temporary Debt Securities of any series (accompanied by any unmatured
Coupons appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Debt Securities of the same series of authorized denominations and
of like tenor; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided,
further, however, that delivery of a Global Security representing individual
Bearer Securities or a Bearer Security shall occur only outside the United
States. Until so exchanged, temporary Debt Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities of such series, except as otherwise specified as
contemplated by Section 2.03(8)(y) with respect to the payment of interest on
Global Securities in temporary form.
Unless otherwise specified pursuant to Section 2.03, the Company will
execute and deliver each definitive Global Security representing individual
Bearer Securities and each Bearer Security to the Trustee at its principal
office in London or such other place outside the United States specified
pursuant to Section 2.03.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Debt Securities represented
thereby pursuant to Section 2.07 or this Section 2.08, the temporary Global
Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount to be
exchanged and endorsed.
Section 2.09. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES. If
(a) any mutilated Debt Security or any mutilated Coupon with the Coupon
Security to which it appertains (and all unmatured Coupons attached thereto) is
surrendered to the Trustee at its corporate trust office (in the case of
Registered Securities) or at its principal London office (in the case of Bearer
Securities) or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debt Security or any
Coupon, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them and any paying agent
harmless, and neither the Company nor the Trustee receives notice that such
Debt Security or
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Coupon has been acquired by a bona fide purchaser, then the Company shall
execute and, upon a Company Order, the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Debt Security or in exchange for the Coupon Security to which such mutilated,
destroyed, lost or stolen Coupon appertained, a new Debt Security of the same
series of like tenor, form, terms and principal amount, bearing a number not
contemporaneously Outstanding, and, in the case of a Coupon Security, with such
Coupons attached thereto that neither gain nor loss in interest shall result
from such exchange or substitution. Upon the issuance of any substituted Debt
Security, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses connected therewith. In case any Debt Security or Coupon
which has matured or is about to mature or which has been called for redemption
shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substituted Debt Security or Coupon, pay or authorize the
payment of the same (without surrender thereof except in the case of a
mutilated Debt Security or Coupon) if the applicant for such payment shall
furnish the Company and the Trustee with such security or indemnity as either
may require to save it harmless from all risk, however remote, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debt Security or Coupon and
of the ownership thereof; provided, however, that payment of principal of, and
premium, if any, and interest on, Bearer Securities or Coupons shall, except as
otherwise provided in Section 2.12, be payable only at an office or agency
located outside the United States.
Every substituted Debt Security of any series, with its Coupons, if
any, issued pursuant to the provisions of this Section 2.09 by virtue of the
fact that any Debt Security or Coupon is destroyed, lost or stolen shall
constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debt Security or Coupon shall be
found at any time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debt Securities of that
series and Coupons, if any, duly issued hereunder. All Debt Securities and
Coupons, if any, shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debt Securities or Coupons, and shall
preclude any and all other rights or remedies, notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
Section 2.10. CANCELATION OF SURRENDERED DEBT SECURITIES. All Debt
Securities surrendered for payment, redemption, registration of transfer or
exchange and all Coupons surrendered for payment or exchange shall, if
surrendered to the Company or any paying agent or a Registrar, be delivered to
the Trustee for cancelation by it, or if surrendered to the Trustee, shall be
canceled by it, and no Debt Securities or Coupons shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture. All canceled Debt Securities and Coupons held by the Trustee shall
be destroyed (subject to the record retention requirements of the Exchange Act)
and certification of their destruction delivered to the Company, unless
otherwise directed. On request of the Company, the Trustee shall deliver to the
Company canceled Debt Securities and Coupons held by the Trustee. If the
Company shall acquire any of the Debt Securities or Coupons, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented thereby unless and until the same are delivered or
surrendered to the
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Trustee for cancelation. The Company may not issue new Debt Securities or
Coupons to replace Debt Securities or Coupons it has redeemed, paid or
delivered to the Trustee for cancelation.
Section 2.11. PROVISIONS OF THE INDENTURE AND DEBT SECURITIES FOR THE
SOLE BENEFIT OF THE PARTIES AND THE HOLDERS. Nothing in this Indenture or in
the Debt Securities or Coupons, expressed or implied, shall give or be
construed to give to any Person, other than the parties hereto, the Holders or
any Registrar or paying agent, any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or
provision herein contained; all its covenants, conditions and provisions being
for the sole benefit of the parties hereto, the Holders and any Registrar and
paying agents.
Section 2.12. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. (a)
Interest on any Registered Security that is payable and is punctually paid or
duly provided for on any interest payment date shall be paid to the Person in
whose name such Registered Security is registered at the close of business on
the regular record date for such interest notwithstanding the cancelation of
such Registered Security upon any transfer or exchange subsequent to the
regular record date. In case a Coupon Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any regular
record date and before the opening of business (at such office or agency) on
the next succeeding interest payment date, such Coupon Security shall be
surrendered without the Coupon relating to such interest payment date and
interest will not be payable on such interest payment date in respect of the
Registered Security issued in exchange for such Coupon Security, but will be
payable only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture. Payment of interest on Registered Securities
shall be made at the corporate trust office of the Trustee (except as otherwise
specified pursuant to Section 2.03), or at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Debt Security Register or, if provided pursuant to Section 2.03
and in accordance with arrangements satisfactory to the Trustee, at the option
of the Registered Holder by wire transfer to an account designated by the
Registered Holder.
(b) No interest shall be payable with respect to a Bearer
Security or Coupon unless such certification requirements as are specified
pursuant to Section 2.03(8)(z) are satisfied with respect to such Bearer
Security or Coupon. Interest on any Coupon Security that is payable and is
punctually paid or duly provided for on any interest payment date shall be paid
to the Holder of the Coupon that has matured on such interest payment date upon
surrender of such Coupon on such interest payment date at the principal London
office of the Trustee or at such other Place of Payment outside the United
States specified pursuant to Section 2.03.
Interest on any Bearer Security (other than a Coupon Security) that is
payable and is punctually paid or duly provided for on any interest payment
date shall be paid to the Holder of the Bearer Security upon presentation of
such Bearer Security and notation thereon on such interest payment date at the
principal London office of the Trustee or at such other Place of Payment
outside the United States specified pursuant to Section 2.03.
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Unless otherwise specified pursuant to Section 2.03, at the direction
of the Holder of any Bearer Security or Coupon payable in Dollars, and subject
to applicable laws and regulations, payments in respect of such Bearer Security
or Coupon will be made by check drawn on a bank in New York, New York, or, in
accordance with arrangements satisfactory to the Trustee, by wire transfer to a
Dollar account maintained by such Holder with a bank outside the United States.
If such payment at the offices of all paying agents outside the United States
becomes illegal or is effectively precluded because of the imposition of
exchange controls or similar restrictions on the full payment or receipt of
such amounts in Dollars, then, to the extent permitted by United States tax
law, the Company will appoint an office or agent in the United States at which
such payment may be made. Unless otherwise specified pursuant to Section 2.03,
at the direction of the Holder of any Bearer Security or Coupon payable in a
Foreign Currency, payment on such Bearer Security or Coupon will be made by a
check drawn on a bank outside the United States or, in accordance with
arrangements satisfactory to the Trustee, by wire transfer to an appropriate
account maintained by such Holder outside the United States. Except as provided
in this paragraph, no payment on any Bearer Security or Coupon will be made by
mail to an address in the United States or by transfer to an account in the
United States.
(c) Subject to the foregoing provisions of this Section 2.12
and Section 2.17, each Debt Security of a particular series delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu
of any other Debt Security of the same series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debt Security.
Section 2.13. SECURITIES DENOMINATED IN FOREIGN CURRENCIES. (a) Except
as otherwise specified pursuant to Section 2.03 for Bearer Securities of any
series, payment of the principal of, and premium, if any, and interest on,
Bearer Securities of such series denominated in any Currency will be made in
such Currency.
(b) Except as otherwise specified pursuant to Section 2.03
for Registered Securities of any series, payment of the principal of, and
premium, if any, and interest on, Registered Securities of such series will be
made in Dollars.
(c) For the purposes of calculating the principal amount of
Debt Securities of any series denominated in a Foreign Currency or in units of
two or more Foreign Currencies (including European Currency Units) for any
purpose under this Indenture, the principal amount of such Debt Securities at
any time Outstanding shall be deemed to be the Dollar Equivalent of such
principal amount as of the date of any such calculation.
In the event any Foreign Currency or currencies or units of two or
more Currencies in which any payment with respect to any series of Debt
Securities may be made ceases to be a freely convertible Currency on United
States Currency markets, for any date thereafter on which payment of principal
of, or premium, if any, or interest on, the Debt Securities of a series is due,
the Company shall select the Currency of payment for use on such date, all as
provided in the Debt Securities of such series. In such event, the Company
shall, as provided in the Debt Securities of such series, notify the Trustee of
the Currency which it has selected to constitute the funds necessary to meet
the Company's obligations on such payment date and of the amount of such
Currency to be paid. Such
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amount shall be determined as provided in the Debt Securities of such series.
The payment to the Trustee with respect to such payment date shall be made by
the Company solely in the Currency so selected.
Section 2.14. WIRE TRANSFERS. Notwithstanding any other provision to
the contrary in this Indenture, the Company may make any payment of monies
required to be deposited with the Trustee on account of principal of, or
premium, if any, or interest on, the Debt Securities (whether pursuant to
optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer in immediately available funds to an account designated by the
Trustee on or before the date such moneys are to be paid to the Holders of the
Debt Securities in accordance with the terms hereof.
Section 2.15. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Sections 2.01 and 2.03 that the
Debt Securities of a particular series are to be issued in whole or in part in
the form of one or more Global Securities, then the Company shall execute and
the Trustee or its agent shall, in accordance with Section 2.05, authenticate
and deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Debt Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
an Officer's Certificate, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or its nominee, (iii) shall
be delivered by the Trustee or its agent to the Depositary or pursuant to the
Depositary's instruction and (iv) shall bear a legend substantially to the
following effect: 'Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented hereby, this Global Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary', or such other legend as may then be
required by the Depositary for such Global Security or Securities.
(b) Notwithstanding any other provision of this Section 2.15
or of Section 2.07 to the contrary, and subject to the provisions of paragraph
(c) below, unless the terms of a Global Security expressly permit such Global
Security to be exchanged in whole or in part for definitive Debt Securities in
registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee
of the Depositary for such Global Security, or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary, or by the Depositary or
a nominee of the Depositary to a successor Depositary for such Global Security
selected or approved by the Company, or to a nominee of such successor
Depositary.
(c) (i) If at any time the Depositary for a Global Security
or Securities notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or Securities or if at
any time the Depositary for the Debt Securities for such series shall
no longer be eligible or in good standing under the Exchange Act or
other applicable statute, rule or regulation, the Company shall
appoint a successor Depositary with respect to such Global Security or
Securities. If a successor Depositary for such Global Security or
Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility,
the Company shall execute, and the Trustee
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or its agent, upon receipt of a Company Order for the authentication
and delivery of such individual Debt Securities of such series in
exchange for such Global Security, will authenticate and deliver,
individual Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global
Security or Securities.
(ii) The Company may at any time and in its sole
discretion determine that the Debt Securities of any series or portion
thereof issued or issuable in the form of one or more Global
Securities shall no longer be represented by such Global Security or
Securities. In such event the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
individual Debt Securities of such series in exchange in whole or in
part for such Global Security, will authenticate and deliver
individual Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the
principal amount of such series or portion thereof in exchange for
such Global Security or Securities.
(iii) If specified by the Company pursuant to
Sections 2.01 and 2.03 with respect to Debt Securities issued or
issuable in the form of a Global Security, the Depositary for such
Global Security may surrender such Global Security in exchange in
whole or in part for individual Debt Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to
the Company, the Trustee and such Depositary. Thereupon the Company
shall execute, and the Trustee or its agent upon receipt of a Company
Order for the authentication and delivery of definitive Debt
Securities of such series shall authenticate and deliver, without
service charge, (A) to each Person specified by such Depositary a new
Debt Security or Securities of the same series of like tenor and terms
and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and (B) to such Depositary
a new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Debt Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the
preceding three paragraphs, the Company will execute and the Trustee
or its agent will authenticate and deliver individual Debt Securities.
In case a Coupon Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at
an office or agency in a Place of Payment for such series) on any
special record date and before the opening of business (at such office
or agency) on the related proposed date of payment of Defaulted
Interest, such Coupon Security shall be surrendered without the Coupon
relating to such proposed date of payment and Defaulted Interest will
not be payable on such proposed date of payment in respect of the
Registered Security issued in exchange for such Coupon Security, but
will be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture. Upon the exchange of
the entire principal amount of a Global Security for individual Debt
Securities, such Global Security shall be canceled by the Trustee or
its agent. Except as provided in the preceding paragraph,
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Registered Securities issued in exchange for a Global Security
pursuant to this Section 2.15 shall be registered in such names and in
such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or the
Registrar. The Trustee or the Registrar shall deliver such Registered
Securities to the Persons in whose names such Registered Securities
are so registered.
(v) Payments in respect of the principal of and
interest on any Debt Securities registered in the name of the
Depositary or its nominee will be payable to the Depositary or such
nominee in its capacity as the registered owner of such Global
Security. The Company and the Trustee may treat the Person in whose
name the Debt Securities, including the Global Security, are
registered as the owner thereof for the purpose of receiving such
payments and for any and all other purposes whatsoever. None of the
Company, the Trustee, any Registrar, the paying agent or any agent of
the Company or the Trustee will have any responsibility or liability
for (A) any aspect of the records relating to or payments made on
account of the beneficial ownership interests of the Global Security
by the Depositary or its nominee or any of the Depositary's direct or
indirect participants, or for maintaining, supervising or reviewing
any records of the Depositary, its nominee or any of its direct or
indirect participants relating to the beneficial ownership interests
of the Global Security, (B) the payments to the beneficial owners of
the Global Security of amounts paid to the Depositary or its nominee,
or (C) any other matter relating to the actions and practices of the
Depositary, its nominee or any of its direct or indirect participants.
None of the Company, the Trustee or any such agent will be liable for
any delay by the Depositary, its nominee, or any of its direct or
indirect participants in identifying the beneficial owners of the Debt
Securities, and the Company and the Trustee may conclusively rely on,
and will be protected in relying on, instructions from the Depositary
or its nominee for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of
the Debt Securities to be issued).
The Trustee shall deliver individual Bearer Securities issued in
exchange for a Global Security pursuant to this Section 2.15 to the Persons and
in such authorized denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee; provided, however, that individual Bearer
Securities shall be delivered in exchange for a Global Security only in
accordance with the procedures as may be specified pursuant to Section 2.03.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to debt Securities in effect at the time of
such exchange.
Section 2.16. MEDIUM TERM SECURITIES. Notwithstanding any contrary
provision herein, if all Debt Securities of a series are not to be originally
issued at one time, it shall not be necessary for the Company to deliver to the
Trustee an Officers' Certificate, resolutions of the Board of Directors,
supplemental Indenture, Opinion of Counsel or written order or any other
document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or
prior to the time of
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authentication of each Debt Security of such series if such documents are
delivered to the Trustee or its agent at or prior to the authentication upon
original issuance of the first such Debt Security of such series to be issued;
provided, that any subsequent request by the Company to the Trustee to
authenticate Debt Securities of such series upon original issuance shall
constitute a representation and warranty by the Company that, as of the date of
such request, the statements made in the Officers' Certificate delivered
pursuant to Section 2.05 or 13.05 shall be true and correct as if made on such
date and that the Opinion of Counsel delivered at or prior to such time of
authentication of an original issuance of Debt Securities shall specifically
state that it shall relate to all subsequent issuances of Debt Securities of
such series that are identical to the Debt Securities issued in the first
issuance of Debt Securities of such series.
A Company Order delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph, may provide that Debt
Securities which are the subject thereof will be authenticated and delivered by
the Trustee or its agent on original issue from time to time upon the
telephonic or written order of Persons designated in such written order (any
such telephonic instructions to be promptly confirmed in writing by such
Person) and that such Persons are authorized to determine, consistent with the
Officers' Certificate, supplemental Indenture or resolution of the Board of
Directors relating to such written order, such terms and conditions of such
Debt Securities as are specified in such Officers' Certificate, supplemental
Indenture or such resolution.
Section 2.17. DEFAULTED INTEREST. (a) Any interest on any Debt
Security of a particular series which is payable, but is not punctually paid or
duly provided for, on the dates and in the manner provided in the Debt
Securities of such series and in this Indenture (herein called "Defaulted
Interest") shall, if such Debt Security is a Registered Security, forthwith
cease to be payable to the Registered Holder thereof on the relevant record
date by virtue of having been such Registered Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
(i) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities of such series are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each such Registered Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and
the special record
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date therefor to be mailed, first class postage pre-paid, to each
Holder thereof at its address as it appears in the Security Register,
not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record
date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Registered Securities of such
series are registered at the close of business on such special record
date. In case a Coupon Security of any such series is surrendered in
exchange for a Registered Security of such series after the close of
business (at an office or agency in a Place of Payment for such
series) on any special record date and before the opening of business
(at such office or agency) on the related proposed date of payment of
Defaulted Interest, such Coupon Security shall be surrendered without
the Coupon relating to such proposed date of payment and Defaulted
Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Coupon
Security, but will be payable only to the Holder of such Coupon when
due in accordance with the provisions of this Indenture.
(ii) The Company may make payment of any Defaulted
Interest on the Registered Securities of such series in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Registered Securities of such series may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
(b) Any Defaulted Interest payable in respect of Bearer
Securities of any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities of
such series, and notice of the payment date therefor shall be given by the
Trustee, in the name and at the expense of the Company, in the manner provided
in Section 13.03 not more than 25 days and not less than 20 days prior to the
date of the proposed payment.
Section 2.18. JUDGMENTS. The Company may provide pursuant to Section
2.03 for Debt Securities of any series that (a) the obligation, if any, of the
Company to pay the principal of, and premium, if any, and interest on, the Debt
Securities of any series in a Foreign Currency or Dollars (the "Designated
Currency") as may be specified pursuant to Section 2.03 is of the essence and
agrees that, to the fullest extent possible under applicable law, judgments in
respect of Debt Securities of such series shall be given in the Designated
Currency; (b) the obligation of the Company to make payments in the Designated
Currency of the principal of, and premium, if any, and interest on, such Debt
Securities shall, notwithstanding any payment in any other Currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the Designated Currency that the Holder receiving such payment may,
in accordance with normal banking procedures, purchase with the sum paid in
such other Currency (after any premium and cost of exchange) on the business
day in the country of issue of the Designated Currency or in the international
banking community (in the case of a composite currency) immediately following
the day on which such Holder receives such payment; (c) if the amount in the
Designated Currency that may be so purchased for any reason falls short of the
amount originally due, the Company shall pay such additional amounts as may be
necessary to compensate for such shortfall; and (d) any obligation
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of the Company not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to the Debt Securities of any series which are redeemable
before their Stated Maturity except as otherwise specified as contemplated by
Section 2.03 for Debt Securities of such series.
Section 3.02. TAX REDEMPTION; SPECIAL TAX REDEMPTION. (a) Unless
otherwise specified pursuant to Section 2.03, Bearer Securities of any series
may be redeemed at the option of the Company in whole, but not in part, at any
time, on giving not less than 30 or more than 60 days' notice in accordance
with Section 3.03 (which notice shall be irrevocable), at the redemption price
thereof (calculated without premium), if the Company has or will become
obligated to pay additional interest on such Bearer Securities pursuant to
Section 4.06 as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or any change in
the application or official interpretation of such laws, regulations or
rulings, which change or amendment becomes effective on or after the date on
which any Person (including any Person acting as underwriter, broker or dealer)
agrees to purchase any of such Bearer Securities pursuant to their original
issuance, and such obligation cannot be avoided by the Company taking
reasonable measures available to it; provided, that no such notice of
redemption shall be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay such additional interest were a
payment in respect of the Bearer Securities of that series then due. Prior to
the publication of any notice of redemption pursuant to this Section 3.02(a),
the Company shall deliver to the Trustee (i) an Officers' Certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (ii) an Opinion of Counsel to the effect
that the Company has or will become obligated to pay such additional interest
as a result of such change or amendment.
(b) Unless otherwise specified pursuant to Section 2.03, if
the Company shall determine that any payment made outside the United States by
the Company or any of its paying agents in respect of any Bearer Security or
Coupon would, under any present or future laws or regulations of the United
States, be subject to any certification, documentation, information or other
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any paying agent or any governmental authority of
the nationality, residence or identity of a beneficial owner of such Bearer
Security or Coupon that is a United States Alien (other than such a requirement
(i) that would not be applicable to a payment made by the Company or any one of
its paying agents (A) directly to the beneficial owner or (B) to a custodian,
nominee or other agent of the beneficial owner, or (ii) that can be satisfied
by such custodian, nominee or other agent certifying to the effect that the
beneficial owner is a United States Alien; provided, that, in any case referred
to in clause (i)(B) or (ii), payment by the custodian, nominee or agent to the
beneficial owner is not
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otherwise subject to any such requirement), then the Company shall elect either
(A) to redeem such Bearer Security or Coupon in whole, but not in part, at the
redemption price thereof (calculated without premium) or (B) if the conditions
of the next succeeding paragraph are satisfied, to pay the additional interest
specified in such paragraph. The Company shall make such determination as soon
as practicable and publish prompt notice thereof (the "Determination Notice"),
stating the effective date of such certification, documentation, information or
other reporting requirement, whether the Company elects to redeem the Bearer
Security or Coupon or to pay the additional interest specified in the next
succeeding paragraph and (if applicable) the last date by which the redemption
of the Bearer Security or Coupon must take place, as provided in the next
succeeding sentence. If any Bearer Security or Coupon is to be redeemed
pursuant to this paragraph, the redemption shall take place on such date, not
later than one year after the publication of the Determination Notice, as the
Company shall specify by notice given to the Trustee at least 60 days before
the redemption date. Notice of such redemption shall be given by the Company to
the Holders of the Bearer Security or Coupon not more than 60 days or less than
30 days prior to the redemption date. Notwithstanding the foregoing, the
Company shall not so redeem the Bearer Security or Coupon if the Company shall
subsequently determine, not less than 30 days prior to the redemption date,
that subsequent payments on the Bearer Security or Coupon would not be subject
to any such certification, documentation, information or other reporting
requirement, in which case the Company shall publish prompt notice of such
subsequent determination, and any earlier redemption notice given pursuant to
this paragraph shall be revoked and of no further effect. Prior to the
publication of any Determination Notice pursuant to this paragraph, the Company
shall deliver to the Trustee (1) an Officers' Certificate stating that the
Company is entitled to make such determination and setting forth a statement of
facts showing that the conditions precedent to the obligation of the Company to
redeem the Bearer Security or Coupon or to pay the additional interest
specified in the next succeeding paragraph have occurred and (2) an Opinion of
Counsel to the effect that such conditions have occurred.
If and so long as the certification, documentation, information or
other reporting requirement referred to in the preceding paragraph would be
fully satisfied by payment of a backup withholding tax or similar charge, the
Company may elect to pay as additional interest such amounts as may be
necessary so that every net payment made outside the United States following
the effective date of such requirement by the Company or any of its paying
agents in respect of any Bearer Security or Coupon of which the beneficial
owner is a United States Alien (but without any requirement that the
nationality, residence or identity of such beneficial owner be disclosed to the
Company, any paying agent or any governmental authority), after deduction or
withholding for or on account of such backup withholding tax or similar charge
that (x) would not be applicable in the circumstances referred to in the
parenthetical clause of the first sentence of the preceding paragraph or (y) is
imposed as a result of presentation of any such Bearer Security or Coupon for
payment more than 15 days after the date on which such payment became due and
payable or on which payment thereof was duly provided for, whichever occurred
later), will not be less than the amount provided in any such Bearer Security
or Coupon to be then due and payable. If the Company elects to pay additional
interest pursuant to this paragraph, the Company shall have the right to redeem
the Bearer Security or Coupon at any time in whole, but not in part, at the
redemption price thereof (calculated without premium), subject to the
provisions of the last three sentences of the immediately preceding paragraph.
If the Company elects to pay additional interest pursuant to this paragraph and
the condition specified in the first sentence of this paragraph should no
longer be satisfied, then the
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Company shall redeem the Bearer Security or Coupon in whole, but not in part,
at the redemption price thereof (calculated without premium), subject to the
provisions of the last three sentences of the immediately preceding paragraph.
Any redemption payments made by the Company pursuant to the two immediately
preceding sentences shall be subject to the continuing obligation of the
Company to pay additional interest pursuant to this paragraph. If the Company
elects to, or is required to, redeem the Bearer Security or Coupon pursuant to
this paragraph, it shall publish prompt notice thereof. If the Bearer Security
or Coupon is to be redeemed pursuant to this paragraph, the redemption shall
take place on such date, not later than one year after publication of the
notice of redemption, as the Company shall specify by notice to the Trustee at
least 60 days prior to the redemption date.
Section 3.03. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debt Securities of any series in accordance with
their terms, a resolution of the Board of Directors of the Company or a
supplemental Indenture, the Company shall fix a date for redemption and shall
give notice of such redemption at least 30 and not more than 60 days prior to
the date fixed for redemption to the Holders of Debt Securities of such series
so to be redeemed as a whole or in part, in the manner provided in Section
13.03. The notice if given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to
the Holder of any Debt Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debt Security of such series.
Each such notice of redemption shall specify the date fixed for
redemption, the redemption price at which Debt Securities of such series are to
be redeemed, the Place or Places of Payment that payment will be made upon
presentation and surrender of such Debt Securities, that any interest accrued
to the date fixed for redemption will be paid as specified in said notice, that
the redemption is for a sinking fund payment (if applicable), that, unless
otherwise specified in such notice, Coupon Securities of any series, if any,
surrendered for redemption must be accompanied by all Coupons maturing
subsequent to the date fixed for redemption, failing which the amount of any
such missing Coupon or Coupons will be deducted from the redemption price, if
the Bearer Securities of any series are to be redeemed and any Registered
Securities of such series are not to be redeemed, and if such Bearer Securities
may be exchanged for Registered Securities not subject to redemption on the
applicable redemption date pursuant to Section 2.15(c) or otherwise, the last
date on which such exchanges may be made, that, if the Company defaults in
making such redemption payment or if the Debt Securities of that series are
subordinated pursuant to the terms of Article XII, the paying agent is
prohibited from making such payment pursuant to the terms of this Indenture,
that on and after said date any interest thereon or on the portions thereof to
be redeemed will cease to accrue, that in the case of Original Issue Discount
Securities original issue discount accrued after the date fixed for redemption
will cease to accrue, the terms of the Debt Securities of that series pursuant
to which the Debt Securities of that series are being redeemed and that no
representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Debt Securities of that series.
If less than all the Debt Securities of a series are to be redeemed the notice
of redemption shall specify the CUSIP numbers of the Debt Securities of that
series to be redeemed. In case any Debt Security of a series is to be redeemed
in part only, the notice of redemption shall
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state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Debt Security, a new Debt Security or Debt Securities of that series in
principal amount equal to the unredeemed portion thereof, and in the case of a
Bearer Security with appropriate Coupons, if any, will be issued.
At least 60 days before the redemption date unless the Trustee
consents to a shorter period, the Company shall give notice to the Trustee of
the redemption date, the principal amount of Debt Securities to be redeemed and
the series and terms of the Debt Securities pursuant to which such redemption
will occur. Such notice shall be accompanied by an Officers' Certificate and an
Opinion of Counsel from the Company to the effect that such redemption will
comply with the conditions herein. If fewer than all the Debt Securities of a
series are to be redeemed, the record date relating to such redemption shall be
selected by the Company and given to the Trustee, which record date shall be
not less than 15 days after the date of notice to the Trustee.
On or prior to the redemption date for any Registered Securities, the
Company shall deposit with the Trustee or with a paying agent (or, if the
Company is acting as its own paying agent, segregate and hold in trust) an
amount of money in the Currency in which such Debt Securities are denominated
(except as provided pursuant to Section 2.03) sufficient to pay the redemption
price of such Registered Securities or any portions thereof that are to be
redeemed on that date. In the case of any redemption pertaining to Bearer
Securities or Coupon Securities, the Company shall, no later than the business
day prior to such redemption date, deposit with the Trustee or with a paying
agent (other than the Company) an amount of money in the Currency in which such
Debt Securities are denominated (except as provided pursuant to Section 2.03)
sufficient to pay the redemption price of such Bearer or Coupon Securities or
any portion thereof that are to be redeemed on the redemption date.
If less than all the Debt Securities of like tenor and terms of a
series are to be redeemed (other than pursuant to mandatory sinking fund
redemptions) the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Debt Securities of that series or
portions thereof (in multiples of $1,000) to be redeemed. In any case where
more than one Registered Security of such series is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Registered Security of such series.
The Trustee shall promptly notify the Company in writing of the Debt Securities
selected for redemption and, in the case of any Debt Securities selected for
partial redemption, the principal amount thereof to be redeemed. If any Debt
Security called for redemption shall not be so paid upon surrender thereof on
such redemption date, the principal, premium, if any, and interest shall bear
interest until paid from the redemption date at the rate borne by the Debt
Securities of that series. If less than all the Debt Securities of unlike tenor
and terms of a series are to be redeemed, the particular Debt Securities to be
redeemed shall be selected by the Company. Provisions of this Indenture that
apply to Debt Securities called for redemption also apply to portions of Debt
Securities called for redemption.
Section 3.04. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION. If
notice of redemption has been given as provided in Section 3.03, the Debt
Securities or portions of Debt Securities of the series with respect to which
such notice has been given shall become due and
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payable on the date and at the Place or Places of Payment stated in such notice
at the applicable redemption price, together with any interest accrued to the
date fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Debt Securities at the applicable redemption
price, together with any interest accrued to said date) any interest on the
Debt Securities or portions of Debt Securities of any series so called for
redemption shall cease to accrue, any original issue discount in the case of
Original Issue Discount Securities shall cease to accrue and any Coupons for
such interest appertaining to any Coupon Securities to be redeemed, except to
the extent described below, shall be void. On presentation and surrender of
such Debt Securities at the Place or Places of Payment in said notice
specified, the said Debt Securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with any interest accrued thereon to the date fixed for redemption.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
applicable redemption date, the redemption price for such Coupon Security may
be reduced by an amount equal to the face amount of all such missing Coupons.
If thereafter the Holder of such Coupon shall surrender to any paying agent
outside the United States any such missing Coupon in respect of which a
deduction shall have been made from the redemption price, such Holder shall be
entitled to receive the amount so deducted. The surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee, if there be
furnished to them such security or indemnity as they may require to save each
of them and any paying agent harmless.
Any Debt Security that is to be redeemed only in part shall be
surrendered at the corporate trust office or such other office or agency of the
Company as is specified pursuant to Section 2.03 (in the case of Registered
Securities) and at the principal London office of the Trustee or such other
office or agency of the Company outside the United States as is specified
pursuant to Section 2.03 (in the case of Bearer Securities) with, if the
Company, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company, the
Registrar and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing, and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Debt Security without
service charge, a new Debt Security or Debt Securities of the same series, of
like tenor and form, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Debt Security so surrendered, and, in the case
of a Coupon Security, with appropriate Coupons attached; except that if a
Global Security is so surrendered, the Company shall execute, and the Trustee
shall authenticate and deliver to the Depositary for such Global Security,
without service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Security so
surrendered. In the case of a Debt Security providing appropriate space for
such notation, at the option of the Holder thereof, the Trustee, in lieu of
delivering a new Debt Security or Debt Securities as aforesaid, may make a
notation on such Debt Security of the payment of the redeemed portion thereof.
Section 3.05. MANDATORY AND OPTIONAL SINKING FUNDS. The minimum amount
of any sinking fund payment provided for by the terms of Debt Securities of any
series, resolution of the Board of Directors or a supplemental Indenture is
herein referred to as a "mandatory sinking fund
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payment", and any payment in excess of such minimum amount provided for by the
terms of Debt Securities of any series, resolution of the Board of Directors or
a supplemental Indenture is herein referred to as an "optional sinking fund
payment".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Debt Securities of a series in cash, the Company
may at its option (a) deliver to the Trustee Debt Securities of that series
(together with the unmatured Coupons, if any, appertaining thereto) theretofore
purchased or otherwise acquired by the Company or (b) receive credit for the
principal amount of Debt Securities of that series which have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, resolution or
supplemental Indenture; provided, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the redemption price specified in such Debt
Securities, resolution or supplemental Indenture for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund
payment shall be reduced accordingly.
Section 3.06. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not less
than 60 days prior to each sinking fund payment date for any series of Debt
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, any resolution or supplemental Indenture,
the portion thereof, if any, which is to be satisfied by payment of cash in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) and the portion thereof, if any, which is to
be satisfied by delivering and crediting Debt Securities of that series
pursuant to this Section 3.06 (which Debt Securities, if not previously
redeemed, will accompany such certificate) and whether the Company intends to
exercise its right to make any permitted optional sinking fund payment with
respect to such series. Such certificate shall also state that no Event of
Default has occurred and is continuing with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. Failure of the Company
to deliver such certificate (or to deliver the Debt Securities and Coupons, if
any, specified in this paragraph) shall not constitute a Default, but such
failure shall require that the sinking fund payment due on the next succeeding
sinking fund payment date for that series shall be paid entirely in cash and
shall be sufficient to redeem the principal amount of such Debt Securities
subject to a mandatory sinking fund payment without the option to deliver or
credit Debt Securities as provided in this Section 3.06 and without the right
to make any optional sinking fund payment, if any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made in
cash which shall equal or exceed $100,000 (or a lesser sum if the Company shall
so request) with respect to the Debt Securities of any particular series shall
be applied by the Trustee on the sinking fund payment date on which such
payment is made (or, if such payment is made before a sinking fund payment
date, on the sinking fund payment date following the date of such payment) to
the redemption of such Debt Securities at the Redemption Price specified in
such Debt Securities, resolution or supplemental Indenture for
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operation of the sinking fund together with any accrued interest to the date
fixed for redemption. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Debt Securities shall be added to the next
cash sinking fund payment received by the Trustee for such series and, together
with such payment, shall be applied in accordance with the provisions of this
Section 3.06. Any and all sinking fund moneys with respect to the Debt
Securities of any particular series held by the Trustee on the last sinking
fund payment date with respect to Debt Securities of such series and not held
for the payment or redemption of particular Debt Securities shall be applied by
the Trustee, together with other moneys, if necessary, to be deposited
sufficient for the purpose, to the payment of the principal of the Debt
Securities of that series at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed upon such
sinking fund payment date in the manner specified in the last paragraph of
Section 3.03 and the Company shall cause notice of the redemption thereof to be
given in the manner provided in Section 3.03 except that the notice of
redemption shall also state that the Debt Securities are being redeemed by
operation of the sinking fund. Such notice having been duly given, the
redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 3.04.
At least one business day before each sinking fund payment date, the
Company shall pay to the Trustee (or, if the Company is acting as its own
paying agent, the Company shall segregate and hold in trust) in cash a sum in
the Currency in which the Debt Securities of such series are denominated
(except as provided pursuant to Section 2.03) equal to any interest accrued to
the date fixed for redemption of Debt Securities or portions thereof to be
redeemed on such sinking fund payment date pursuant to this Section 3.06.
The Trustee shall not redeem any Debt Securities of a series with
sinking fund moneys or mail any notice of redemption of such Debt Securities by
operation of the sinking fund for such series during the continuance of a
Default in payment of interest on such Debt Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph) with respect to such Debt Securities, except that if the notice of
redemption of any such Debt Securities shall theretofore have been mailed in
accordance with the provisions hereof, the Trustee shall redeem such Debt
Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such Default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such Default or
Event of Default, be held as security for the payment of such Debt Securities;
provided, however, that in case such Event of Default or Default shall have
been cured or waived as provided herein, such moneys shall thereafter be
applied on the next sinking fund payment date for such Debt Securities on which
such moneys may be applied pursuant to the provisions of this Section 3.06.
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ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. PAYMENT OF PRINCIPAL OF, AND PREMIUM, IF ANY, AND
INTEREST ON, DEBT SECURITIES. The Company, for the benefit of each series of
Debt Securities, will duly and punctually pay or cause to be paid the principal
of, and premium, if any, and interest on, each of the Debt Securities and pay
any Coupons at the place, at the respective times and in the manner provided
herein, in the Debt Securities and in the Coupons. Each installment of interest
on the Debt Securities may at the Company's option be paid by mailing checks
for such interest payable to the Person entitled thereto pursuant to Section
2.07(a) to the address of such Person as it appears on the Debt Security
Register. Any interest due on Coupon Securities on or before the Stated
Maturity of the related Debt Security, other than additional interest, if any,
payable as provided in Section 4.06 in respect of principal of, or premium, if
any, on such a Debt Security, shall be payable only upon presentation and
surrender of the several Coupons for such interest installments as are
evidenced thereby as they severally mature.
Principal, premium and interest of Debt Securities of any series shall
be considered paid on the date due if on such date the Trustee or any paying
agent holds in accordance with this Indenture money sufficient to pay in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) all principal, premium and interest then due
and, in the case of Debt Securities subordinated pursuant to the terms of
Article XII, the Trustee or such paying agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Debt Securities and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Section 4.02. MAINTENANCE OF OFFICES OR AGENCIES FOR REGISTRATION OF
TRANSFER, EXCHANGE AND PAYMENT OF DEBT SECURITIES. The Company will maintain in
each Place of Payment for any series of Debt Securities and Coupons, if any, an
office or agency where Debt Securities and Coupons of such series (but, except
as otherwise provided in Section 2.12, unless such Place of Payment is located
outside the United States, not Bearer Securities or Coupons) may be presented
or surrendered for payment, where Debt Securities of such series may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities and Coupons of such series and
this Indenture may be served. So long as any Bearer Securities of any series
remain outstanding, the Company will maintain for such purposes one or more
offices or agencies outside the United States in such city or cities specified
pursuant to Section 2.03 and, if any Bearer Securities are listed on a
securities exchange that requires an office or agency for the payment of
principal of, and premium, if any, or interest on, such Bearer Securities in a
location other than the location of an office or agency specified pursuant to
Section 2.03, the Company will maintain for such purposes an office or agency
in such location so long as any Bearer Securities are listed on such securities
exchange and such exchange so requires. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at
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any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
corporate trust office of the Trustee (in the case of Registered Securities)
and at the principal London office of the Trustee (in the case of Bearer
Securities), and the Company hereby appoints the Trustee as its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or
outside of such Place of Payment), and may from time to time rescind any such
designation; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
Section 4.03. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so
that there shall at all times be a Trustee hereunder with respect to each
series of Debt Securities.
Section 4.04. DUTIES OF PAYING AGENTS, ETC. (a) The Company shall
cause each paying agent, if any, other than the Trustee, to execute and deliver
to the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 4.04,
(i) that it will hold all sums held by it as such
agent for the payment of the principal of, and premium, if any, or
interest on, the Debt Securities of any series and the payment of any
related Coupons (whether such sums have been paid to it by the Company
or by any other obligor on the Debt Securities or Coupons of such
series) in trust for the benefit of the Holders of the Debt Securities
and Coupons of such series;
(ii) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the Debt Securities
or Coupons of such series) to make any payment of the principal of,
and premium, if any, or interest on, the Debt Securities of such
series or any payment on any related Coupons when the same shall be
due and payable; and
(iii) that it will at any time during the
continuance of an Event of Default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held by it as such
agent.
(b) If the Company shall act as its own paying agent, it
will, on or before each due date of the principal of, and premium, if any, or
interest on, the Debt Securities and Coupons, if any, of any series, set aside,
segregate and hold in trust for the benefit of the Holders of the Debt
Securities and Coupons of such series a sum sufficient to pay such principal,
premium, if any, or interest so becoming due. The Company will promptly notify
the Trustee of any failure by the Company to take such action or the failure by
any other obligor on such Debt Securities or Coupons
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to make any payment of the principal of, and premium, if any, or interest on,
such Debt Securities or Coupons when the same shall be due and payable.
(c) Anything in this Section 4.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it or any paying
agent, as required by this Section 4.04, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such paying agent.
(d) Whenever the Company shall have one or more paying agents
with respect to any series of Debt Securities and Coupons, it will, prior to
each due date of the principal of, and premium, if any, or interest on, any
Debt Securities of such series, deposit with any such paying agent a sum
sufficient to pay the principal, premium or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled thereto, and
(unless any such paying agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
(e) Anything in this Section 4.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this
Section 4.04 is subject to the provisions of Section 11.05.
Section 4.05. STATEMENT BY OFFICERS AS TO DEFAULT. The Company will
deliver to the Trustee, on or before a date not more than four months after the
end of each fiscal year of the Company (currently on a calendar year basis)
ending after the date hereof, an Officers' Certificate stating, as to each
officer signing such certificate, that (a) in the course of his performance of
his duties as an officer of the Company he would normally have knowledge of any
Default, (b) whether or not to the best of his knowledge any Default occurred
during such year and (c) if to the best of his knowledge the Company is in
Default, specifying all such Defaults and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the Trust Indenture Act.
Section 4.06. PAYMENT OF ADDITIONAL INTEREST. Unless otherwise
provided pursuant to Section 2.03, the provisions of this Section 4.06 shall be
applicable to Bearer Securities of any series.
The Company will, subject to the exceptions and limitations set forth
below, pay as additional interest to the Holder of any Bearer Security or
Coupon that is a United States Alien such amounts as may be necessary so that
every net payment on such Bearer Security or Coupon, after deduction or
withholding for or on account of any present or future tax, assessment or other
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided in such Bearer Security or Coupon to
be then due and payable. However, the Company will not be required to make any
such payment of additional interest for or on account of:
(a) any tax, assessment or other governmental charge that
would not have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor or beneficiary
of, or a Person holding a power over, such Holder, if such Holder is an estate
or a trust, or a member or shareholder of such Holder, if such Holder is a
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partnership or corporation) and the United States, including such Holder (or
such fiduciary, settlor, beneficiary, Person holding a power, member or
shareholder) being or having been a citizen or resident thereof or being or
having been engaged in trade or business or present therein or having or having
had a permanent establishment therein or (ii) such Holder's past or present
status for United States Federal income tax purposes as a personal holding
company, foreign personal holding company or private foundation or other
tax-exempt organization with respect to the United States or as a corporation
that accumulates earnings to avoid United States Federal income tax;
(b) any estate, inheritance, gift, sales, transfer or
personal property tax or any similar tax, assessment or other governmental
charge;
(c) any tax, assessment or other governmental charge that
would not have been imposed but for the presentation by the Holder of a Bearer
Security or Coupon for payment more than 15 days after the date on which such
payment became due and payable or on which payment thereof was duly provided
for, whichever occurs later;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by deduction or withholding from a payment on a Bearer
Security or Coupon;
(e) any tax, assessment or other governmental charge that
would not have been imposed but for a failure to comply with applicable
certification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the United
States of the Holder or beneficial owner of a Bearer Security or Coupon if,
without regard to any tax treaty, such compliance is required by statute or
regulation of the United States as a precondition to relief or exemption from
such tax, assessment or other governmental charge; or
(f) any tax, assessment or other governmental charge imposed
on a Holder that actually or constructively owns ten percent or more of the
combined voting power of all classes of stock of the Company or that is a
controlled foreign corporation related to the Company through stock ownership;
nor shall additional interest be paid with respect to a payment on a Bearer
Security or Coupon to a Holder that is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner would not have been entitled to the additional interest had
such beneficiary, settlor, member or beneficial owner been the Holder of such
Bearer Security or Coupon.
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, or premium, if any, or interest on, any Debt
Security or payment with respect to any Coupon of any series, such mention
shall be deemed to include mention of the payment of additional interest
provided for in the terms of such Debt Securities and this Section 4.06 to the
extent that, in such context, additional interest is, was or would be payable
in respect thereof pursuant to the provisions of this Section 4.06 and express
mention of the payment of additional interest (if applicable) in any provisions
hereof shall not be construed as excluding additional interest in those
provisions hereof where such express mention is not made.
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If the payment of additional interest becomes required in respect of
the Debt Securities or Coupons of a series, at least ten days prior to the
first interest payment date with respect to which such additional interest will
be payable (or if the Debt Securities of that series will not bear interest
prior to its Stated Maturity, the first day on which a payment of principal,
and premium, if any, is made and on which such additional interest will be
payable), and at least ten days prior to each date of payment of principal, and
premium, if any, or interest if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Company
will furnish the Trustee and each paying agent with an Officers' Certificate
that shall specify by country the amount, if any, required to be withheld on
such payments to Holders of Debt Securities or Coupons that are United States
Aliens, and the Company will pay to the Trustee or such paying agent the
additional interest, if any, required by the terms of such Debt Securities and
this Section 4.06. The Company covenants to indemnify the Trustee and any
paying agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section 4.06.
Section 4.07. FURTHER INSTRUMENTS AND ACTS. The Company will, upon
request of the Trustee, execute and deliver such further instruments and do
such further acts as may reasonably be necessary or proper to carry out more
effectually the purposes of this Indenture.
Section 4.08. EXISTENCE. Subject to Article X, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 4.09. MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
Section 4.10. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or
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discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
Section 4.11. LIMITATION ON LIENS. The Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create or permit
to exist any Lien on any Principal Property, whether owned on the Issue Date
or thereafter acquired, securing any obligation unless the Company
contemporaneously secures the Debt Securities equally and ratably with (or
prior to) such obligation. The preceding sentence shall not require the Company
to secure the Debt Securities if the Lien consists of the following:
(a) Permitted Liens; or
(b) Liens securing Indebtedness if, after giving pro forma
effect to the Incurrence of such Indebtedness (and the receipt and application
of the proceeds thereof) or the securing of outstanding Indebtedness, the sum
of (without duplication) (i) all Indebtedness of the Company and its
Subsidiaries secured by Liens on Principal Property (other than Permitted
Liens) and (ii) all Attributable Indebtedness in respect of Sale and Leaseback
Transactions with respect to any Principal Property, at the time of
determination does not exceed 15% of Adjusted Consolidated Net Tangible Assets.
Section 4.12. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The
Company shall not, and shall not permit any of its Subsidiaries to, enter into
any Sale and Leaseback Transaction with respect to any Principal Property unless
(a) the Company or such Subsidiary would be entitled to create a Lien on such
Principal Property securing Indebtedness in an amount equal to the Attributable
Indebtedness with respect to such Sale and Leaseback Transaction without
securing the Debt Securities pursuant to Section 4.11 or (b) the Company, within
six months from the effective date of such Sale and Leaseback Transaction,
applies to the voluntary defeasance or retirement of Debt Securities or other
Indebtedness an amount equal to the Attributable Indebtedness in respect of such
Sale and Leaseback Transaction.
ARTICLE V
HOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF HOLDERS; PRESERVATION OF INFORMATION. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee with
respect to the Registered Securities of each series:
(a) not more than 15 days after each record date with respect
to the payment of interest, if any, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Registered Holders as of
such record date, and
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(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and contents as of a date not more than 15 days prior to
the time such list is furnished;
provided, however, that so long as the Trustee shall be the Registrar, such
lists shall not be required to be furnished.
The Company shall also be required to furnish to the Trustee at all
such times set forth above all information in the possession or control of the
Company or any of its paying agents other than the Trustee as to the names and
addresses of the Bearer Holders of all series; provided, however, that the
Company shall have no obligation to investigate any matter relating to any
Bearer Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders (i)
contained in the most recent list furnished to it as provided in this Section
5.01 or (ii) received by it in the capacity of paying agent or Registrar (if so
acting) hereunder.
The Trustee may destroy any list furnished to it as provided in this
Section 5.01 upon receipt of a new list so furnished.
Section 5.02. COMMUNICATIONS TO HOLDERS. Holders may communicate
pursuant to Section 312(b) of the Trust Indenture Act with other Holders with
respect to their rights under this Indenture or the Debt Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of Section 312(c) of the Trust Indenture Act.
Section 5.03. REPORTS BY COMPANY. (a) The Company covenants and
agrees, and any obligor hereunder shall covenant and agree, to file with the
Trustee and the Holders (in the manner and to the extent provided in Section
5.04), within 15 days after the Company or such obligor, as the case may be, is
required to file the same with the Securities and Exchange Commission, copies
of the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as said Commission may from
time to time by rules and regulations prescribe) which the Company or such
obligor, as the case may be, may be required to file with said Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
or such obligor, as the case may be, is not required to file information,
documents or reports pursuant to either of such Sections, then to file with the
Trustee, the Holders (in the manner and to the extent provided in Section 5.04)
and said Commission, in accordance with rules and regulations prescribed from
time to time by said Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees, and any obligor
hereunder shall covenant and agree, to file with the Trustee, the Holders (in
the manner and to the extent provided in Section 5.04) and the Securities and
Exchange Commission, in accordance with the rules and regulations prescribed
from time to time by said Commission, such additional information,
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documents, and reports with respect to compliance by the Company or such
obligor, as the case may be, with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules and
regulations.
Section 5.04. REPORTS BY TRUSTEE. As promptly as practicable after
each January 1 beginning with the January 1 following the date of this
Indenture, and in any event prior to February 15 in each year, the Trustee
shall mail to each Holder a brief report dated as of that complies with Section
313(a) of the Trust Indenture Act. The Trustee also shall comply with Section
313(b) of the Trust Indenture Act.
Reports pursuant to this Section 5.04 shall be transmitted by mail:
(a) to all Registered Holders, as the names and addresses of
such Holders appear in the Debt Security Register;
(b) to such Bearer Holders of any series as have, within two
years preceding such transmission, filed their names and addresses with the
Trustee for such series for that purpose; and
(c) except in the cases of reports under Section 313(b)(2) of
the Trust Indenture Act, to each Holder of a Debt Security of any series whose
name and address appear in the information preserved at the time by the Trustee
in accordance with Section 5.02.
A copy of each report at the time of its mailing to Holders shall be
filed with the Securities and Exchange Commission and each stock exchange (if
any) on which the Debt Securities of any series are listed. The Company agrees
to notify promptly the Trustee whenever the Debt Securities of any series
become listed on any stock exchange and of any delisting thereof.
Section 5.05. RECORD DATES FOR ACTION BY HOLDERS. If the Company shall
solicit from the holders of Debt Securities of any series any action (including
the making of any demand or request, the giving of any direction, notice,
consent or waiver or the taking of any other action), the Company may, at its
option, by resolution of the Board of Directors, fix in advance a record date
for the determination of Holders of Debt Securities entitled to take such
action, but the Company shall have no obligation to do so. Any such record date
shall be fixed at the Company's discretion. If such a record date is fixed,
such action may be sought or given before or after the record date, but only
the Holders of Debt Securities of record at the close of business on such
record date shall be deemed to be Holders of Debt Securities for the purpose of
determining whether Holders of the requisite proportion of Debt Securities of
such series Outstanding have authorized or agreed or consented to such action,
and for that purpose the Debt Securities of such series Outstanding shall be
computed as of such record date.
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ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01. EVENTS OF DEFAULT. If any one or more of the following
shall have occurred and be continuing with respect to Debt Securities of any
series (each of the following, an "Event of Default"):
(a) default in the payment of any installment of interest
upon any Debt Securities of that series or any payment with respect to the
related Coupons, if any, as and when the same shall become due and payable,
whether or not such payment shall be prohibited by Article XII, if applicable,
and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if
any, on any Debt Securities of that series as and when the same shall become
due and payable, whether at maturity, upon redemption, by declaration, upon
required repurchase or otherwise, whether or not such payment shall be
prohibited by Article XII, if applicable; or
(c) default in the payment of any sinking fund payment with
respect to any Debt Securities of that series as and when the same shall become
due and payable; or
(d) failure on the part of the Company to comply with Article
X; or
(e) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Debt Securities of that series, in any resolution of the Board of Directors
authorizing the issuance of that series of Debt Securities, in this Indenture
with respect to such series or in any supplemental Indenture with respect to
such series (other than a covenant a default in the performance of which is
elsewhere in this Section specifically dealt with), continuing for a period of
60 days after the date on which written notice specifying such failure and
requiring the Company to remedy the same shall have been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Debt Securities of that series at the time Outstanding; or
(f) Indebtedness of the Company or any Subsidiary of the
Company is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof because of a default, the total amount of
such Indebtedness unpaid or accelerated exceeds $20,000,000 or its Dollar
Equivalent at the time and such default remains uncured or such acceleration is
not rescinded for 10 days after the date on which written notice specifying
such failure and requiring the Company to remedy the same shall have been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Debt Securities of that series at the time Outstanding; or
(g) the Company or any of its Significant Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code
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or any other Federal or State bankruptcy, insolvency or similar law, (ii)
consent to the institution of, or fail to controvert within the time and in the
manner prescribed by law, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for the Company or any such
Significant Subsidiary or for a substantial part of its property, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) admit in writing its inability or fail generally to pay its debts as they
become due, (vii) take corporate action for the purpose of effecting any of the
foregoing, or (viii) take any comparable action under any foreign laws relating
to insolvency; or
(h) the entry of an order or decree by a court having
competent jurisdiction in the premises for (i) relief in respect of the Company
or any of its Significant Subsidiaries or a substantial part of any of their
property under Title 11 of the United States Code or any other Federal or State
bankruptcy, insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any
such Significant Subsidiary or for a substantial part of any of their property
(except any decree or order appointing such official of any Significant
Subsidiary pursuant to a plan under which the assets and operations of such
Significant Subsidiary are transferred to or combined with another Subsidiary
or Subsidiaries of the Company or to the Company) or (iii) the winding-up or
liquidation of the Company or any such Significant Subsidiary (except any
decree or order approving or ordering the winding up or liquidation of the
affairs of a Significant Subsidiary pursuant to a plan under which the assets
and operations of such Significant Subsidiary are transferred to or combined
with another Subsidiary or Subsidiaries of the Company or to the Company); and
such order or decree shall continue unstayed and in effect for 60 consecutive
days; or any similar relief is granted under any foreign laws and the order or
decree stays in effect for 60 consecutive days; or
(i) any judgment or decree for the payment of money in excess
of $20,000,000 or its Dollar Equivalent at the time is entered against the
Company or any Subsidiary of the Company by a court or courts of competent
jurisdiction, which judgment is not covered by insurance, and is not discharged
and either (i) an enforcement proceeding has been commenced by any creditor
upon such judgment or decree or (ii) there is a period of 60 days following the
entry of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed and, in the case of (i) or
(ii), such default continues for 10 days after the date on which written notice
specifying such failure and requiring the Company to remedy the same shall have
been given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Debt Securities of that series at the time Outstanding;
or
(j) any other Event of Default provided with respect to Debt
Securities of that series;
then and in each and every case that an Event of Default described in clause
(a), (b), (c), (d), (e), (f), (i) or (j) with respect to Debt Securities of
that series at the time Outstanding occurs and is continuing, unless the
principal of and interest on all the Debt Securities of that series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate
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principal amount of the Debt Securities of that series then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
Holders), may declare the principal of (or, if the Debt Securities of that
series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of that series) and interest
on all the Debt Securities of that series to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Debt Securities or
Coupons appertaining thereto of that series contained to the contrary
notwithstanding. If an Event of Default described in clause (g) or (h) occurs,
then and in each and every such case, unless the principal of and interest on
all the Debt Securities shall have become due and payable, the principal of
(or, if any Debt Securities are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms thereto) and
interest on all the Debt Securities then Outstanding hereunder shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders, anything in this Indenture or in the
Debt Securities contained to the contrary notwithstanding.
The Holders of a majority in principal amount of the Debt Securities
of a particular series by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree already rendered and if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of acceleration. Upon any such rescission, the parties hereto shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the parties hereto shall continue as though no
such proceeding had been taken.
In case the Trustee or any Holder shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee or such Holder, then and in
every such case the parties hereto shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of
the parties hereto shall continue as though no such proceeding had been taken.
The foregoing Events of Default shall constitute Events of Default
whatever the reason for any such Event of Default and whether it is voluntary
or involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (c), (d), (e), (f), (i) or (j), its status and
what action the Company is taking or proposes to take with respect thereto.
Section 6.02. COLLECTION OF INDEBTEDNESS BY TRUSTEE, ETC. If an Event
of Default occurs and is continuing, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid or enforce the performance of any provision of the Debt Securities
of the affected series or this Indenture, and may prosecute any such action or
proceedings to judgment or
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final decree, and may enforce any such judgment or final decree against the
Company or any other obligor upon the Debt Securities, and the Coupons, if any,
appertaining thereto, of such series (and collect in the manner provided by law
out of the property of the Company or any other obligor upon the Debt
Securities and Coupons of such series wherever situated the moneys adjudged or
decreed to be payable).
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor upon the Debt Securities
and Coupons, if any, of any series under Title 11 of the United States Code or
any other Federal or State bankruptcy, insolvency or similar law, or in case a
receiver, trustee or other similar official shall have been appointed for its
property, or in case of any other similar judicial proceedings relative to the
Company or any other obligor upon the Debt Securities of any series, its
creditors or its property, the Trustee, irrespective of whether the principal
of Debt Securities and Coupons, if any, of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 6.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest (or, if the Debt Securities
of such series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and
unpaid in respect of the Debt Securities and Coupons of such series, and to
file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities Incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith) and of the
Holders thereof allowed in any such judicial proceedings relative to the
Company, or any other obligor upon the Debt Securities and Coupons of such
series, its creditors or its property, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of such Holders and of the Trustee
on their behalf, and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of such Holders to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to such Holders, to pay to the Trustee such amount as shall
be sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other reasonable expenses and liabilities
Incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith.
All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities and the Coupons, if any, appertaining thereto,
of any series, may be enforced by the Trustee without the possession of any
such Debt Securities or Coupons, or the production thereof in any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment (except for any amounts payable to
the Trustee pursuant to Section 7.06) shall be for the ratable benefit of the
Holders of all the Debt Securities or Coupons in respect of which such action
was taken.
In case of an Event of Default hereunder the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the
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Trustee shall deem most effectual to protect and enforce any of such rights,
either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture
or in aid of the exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this Indenture or
by law.
Section 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
or other property collected by the Trustee pursuant to Section 6.02 with
respect to Debt Securities and Coupons, if any, of any series shall be applied,
after giving effect to the provisions of Article XII, if applicable, in the
order following, at the date or dates fixed by the Trustee for the distribution
of such moneys or other property, upon presentation of the several Debt
Securities or Coupons of such series in respect of which moneys or other
property have been collected, and the notation thereon of the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant
to Section 7.06;
SECOND: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall not have
become due, to the payment of interest on the Debt Securities or Coupons of
such series in the order of the maturity of the installments of such interest,
with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the rate or Yield to
Maturity (in the case of Original Issue Discount Debt Securities) borne by the
Debt Securities or Coupons of such series, such payments to be made ratably to
the Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall have
become due, by declaration or otherwise, to the payment of the whole amount
then owing and unpaid upon the Debt Securities or Coupons of such series for
principal and premium, if any, and interest, with interest on the overdue
principal and premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the rate or
Yield to Maturity (in the case of Original Issue Discount Debt Securities)
borne by the Debt Securities or Coupons of such series; and, in case such
moneys shall be insufficient to pay in full the whole amount so due and unpaid
upon the Debt Securities and Coupons of such series, then to the payment of
such principal and premium, if any, and interest, without preference or
priority of principal and premium, if any, over interest, or of interest over
principal and premium, if any, or of any installment of interest over any other
installment of interest, or of any Debt Security or Coupon of such series over
any Debt Security or Coupon of such series, ratably to the aggregate of such
principal and premium, if any, and interest; and
FOURTH: The remainder, if any, shall be paid to the Company,
its successors or assigns, or to whomsoever may be lawfully entitled to receive
the same, or as a court of competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.03. At least 15 days before such record
date, the Company shall mail to each Holder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
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Section 6.04. LIMITATION ON SUITS BY HOLDERS. No Holder of any Debt
Security or Coupon of any series shall have any right by virtue or by availing
of any provision of this Indenture to institute any action or proceeding at law
or in equity or in bankruptcy or otherwise, upon or under or with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of an Event of Default with respect to Debt Securities
of that same series and of the continuance thereof and unless the Holders of
not less than 25% in aggregate principal amount of the Outstanding Debt
Securities of that series shall have made written request upon the Trustee to
institute such action or proceedings in respect of such Event of Default in its
own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be Incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.06; it being understood and intended, and being expressly
covenanted by the Holder of every Debt Security or Coupon with every other
Holder and the Trustee, that no one or more Holders shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any Holders, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all such Holders. For the protection and
enforcement of the provisions of this Section 6.04, each and every Holder and
the Trustee shall be entitled to such relief as can be given either at law or
in equity.
Notwithstanding any other provision in this Indenture, however, the
right of any Holder of any Debt Security or Coupon to receive payment of the
principal of, and premium, if any, and (subject to Section 2.12) interest on,
such Debt Security or Coupon, on or after the respective due dates expressed in
such Debt Security, and to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 6.05. REMEDIES CUMULATIVE; DELAY OR OMISSION IN EXERCISE OF
RIGHTS NOT A WAIVER OF DEFAULT. All powers and remedies given by this Article
VI to the Trustee or to the Holders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the Holders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Holder to exercise any right or power accruing upon any Default
occurring and continuing as aforesaid, shall impair any such right or power, or
shall be construed to be a waiver of any such Default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article VI or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders.
Section 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF
DEBT SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULT. The Holders of a
majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding shall have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee, or
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exercising any trust or power conferred on the Trustee, with respect to the
Debt Securities of such series; provided, however, that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture, and that subject to the provisions of Section 7.01, the Trustee
shall have the right to decline to follow any such direction if the Trustee
being advised by counsel shall determine that the action so directed may not
lawfully be taken, or if the Trustee shall by a responsible officer or officers
determine that the action so directed would involve it in personal liability or
would be unjustly prejudicial to Holders of Debt Securities of such series not
taking part in such direction; and provided, further, however, that nothing in
this Indenture contained shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by such Holders. Prior to the acceleration of the maturity of the
Debt Securities of any series, as provided in Section 6.01, the Holders of a
majority in aggregate principal amount of the Debt Securities of that series at
the time Outstanding may on behalf of the Holders of all the Debt Securities
and any related Coupons of that series waive any past Default or Event of
Default and its consequences for that series specified in the terms thereof as
contemplated by Section 2.03, except (a) a Default in the payment of the
principal of, and premium, if any, or interest on, any of the Debt Securities
or in the payment of any related Coupon and (b) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder affected thereby. In case of any such waiver, such Default shall cease
to exist, any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, and the Company, the Trustee and the
Holders of the Debt Securities of that series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD SUCH NOTICE IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90
days after the occurrence of a Default known to it with respect to a series of
Debt Securities or Coupons, if any, give to the Holders thereof, in the manner
provided in Section 13.03, notice of all Defaults with respect to such series
known to the Trustee, unless such Defaults shall have been cured or waived
before the giving of such notice; provided, that, except in the case of Default
in the payment of the principal of, or premium, if any, or interest on, any of
the Debt Securities or Coupons of such series or in the making of any sinking
fund payment with respect to the Debt Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a committee of directors or responsible
officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders thereof.
Section 6.08. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN
SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this Indenture
agree, and each Holder of any Debt Security or Coupon by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit in the manner and to the extent provided in the Trust
Indenture Act, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 6.08 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Holder,
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or group of Holders, holding in the aggregate more than ten percent in
principal amount of the Outstanding Debt Securities of that series or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, or premium, if any, or interest on, any Debt Security or Coupon
on or after the due date for such payment expressed in such Debt Security or
Coupon.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. The Trustee, prior
to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case
an Event of Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that:
(a) this subsection shall not be construed to limit the effect
of the first paragraph of this Section 7.01;
(b) prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after the curing or waiving of
all Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with
respect to Debt Securities and Coupons, if any, of any series shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties
and obligations with respect to such series as are specifically set
forth in this Indenture, and no implied covenants or obligations with
respect to such series shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture; but the Trustee
shall examine the evidence furnished to it pursuant to Section 5.03 to
determine whether or not such evidence conforms to the requirement of
this Indenture;
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(iii) the Trustee shall not be liable for an error
of judgment made in good faith by a responsible officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iv) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it with respect to Debt
Securities of any series in good faith in accordance with the
direction of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Debt Securities of that series
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to
Debt Securities of such series.
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any Personal financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided
in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Company Order (unless
other evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel, and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of Debt Securities or Coupons of any series
pursuant to the provisions of this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be Incurred therein or thereby;
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(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, approval or other paper or document, unless
requested in writing to do so by the Holders of a majority in aggregate
principal amount of the then Outstanding Debt Securities of a series affected
by such matter; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be Incurred by
it in the making of such investigation is not, in the opinion of the Trustee,
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so proceeding. The reasonable
expense of every such investigation shall be paid by the Company or, if paid by
the Trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed by it with due
care hereunder; and
(h) if any property other than cash shall at any time be
subject to a Lien in favor of the Holders, the Trustee, if and to the extent
authorized by a receivership or bankruptcy court of competent jurisdiction or
by the supplemental instrument subjecting such property to such lien, shall be
entitled to make advances for the purpose of preserving such property or of
discharging tax Liens or other prior Liens or encumbrances thereon.
Section 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN DEBT
SECURITIES. The recitals contained herein, in the Debt Securities (except the
Trustee's certificate of authentication) and in any Coupons shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities or Coupons,
if any, of any series, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Debt
Securities and perform its obligations hereunder, and that the statements made
by it or to be made by it in a Statement of Eligibility and Qualification on
Form T-1 supplied to the Company are true and accurate. The Trustee shall not
be accountable for the use or application by the Company of any of the Debt
Securities or of the proceeds thereof.
Section 7.04. TRUSTEE, PAYING AGENT OR REGISTRAR MAY OWN DEBT
SECURITIES. The Trustee or any paying agent or Registrar, in its individual or
any other capacity, may become the owner or pledgee of Debt Securities or
Coupons and subject to the provisions of the Trust Indenture Act relating to
conflicts of interest and preferential claims may otherwise deal with the
Company with the same rights it would have if it were not Trustee, paying agent
or Registrar.
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Section 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST. Subject
to the provisions of Section 11.05, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for
interest on any moneys received by it hereunder. So long as no Event of Default
shall have occurred and be continuing, all interest allowed on any such moneys
shall be paid from time to time to the Company upon a Company Order.
Section 7.06. COMPENSATION AND REIMBURSEMENT. The Company covenants
and agrees to pay in Dollars to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and, except as otherwise
expressly provided herein, the Company will pay or reimburse in Dollars the
Trustee upon its request for all reasonable expenses, disbursements and
advances Incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents, attorneys and counsel and of all
Persons not regularly in its employ) except any such expense, disbursement or
advances as may arise from its negligence or bad faith. The Company also
covenants to indemnify in Dollars the Trustee for, and to hold it harmless
against, any loss, liability or expense Incurred without negligence, wilful
misconduct or bad faith on the part of the Trustee, arising out of or in
connection with the acceptance or administration of this trust or trusts
hereunder, including the reasonable costs and expenses of defending itself
against any claim of liability in connection with the exercise or performance
of any of its powers or duties hereunder. The obligations of the Company under
this Section 7.06 to compensate and indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. The Company and the Holders agree that such
additional indebtedness shall be secured by a Lien prior to that of the Debt
Securities and Coupons, if any, upon all property and funds held or collected
by the Trustee, as such, except funds held in trust for the payment of
principal of, and premium, if any, or interest on, particular Debt Securities
and Coupons.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency, reorganization or other
similar law.
Section 7.07. RIGHT OF TRUSTEE TO RELY ON AN OFFICERS' CERTIFICATE
WHERE NO OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided
in Section 7.01, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under
the provisions of this Indenture upon the faith thereof.
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Section 7.08. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE. The Company
may, but need not, appoint a separate Trustee for any one or more series of
Debt Securities. The Trustee may resign with respect to one or more or all
series of Debt Securities at any time by giving notice to the Company. The
Holders of a majority in principal amount of the Debt Securities of a
particular series may remove the Trustee for such series and only such series
by so notifying the Trustee and may appoint a successor Trustee. The Company
shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Debt Securities of a particular series
and such Holders do not reasonably promptly appoint a successor Trustee, or if
a vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee. No resignation or removal of the Trustee
and no appointment of a successor Trustee shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Debt Securities of each applicable series. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the Lien provided for in Section 7.06.
If a successor Trustee does not take office within 60 days after the
retiring Trustee gives notice of resignation or is removed, the retiring
Trustee or the Holders of 25% in principal amount of the Debt Securities of any
applicable series may petition any court of competent jurisdiction for the
appointment of a successor Trustee for the Debt Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of Debt
Securities of any applicable series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee for the Debt Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.06 shall continue for
the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or successor
trustee with respect to the Debt Securities of one or more series, the Company,
any retiring Trustee and each successor or
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separate Trustee with respect to the Debt Securities of any applicable series
shall execute and deliver an Indenture supplemental hereto (i) which shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of any retiring Trustee with
respect to the Debt Securities of any series as to which any such retiring
Trustee is not retiring shall continue to be vested in such retiring Trustee
and (ii) that shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, it being understood that nothing
herein or in such supplemental Indenture shall constitute such Trustees
co-trustees of the same trust and that each such separate, retiring or
successor Trustee shall be Trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such
Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Debt Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Debt Securities so
authenticated; and in case at that time any of the Debt Securities shall not
have been authenticated, any successor to the Trustee may authenticate such
Debt Securities either in the name of any predecessor hereunder or in the name
of the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Debt Securities or in this
Indenture provided that the certificate of the Trustee shall have.
Section 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of Section 310(a) of the Trust Indenture Act.
The Trustee shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition. No
obligor upon the Debt Securities or Coupons, if any, of a particular series or
Person directly or indirectly controlling, controlled by or under common
control with such obligor shall serve as Trustee upon the Debt Securities and
Coupons of such series. The Trustee shall comply with Section 310(b) of the
Trust Indenture Act; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the Trust Indenture Act this Indenture or any
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if
the requirements for such exclusion set forth in Section 310(b)(1) of the Trust
Indenture Act are met.
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act.
A Trustee who has resigned or been removed shall be subject to Section 311(a)
of the Trust Indenture Act to the extent indicated therein.
Section 7.12. COMPLIANCE WITH TAX LAWS. The Trustee hereby agrees to
comply with all U.S. Federal income tax information reporting and withholding
requirements applicable to it with
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respect to payments of premium (if any) and interest on the Debt Securities,
whether acting as Trustee, Security Registrar, paying agent or otherwise with
respect to the Debt Securities.
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01. EVIDENCE OF ACTION BY HOLDERS. Whenever in this
Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Debt Securities of any or all series may take
action (including the making of any demand or request, the giving of any
direction, notice, consent or waiver or the taking of any other action) the
fact that at the time of taking any such action the Holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Holders in Person or by
agent or proxy appointed in writing, (b) by the record of the Holders voting in
favor thereof at any meeting of Holders duly called and held in accordance with
the provisions of Section 5.02 or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
Section 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF DEBT
SECURITIES. Subject to the provisions of Sections 7.01, 7.02 and 13.11, proof
of the execution of any instrument by a Holder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee.
The ownership of Registered Securities of any series shall be proved
by the Debt Security Register or by a certificate of the Registrar for such
series.
The ownership of Bearer Securities shall be proved by production of
such Bearer Securities or by a certificate executed by any bank or trust
company, which certificate shall be dated and shall state on the date thereof a
Bearer Security bearing a specified identifying number or other mark was
deposited with or exhibited to the Person executing such certificate by the
Person named in such certificate, or by any other proof of possession
reasonably satisfactory to the Trustee. The holding by the Person named in any
such certificate of any Bearer Security specified therein shall be presumed to
continue for a period of one year unless at the time of determination of such
holding (a) another certificate bearing a later date issued in respect of the
same Bearer Security shall be produced, (b) such Bearer Security shall be
produced by some other Person, (c) such Bearer Security shall have been
registered on the Debt Security Register, if, pursuant to Section 2.03, such
Bearer Security can be so registered, or (d) such Bearer Security shall have
been canceled or paid.
The Trustee may require such additional proof of any matter referred
to in this Section 8.02 as it shall deem necessary.
Section 8.03. WHO MAY BE DEEMED OWNER OF DEBT SECURITIES. Prior to due
presentment for registration of transfer of any Registered Security, the
Company, the Trustee, any paying agent
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and any Registrar may deem and treat the Person in whose name any Registered
Security shall be registered upon the books of the Company as the absolute
owner of such Registered Security (whether or not such Registered Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and premium, if any, and (subject to Section 2.03) interest on such
Registered Security and for all other purposes, and neither the Company nor the
Trustee nor any paying agent nor any Registrar shall be affected by any notice
to the contrary; and all such payments so made to any such Holder for the time
being, or upon his order, shall be valid and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Registered Security.
The Company, the Trustee and any paying agent may deem and treat the
Holder of any Bearer Security or Coupon as the absolute owner of such Bearer
Security or Coupon (whether or not such Debt Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and premium,
if any, and (subject to Section 2.03) interest on such Bearer Security or
Coupon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent shall be affected by any notice to the contrary; and all such
payments so made to any such Holder for the time being, or upon his order,
shall be valid and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such Bearer
Security or Coupon.
None of the Company, the Trustee, any paying agent or the Registrar
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Section 8.04. INSTRUMENTS EXECUTED BY HOLDERS BIND FUTURE HOLDERS. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.01, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Debt Securities of any series specified in
this Indenture in connection with such action and subject to the following
paragraph, any Holder of a Debt Security which is shown by the evidence to be
included in the Debt Securities the Holders of which have consented to such
action may, by filing written notice with the Trustee at its corporate trust
office and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Debt Security. Except as aforesaid any such
action taken by the Holder of any Debt Security shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Debt Security
and all past, present and future Holders of Coupons, if any, appertaining
thereto, and of any Debt Security issued upon transfer thereof or in exchange
or substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon such Debt Security or such other Debt Securities or
Coupons. Any action taken by the Holders of the percentage in aggregate
principal amount of the Debt Securities of any series specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the Holders of all the Securities and Coupons of such
series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Registered Securities entitled to
give their consent or take any other
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action required or permitted to be taken pursuant to this Indenture. If a
record date is fixed, then notwithstanding the immediately preceding paragraph,
those Persons who were Holders of Registered Securities at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders of Registered
Securities after such record date. No such consent shall be valid or effective
for more than 120 days after such record date unless the consent of the Holders
of the percentage in aggregate principal amount of the Debt Securities of such
series specified in this Indenture shall have been received within such 120-day
period.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURE MAY BE ENTERED
INTO WITHOUT CONSENT OF HOLDERS. The Company, when authorized by a resolution
of the Board of Directors, and the Trustee may from time to time and at any
time, without the consent of Holders, enter into an Indenture or Indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof) for one or more
of the following purposes:
(a) to evidence the succession pursuant to Article X of
another Person to the Company, or successive successions, and the assumption by
the Successor Company (as defined in Section 10.01) of the covenants,
agreements and obligations of the Company in this Indenture and in the Debt
Securities;
(b) to surrender any right or power herein conferred upon the
Company, to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of all
or any series of Debt Securities and the Coupons, if any, appertaining thereto
(and if such covenants are to be for the benefit of less than all series of
Debt Securities, stating that such covenants are expressly being included
solely for the benefit of such series) as the Board of Directors shall consider
to be for the protection of the Holders of such Debt Securities, and to make
the occurrence, or the occurrence and continuance, of a Default in any of such
additional covenants, restrictions, conditions or provisions a Default or an
Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture; provided, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
Indenture may provide for a particular period of grace after Default (which
period may be shorter or longer than that allowed in the case of other
Defaults) or may provide for an immediate enforcement upon such Default or may
limit the remedies available to the Trustee upon such Default or may limit the
right of the Holders of a majority in aggregate principal amount of any or all
series of Debt Securities to waive such default;
(c) to cure any ambiguity or omission or to correct or
supplement any provision contained herein, in any supplemental Indenture or in
any Debt Securities of any series that may be defective or inconsistent with any
other provision contained herein, in any supplemental Indenture or in the
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Debt Securities of such series; to convey, transfer, assign, mortgage or pledge
any property to or with the Trustee, or to make such other provisions in regard
to matters or questions arising under this Indenture as shall not adversely
affect the interests of any Holders of Debt Securities of any series;
(d) to modify or amend this Indenture in such a manner as to
permit the qualification of this Indenture or any Indenture supplemental hereto
under the Trust Indenture Act as then in effect, except that nothing herein
contained shall permit or authorize the inclusion in any Indenture supplemental
hereto of the provisions referred to in Section 316(a)(2) of the Trust
Indenture Act;
(e) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registerable as to
principal, to change or eliminate any restrictions on the payment of principal
of, or premium, if any, on, Registered Securities or of principal of, or
premium, if any, or interest on, Bearer Securities or to permit Registered
Securities to be exchanged for Bearer Securities; provided, that any such
action shall not adversely affect the interests of the Holders of Debt
Securities or any Coupons of any series in any material respect or permit or
facilitate the issuance of Debt Securities of any series in uncertificated
form;
(f) to comply with Article X;
(g) in the case of any Debt Securities and Coupons, if any,
appertaining thereto subordinated pursuant to Article XII, to make any change
in Article XII that would limit or terminate the benefits available to any
holder of Senior Indebtedness (or Representatives therefor) under Article XII;
(h) to add Guarantees with respect to any or all of the Debt
Securities or to secure any or all of the Debt Securities;
(i) to make any change that does not adversely affect the
rights of any Holder;
(j) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Debt Securities; provided,
however, that any such addition, change or elimination not otherwise permitted
under this Section 9.01 shall (i) neither (A) apply to any Debt Security of any
series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Debt Security with respect to such provision or (ii) shall
become effective only when there is no such Debt Security Outstanding;
(k) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate Trustee with respect to the Debt
Securities of one or more series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee;
(l) to establish the form or terms of Debt Securities and
Coupons, if any, of any series as permitted by Sections 2.01 and 2.03; and
(m) to provide for uncertificated Debt Securities in addition
to or in place of certificated Debt Securities (provided that the
uncertificated Debt Securities are issued in registered form for purposes of
Section 163(f) of the Internal Revenue Code of 1986, as amended, or in a manner
such that the uncertificated Debt Securities are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as amended).
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The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental Indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental Indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee without the consent
of the Holders of any of the Debt Securities or Coupons, if any, appertaining
thereto at the time Outstanding, notwithstanding any of the provisions of
Section 9.02.
In the case of Debt Securities or Coupons, if any, appertaining
thereto subordinated pursuant to Article XII, an amendment under this Section
9.01 may not make any change that adversely affects the rights under Article
XII of any holder of Senior Indebtedness then outstanding unless the holders of
such Senior Indebtedness (or any group or Representative thereof authorized to
give a consent) consent to such change.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected
thereby a notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section 9.01.
Section 9.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF
DEBT SECURITIES. Without notice to any Holder but with the consent (evidenced
as provided in Section 8.01) of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such supplemental Indenture, the Company, when authorized by a
resolution of the Board of Directors, and the Trustee may from time to time and
at any time enter into an Indenture or Indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of execution thereof) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental Indenture or of modifying in any manner the rights of
the Holders of the Debt Securities of such series; provided, that no such
supplemental Indenture, without the consent of the Holders of each Debt
Security so affected, shall (a) reduce the percentage in principal amount of
Debt Securities of any series whose Holders must consent to an amendment; (b)
reduce the rate of or extend the time for payment of interest on any Debt
Security or Coupon or reduce the amount of any payment to be made with respect
to any Coupon; (c) reduce the principal of or extend the Stated Maturity of any
Debt Security; (d) reduce the premium payable upon the redemption of any Debt
Security or change the time at which any Debt Security may or shall be redeemed
in accordance with Article III; (e) make any Debt Security or Coupon payable in
Currency other than that stated in the Debt Security; (f) in the case of any
Debt Security or Coupons, if any, appertaining thereto subordinated pursuant to
Article XII, make any change in Article XII that adversely affects the rights
of any Holder under Article XII; (g) release any security that may have been
granted in respect of the Debt Securities; (h) make any change in Section 6.06
or this Section 9.02; (i) change any obligation of the Company to pay
additional interest pursuant to Section 4.06; or (j) limit the obligation of
the
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Company to maintain a paying agency outside the United States for payment on
Bearer Securities as provided in Section 4.02 or limit the obligation of the
Company to redeem a Bearer Security as provided in Section 3.02(b).
A supplemental Indenture which changes or eliminates any covenant or
other provision of this Indenture which has been expressly included solely for
the benefit of one or more particular series of Debt Securities and Coupons, if
any, or which modifies the rights of the Holders of Debt Securities and Coupons
of such series with respect to such covenant or other provision, shall be
deemed not to affect the rights under this Indenture of the Holders of Debt
Securities and Coupons, if any, of any other series.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Directors authorizing the execution of any such supplemental
Indenture, and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental Indenture unless such supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion but shall not be obligated to
enter into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
In the case of any Debt Securities or Coupons, if any, appertaining
thereto, subordinated pursuant to Article XII, an amendment under this Section
9.02 may not make any change that adversely affects the rights under Article
XII of any holder of Senior Indebtedness then outstanding unless the holders of
such Senior Indebtedness (or any group or Representative thereof authorized to
give a consent) consent to such change.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected
thereby a notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section 9.02.
Section 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental Indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental Indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental Indenture complies with the provisions of
this Article IX.
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Section 9.04. DEBT SECURITIES MAY BEAR NOTATION OF CHANGES BY
SUPPLEMENTAL INDENTURES. Debt Securities and Coupons, if any, of any series
authenticated and delivered after the execution of any supplemental Indenture
pursuant to the provisions of this Article IX may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental Indenture. New Debt Securities and Coupons of
any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such
supplemental Indenture may be prepared and executed by the Company,
authenticated by the Trustee and delivered in exchange for the Debt Securities
and Coupons of such series then Outstanding. Failure to make the appropriate
notation or to issue a new Debt Security or Coupon of such series shall not
affect the validity of such amendment.
Section 9.05. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Debt Securities or Coupons, if any,
appertaining thereto unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 10.01. CONSOLIDATIONS AND MERGERS OF THE COMPANY. The Company
shall not consolidate with or merge with or into any Person, or convey,
transfer or lease all or substantially all its assets, unless: (a) either (i)
the Company shall be the continuing Person in the case of a merger or (ii) the
resulting, surviving or transferee Person if other than the Company (the
"Successor Company") shall be a corporation organized and existing under the
laws of the United States, any State thereof or the District of Columbia and
the Successor Company shall expressly assume, by an Indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under the Debt Securities and
Coupons, if any, according to their tenor, and this Indenture; (b) immediately
after giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Subsidiary of the Company
as a result of such transaction as having been Incurred by the Successor
Company or such Subsidiary at the time of such transaction), no Default or
Event of Default would occur or be continuing; (c) the Successor Company waives
any right to redeem any Bearer Security under circumstances in which the
Successor Company would be entitled to redeem such Bearer Security but the
Company would not have been so entitled to redeem if the consolidation, merger,
conveyance, transfer or lease had not occurred; and (d) the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and such supplemental
Indenture (if any) comply with this Indenture.
Section 10.02. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of
any consolidation or merger, or conveyance or transfer of the assets of the
Company as an entirety or virtually as an
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entirety in accordance with Section 10.01, the Successor Company shall succeed
to and be substituted for the Company, with the same effect as if it had been
named herein as the party of the first part, and the predecessor corporation
shall be relieved of any further obligation under the Indenture and the
Securities. The Successor Company thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all the Debt
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of the Successor
Company, instead of the Company, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Debt Securities and Coupons, if any, appertaining thereto,
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Debt Securities and Coupons,
if any, appertaining thereto, which the Successor Company thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the Debt
Securities and Coupons, if any, appertaining thereto so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Debt
Securities and Coupons, if any, appertaining thereto theretofore or thereafter
issued in accordance with the terms of this Indenture as though all such Debt
Securities and Coupons had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the Debt
Securities and Coupons, if any, appertaining thereto thereafter to be issued as
may be appropriate.
ARTICLE XI
SATISFACTION AND DISCHARGE OF
INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01. APPLICABILITY OF ARTICLE. If, pursuant to Section 2.03,
provision is made for the defeasance of Debt Securities of a series and if the
Debt Securities of such series are Registered Securities and denominated and
payable only in Dollars (except as provided pursuant to Section 2.03), then the
provisions of this Article XI relating to defeasance of Debt Securities shall
be applicable except as otherwise specified pursuant to Section 2.03 for Debt
Securities of such series. Defeasance provisions, if any, for Debt Securities
denominated in a Foreign Currency or for Bearer Securities may be specified
pursuant to Section 2.03.
Section 11.02. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancelation all Debt Securities of any series theretofore authenticated and
delivered (other than (A) Coupons appertaining to Bearer Securities of such
series called for redemption and maturing after the relevant redemption date,
surrender of which has been waived, (B) any Debt Securities and Coupons of such
series which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.09 and (C) Debt Securities and
Coupons for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company as provided in Section 11.05) or (ii) all Debt
Securities and the Coupons, if any, of such series not theretofore delivered to
the Trustee for cancelation shall have become due and payable, or are by their
terms to become due and payable within one year or are to
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be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company shall deposit
with the Trustee as trust funds the entire amount in the Currency in which such
Debt Securities are denominated (except as otherwise provided pursuant to
Section 2.03) sufficient to pay at maturity or upon redemption all Debt
Securities of such series not theretofore delivered to the Trustee for
cancelation, including principal and premium, if any, and interest due or to
become due on such date of maturity or redemption date, as the case may be, and
if in either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of such Debt Securities herein expressly provided for and rights to
receive payments of principal of, and premium, if any, and interest on, such
Debt Securities and any right to receive additional interest as provided in
Section 4.06) with respect to the Debt Securities of such series, and the
Trustee, on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging this
Indenture.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the
Company at any time may terminate, with respect to Debt Securities of a
particular series, (i) all its obligations under the Debt Securities of such
series and this Indenture with respect to the Debt Securities of such series
("legal defeasance option") or (ii) its obligations with respect to the Debt
Securities of such series under clause (c) of Section 10.01 and the related
operation of Section 6.01(d) and the operation of Sections 6.01(e), (f), (i)
and (j) ("covenant defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
If the Company exercises its legal defeasance option, payment of the
Debt Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Debt Securities of the defeased series may not be accelerated
because of an Event of Default specified in Sections 6.01(d), (e), (f), (i) and
(j) (except to the extent covenants or agreements referenced in such Sections
remain applicable).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 7.10, 11.05, 11.06
and 11.07 shall survive until the Debt Securities of the defeased series have
been paid in full. Thereafter, the Company's obligations in Sections 7.06,
11.05 and 11.06 shall survive.
Section 11.03. CONDITIONS OF DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option with respect to Debt
Securities of a particular series only if:
(a) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment of principal of,
and premium, if any, and interest on, the Debt Securities of such series to
maturity or redemption, as the case may be;
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(b) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their opinion
that the payments of principal and interest when due and without reinvestment
on the deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay the principal, premium and interest when due on all the Debt
Securities of such series to maturity or redemption, as the case may be;
(c) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(g) or (h) with respect to
the Company occurs which is continuing at the end of the period;
(d) no Default has occurred and is continuing on the date of
such deposit and after giving effect thereto;
(e) the deposit does not constitute a default under any other
agreement binding on the Company and, if the Debt Securities of such series are
subordinated pursuant to Article XII, is not prohibited by Article XII;
(f) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment Company
Act of 1940;
(g) in the event of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from the Internal Revenue Service a ruling, or (ii) since
the date of this Indenture there has been a change in the applicable Federal
income tax law, in either case of the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of Debt Securities of such
series will not recognize income, gain or loss for Federal income tax purposes
as a result of such defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(h) in the event of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of Debt Securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(i) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Debt Securities of such series
as contemplated by this Article XI have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Debt Securities of such
series at a future date in accordance with Article III.
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Section 11.04. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article XI. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Debt Securities and Coupons, if any, of the defeased series. In the event
the Debt Securities and Coupons, if any, of the defeased series are
subordinated pursuant to Article XII, money and securities so held in trust are
not subject to Article XII.
Section 11.05. REPAYMENT TO COMPANY. The Trustee and any paying agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors.
Section 11.06. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company
shall pay and shall indemnify the Trustee and the Holders against any tax, fee
or other change imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
Section 11.07. REINSTATEMENT. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XI until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article XI.
ARTICLE XII
SUBORDINATION OF DEBT SECURITIES
Section 12.01. APPLICABILITY OF ARTICLE; AGREEMENT TO SUBORDINATE. The
provisions of this Article XII shall be applicable to the Debt Securities of
any series (Debt Securities of such series referred to in this Article XII as
"Subordinated Debt Securities") designated, pursuant to Section 2.03, as
subordinated to Senior Indebtedness. Each Holder by accepting a Subordinated
Debt Security agrees that the Indebtedness evidenced by such Subordinated Debt
Security is subordinated in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment of all Senior Indebtedness
and that the subordination is for the benefit of and enforceable by the holders
of Senior Indebtedness. All provisions of this Article XII shall be subject to
Section 12.12.
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Section 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(a) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash of the Senior Indebtedness (including interest
(if any), accruing on or after the commencement of a proceeding in bankruptcy,
whether or not allowed as a claim against the Company in such bankruptcy
proceeding) before Holders of Subordinated Debt Securities shall be entitled to
receive any payment of principal of, or premium, if any, or interest on, the
Subordinated Debt Securities; and
(b) until the Senior Indebtedness is paid in full, any
distribution to which Holders of Subordinated Debt Securities would be entitled
but for this Article XII shall be made to holders of Senior Indebtedness as
their interests may appear, except that such Holders may receive shares of
stock and any debt securities that are subordinated to Senior Indebtedness to
at least the same extent as the Subordinated Debt Securities.
Section 12.03. DEFAULT ON SENIOR INDEBTEDNESS. The Company may not pay
the principal of, or premium, if any, or interest on, the Subordinated Debt
Securities or make any deposit pursuant to Article XI and may not repurchase,
redeem or otherwise retire (except, in the case of Subordinated Debt Securities
that provide for a mandatory sinking fund pursuant to Section 3.05, by the
delivery of Subordinated Debt Securities by the Company to the Trustee pursuant
to the first paragraph of Section 3.06) any Debt Securities (collectively, "pay
the Subordinated Debt Securities") if (a) any principal, premium or interest in
respect of Senior Indebtedness is not paid within any applicable grace period
(including at maturity) or (b) any other default on Senior Indebtedness occurs
and the maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (i) the default has been cured or waived and
any such acceleration has been rescinded or (ii) such Senior Indebtedness has
been paid in full in cash; provided, however, that the Company may pay the
Subordinated Debt Securities without regard to the foregoing if the Company and
the Trustee receive written notice approving such payment from the
Representative of each issue of Designated Senior Indebtedness. During the
continuance of any default (other than a default described in clause (a) or (b)
of the preceding sentence) with respect to any Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods, the Company may not pay the
Subordinated Debt Securities for a period (a "Payment Blockage Period")
commencing upon the receipt by the Company and the Trustee of written notice of
such default from the Representative of any Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period (a "Blockage
Notice") and ending 179 days thereafter (or earlier if such Payment Blockage
Period is terminated (A) by written notice to the Trustee and the Company from
the Person or Persons who gave such Blockage Notice, (B) by repayment in full
in cash of such Designated Senior Indebtedness or (C) because the default
giving rise to such Blockage Notice is no longer continuing). Notwithstanding
the provisions described in the immediately preceding sentence (but subject to
the provisions contained in the first sentence of this Section 12.03), unless
the holders of such Designated Senior Indebtedness or the Representative of
such holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the
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Subordinated Debt Securities after such Payment Blockage Period. Not more than
one Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to any number of issues of
Senior Indebtedness during such period; provided, however, that if any Blockage
Notice within such 360-day period is given by or on behalf of any holders of
Designated Senior Indebtedness (other than the Bank Indebtedness), the
Representative of the Bank Indebtedness may give another Blockage Notice within
such period; provided, further, however, that in no event may the total number
of days during which any Payment Blockage Period or Periods is in effect exceed
179 days in the aggregate during any 360 consecutive day period. For purposes
of this Section 12.03, no default or event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Senior Indebtedness initiating such Payment Blockage Period
shall be, or be made, the basis of the commencement of a subsequent Payment
Blockage Period by the Representative of such Senior Indebtedness, whether or
not within a period of 360 consecutive days, unless such default or event of
default shall have been cured or waived for a period of not less than 90
consecutive days.
Section 12.04. ACCELERATION OF PAYMENT OF DEBT SECURITIES. If payment
of the Subordinated Debt Securities is accelerated because of an Event of
Default, the Company or the Trustee shall promptly notify the holders of the
Designated Senior Indebtedness (or their Representatives) of the acceleration.
Section 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to Holders of Subordinated Debt Securities that because of this Article
XII should not have been made to them, the Holders who receive such
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
Section 12.06. SUBROGATION. After all Senior Indebtedness is paid in
full and until the Subordinated Debt Securities are paid in full, Holders
thereof shall be subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness. A distribution made
under this Article XII to holders of Senior Indebtedness which otherwise would
have been made to Holders of Subordinated Debt Securities is not, as between
the Company and such Holders, a payment by the Company on Senior Indebtedness.
Section 12.07. RELATIVE RIGHTS. This Article XII defines the relative
rights of Holders of Subordinated Debt Securities and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders of either
Subordinated Debt Securities or Debt Securities, the obligation of the Company,
which is absolute and unconditional, to pay principal of, and premium, if any,
and interest on, the Subordinated Debt Securities and the Debt Securities in
accordance with their terms; or
(b) prevent the Trustee or any Holder of either Subordinated
Debt Securities or Debt Securities from exercising its available remedies upon
a Default, subject to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Holders of Subordinated Debt Securities.
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Section 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Subordinated Debt Securities shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture.
Section 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 12.03, the Trustee or any paying agent may continue to make payments on
Subordinated Debt Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two business days prior to the date of such payment, a
responsible officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article XII. The Company, the Registrar,
any paying agent, a Representative or a holder of Senior Indebtedness may give
the notice; provided, however, that, if an issue of Senior Indebtedness has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and any paying agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article XII with respect
to any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness; and nothing in Article VII
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article XII shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.06.
Section 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
Section 12.11. ARTICLE XII NOT TO PREVENT DEFAULTS OR LIMIT RIGHT TO
ACCELERATE. The failure to make a payment pursuant to the Debt Securities by
reason of any provision in this Article XII shall not be construed as
preventing the occurrence of a Default. Nothing in this Article XII shall have
any effect on the right of the Holders or the Trustee to accelerate the
maturity of either the Subordinated Debt Securities or the Debt Securities, as
the case may be.
Section 12.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article XI by the Trustee for the
payment of principal of, and premium, if any, and interest on, the Subordinated
Debt Securities or the Debt Securities shall not be subordinated to the prior
payment of any Senior Indebtedness or subject to the restrictions set forth in
this Article XII, and none of the Holders thereof shall be obligated to pay
over any such amount to the Company or any holder of Senior Indebtedness of the
Company or any other creditor of the Company.
Section 12.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Holders shall be
entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
12.02 are pending, (b) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to such
Holders or (c) upon the Representatives for the
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holders of Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Senior Indebtedness and other Indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XII. In the event that the
Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article XII, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this Article XII,
and, if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Sections 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article XII.
Section 12.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder by
accepting a Subordinated Debt Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders of Subordinated
Debt Securities and the holders of Senior Indebtedness as provided in this
Article XII and appoints the Trustee as attorney-in-fact for any and all such
purposes.
Section 12.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall mistakenly pay over or distribute to Holders of Subordinated Debt
Securities or the Company or any other Person, money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article XII
or otherwise.
Section 12.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Holder by accepting a Subordinated Debt Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Subordinated Debt Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company or the Trustee shall bind its
successors and assigns, whether so expressed or not.
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Section 13.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR
COMPANY VALID. Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any Successor Company.
Section 13.03. REQUIRED NOTICES OR DEMANDS. Except as otherwise
expressly provided in this Indenture, any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders to or on the Company may be given or served by
being deposited postage prepaid in a post office letter box in the United
States addressed (until another address is filed by the Company with the
Trustee) as follows: Pioneer Natural Resources Company, 1400 Williams Square
West, 5205 North O'Connor Boulevard, Irving, Texas 75039, Attention: Chief
Financial Officer. Except as otherwise expressly provided in this Indenture,
any notice, direction, request or demand by the Company or by any Holder to or
upon the Trustee may be given or made, for all purposes, by being deposited
postage prepaid in a post office letter box in the United States addressed to
the corporate trust office of the Trustee initially at [TRUSTEE ADDRESS]. The
Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice required or permitted to a Registered Holder by the Company
or the Trustee pursuant to the provisions of this Indenture shall be deemed to
be properly mailed by being deposited postage prepaid in a post office letter
box in the United States addressed to such Holder at the address of such Holder
as shown on the Debt Security Register. Any report pursuant to Section 313 of
the Trust Indenture Act shall be transmitted in compliance with subsection (c)
therein.
Any notice required or permitted to a Bearer Holder by the Company or
the Trustee pursuant to this Indenture shall be deemed to be properly given if
published on two separate business days in an Authorized Newspaper or
Newspapers in such Place or Places of Payment specified pursuant to Section
2.03, the first such publication to be not earlier than the earliest date and
not later than two business days prior to the latest date prescribed for the
giving of such notice. Notwithstanding the foregoing, any notice to Holders of
Floating Rate Debt Securities regarding the determination of a periodic rate of
interest, if such notice is required pursuant to Section 2.03, shall be
sufficiently given if given in the manner specified pursuant to Section 2.03.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall
constitute sufficient notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspaper
or by reason of any other cause it shall be impracticable to give notice by
publication, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Failure to mail a notice or communication to a Holder or any defect in
it or any defect in any notice by publication as to a Holder shall not affect
the sufficiency of such notice with respect to other Holders. If a notice or
communication is mailed or published in the manner provided above, it is
conclusively presumed duly given.
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Section 13.04. INDENTURE AND DEBT SECURITIES TO BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture, each Debt
Security and each Coupon shall be deemed to be New York contracts, and for all
purposes shall be construed in accordance with the laws of said State (without
reference to principles of conflicts of law).
Section 13.05. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE
FURNISHED UPON APPLICATION OR DEMAND BY THE COMPANY. Upon any application or
demand by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
Person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of such
Person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.
Section 13.06. PAYMENTS DUE ON LEGAL HOLIDAYS. In any case where the
date of maturity of interest on or principal of and premium, if any, on the
Debt Securities of a series or the date fixed for redemption or repayment of
any Debt Security or the making of any sinking fund payment shall not be a
business day at any Place of Payment for the Debt Securities of such series,
then payment of interest or principal and premium, if any, or the making of
such sinking fund payment need not be made on such date at such Place of
Payment, but may be made on the next succeeding business day at such Place of
Payment with the same force and effect as if made on the date of maturity or
the date fixed for redemption, and no interest shall accrue for the period
after such date. If a record date is not a business day, the record date shall
not be affected.
Section 13.07. PROVISIONS REQUIRED BY TRUST INDENTURE ACT TO CONTROL.
If and to the extent that any provision of this Indenture limits, qualifies or
conflicts with another provision included in this Indenture which is required
to be included in this Indenture by any of Sections 310 to 318, inclusive, of
the Trust Indenture Act, such required provision shall control.
Section 13.08. COMPUTATION OF INTEREST ON DEBT SECURITIES. Interest,
if any, on the Debt Securities shall be computed on the basis of a 360-day year
of twelve 30-day months, except as may otherwise be provided pursuant to
Section 2.03.
76
<PAGE> 83
Section 13.09. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and any paying agent may make reasonable rules for their functions.
Section 13.10. NO RECOURSE AGAINST OTHERS. An incorporator or any
past, present or future director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Debt Securities, the Coupons or this Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Debt Security or Coupon, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for
the issue of the Debt Securities and Coupons.
Section 13.11. SEVERABILITY. In case any provision in this Indenture,
the Debt Securities or the Coupons shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 13.12. EFFECT OF HEADINGS. The article and section headings
herein and in the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 13.13. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
77
<PAGE> 84
The Trustee hereby accepts the trusts in this Indenture upon the terms
and conditions herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed as of the date first written above.
PIONEER NATURAL RESOURCES COMPANY,
By:
---------------------------------------------
Name:
Title:
[TRUSTEE],
By:
---------------------------------------------
Name: [SIGNATORY NAME]
Title: [SIGNATORY TITLE]
78
<PAGE> 1
EXHIBIT 5.1
[VINSON & ELKINS L.L.P. LETTERHEAD]
December 31, 1997
(214) 220-7700 (214) 220-7716
Pioneer Natural Resources Company
Pioneer Natural Resources USA, Inc.
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75309
Re: Pioneer Natural Resources Company
Pioneer Natural Resources USA, Inc.
Registration Statement on Form S-3 (No. 333-42315)
Debt Securities
Preferred Stock, par value $.01 per share
Depositary Shares
Common Stock, par value $.01 per share
Warrants
Guarantees of Debt Securities
Ladies and Gentlemen:
We have acted as counsel for Pioneer Natural Resources Company, a
Delaware corporation (the "Company"), and Pioneer Natural Resources USA, Inc. a
Delaware corporation (the "Guarantor"), in connection with the registration
under the Securities Act of 1933 (the "Securities Act"), on a Registration
Statement on Form S-3 (No. 333-42315 ) (the "Registration Statement") of the
offer and sale from time to time pursuant to Rule 415 under the Securities Act
of the following securities for an aggregate initial offering price not to
exceed $1,400,000,000: (i) debt securities of the Company ("Debt Securities");
(ii) shares of preferred stock, par value $.01 per share, of the Company
("Preferred Stock"); (iii) depositary shares representing fractional interests
in Preferred Stock ("Depositary Shares"); (iv) shares of common stock, par
value $.01 per share, of the Company ("Common Stock"); (v) warrants to purchase
Debt Securities, Preferred Stock or Common Stock (the "Warrants"); and (vi)
guarantees of Debt Securities (the "Guarantees" and, together with the Debt
Securities, Preferred Stock, Depositary Shares, Common Stock and Warrants, the
"Securities").
For purposes of rendering the opinions contained in this letter, we
have reviewed those agreements, records, documents, and matters of law as we
have deemed relevant in order to render the opinions set forth herein,
including but not limited to (a) the Certificate of Incorporation and the
Bylaws of the Company, (b) resolutions adopted by the Board of Directors of the
Company, (c) the Certificate of Incorporation and the Bylaws of the Guarantor,
(d) resolutions adopted by the Board of Directors of the Guarantor, and (e)
the Indenture in the form of Exhibit 4.2 to the Registration Statement to be
<PAGE> 2
Pioneer Natural Resources Company
Pioneer Natural Resources USA, Inc.
December 31, 1997
Page 2
executed by the Company and the trustee (the "Indenture"), pursuant to which
Debt Securities may be issued.
As to certain questions of fact material to our opinions, we have
relied upon certificates from officers of the Company and the Guarantor and
other persons, as appropriate, and upon certificates of public officials.
Based upon and subject to the foregoing and subject further to the
assumptions, exceptions and qualifications hereinafter stated, we express the
following opinions:
1. With respect to Debt Securities to be issued under the Indenture,
when (A) the Indenture has been duly authorized and validly executed and
delivered by the Company to the trustee, (B) the Indenture has been duly
qualified under the Trust Indenture Act of 1939, (C) the Company's Board has
taken all necessary corporate action to approve the issuance and terms of such
Debt Securities, the terms of the offering thereof and related matters, and (D)
such Debt Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Indenture and the applicable
definitive purchase, underwriting or similar agreement approved by the Company's
Board upon payment of the consideration therefor provided for therein, such Debt
Securities will be legally issued and will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as such enforcement is subject to any applicable bankruptcy,
insolvency, reorganization or other law relating to or affecting creditors'
rights generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2. With respect to shares of Preferred Stock, when both (A) the
Company's Board has taken all necessary corporate action to approve the
issuance and terms of the shares of Preferred Stock, the terms of the offering
thereof, and related matters, including the adoption of a Certificate of
Designation relating to such Preferred Stock (a "Certificate") and the filing
of the Certificate with the Secretary of State of the State of Delaware, and
(B) certificates representing the shares of Preferred Stock have been duly
executed, countersigned, registered and delivered either (i) in accordance with
the applicable definitive purchase, underwriting or similar agreement approved
by the Company's Board upon payment of the consideration therefor (not less
than the par value of the Preferred Stock) provided for therein or (ii) upon
conversion or exercise of any other Security, in accordance with the terms of
such Security or the instrument governing such Security providing for such
conversion or exercise as approved by the Company's Board, for the
consideration approved by the Board (not less than the par value of the
Preferred Stock), then the shares of Preferred Stock will be legally issued,
fully paid and non assessable.
3. With respect to Depositary Shares, when (A) the Company's Board has
taken all necessary corporate action to approve the issuance and terms of the
Depositary Shares, the terms of the offering thereof, and related matters,
including the adoption of a Certificate relating to the Preferred Stock
<PAGE> 3
Pioneer Natural Resources Company
Pioneer Natural Resources USA, Inc.
December 31, 1997
Page 3
underlying such Depositary Shares and the filing of the Certificate with the
Secretary of State of the State of Delaware, (B) the Depositary Agreement or
Agreements relating to the Depositary Shares and the related Depositary
Receipts have been duly authorized and validly executed and delivered by the
Company and the Depositary appointed by the Company, (C) the shares of
Preferred Stock underlying such Depositary Shares have been deposited with a
bank or trust company (which meets the requirements for the Depositary set
forth in the Registration Statement) under the applicable Depositary
Agreements, and (D) the Depositary Receipts representing the Depositary Shares
have been duly executed, countersigned, registered and delivered in accordance
with the appropriate Depositary Agreement and the applicable definitive
purchase, underwriting or similar agreements approved by the Company's Board
upon payment of the consideration therefore provided for therein, the
Depositary Shares will be legally issued.
4. With respect to shares of Common Stock, when both (A) the Board of
Directors of the Company or, to the extent permitted by Section 141(c) of the
General Corporation Law of the State of Delaware, a duly constituted and acting
committee thereof (such Board of Directors or committee being hereinafter
referred to as the "Board") has taken all necessary corporate action to approve
the issuance of and the terms of the offering of the shares of Common Stock and
related matters and (B) certificates representing the shares of Common Stock
have been duly executed, countersigned, registered and delivered either (i) in
accordance with the applicable definitive purchase, underwriting or similar
agreement approved by the Company's Board upon payment of the consideration
therefor (not less than the par value of the Common Stock) provided for therein
or (ii) upon conversion or exercise of any other Security, in accordance with
the terms of such Security or the instrument governing such Security providing
for such conversion or exercise as approved by the Board, for the consideration
approved by the Company's Board (not less than the par value of the Common
Stock), then the shares of Common Stock will be legally issued, fully paid and
nonassessable.
5. With respect to the Warrants, when (A) the Company's Board has
taken all necessary corporate action to approve the creation of and the
issuance and terms of the Warrants, the terms of the offering thereof, and
related matters, (B) the warrant agreement or agreements relating to the
Warrants have been duly authorized and validly executed and delivered by the
Company and the warrant agent appointed by the Company, and (C) the Warrants or
certificates representing the Warrants have been duly executed, countersigned,
registered and delivered in accordance with the appropriate warrant agreement
or agreements and the applicable definitive purchase, underwriting or similar
agreement approved by the Company's Board upon payment of the consideration
therefor provided for therein, the Warrants will be legally issued.
6. With respect to Guarantees, when (A) the Indenture or an
appropriate supplemental indenture, if any, has been duly authorized and
validly executed and delivered by the Guarantor to the Trustee, (B) the
Guarantor's Board has taken all necessary corporate action to approve the
issuance and terms of such Guarantees, the terms of the offering thereof and
related matters, (C) the related Debt Securities have been properly issued as
contemplated in paragraph 1 of this opinion, and (D) the Guarantees have been
duly executed, issued and delivered in accordance with the provisions of the
Indenture (if applicable) and the applicable definitive purchase, underwriting
or similar agreement approved by the Guarantor's Board upon the payment of the
consideration therefor provided for therein, such Guarantees will be legally
issued and will constitute valued and binding obligations of the Guarantor,
enforceable against the Guarantor in accordance with their terms, except as
such enforcement is subject to any applicable bankruptcy, insolvency,
reorganization, or other law relating to or affecting creditor's rights
generally and general principals of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
<PAGE> 4
Pioneer Natural Resources Company
Pioneer Natural Resources USA, Inc.
December 31, 1997
Page 4
The opinions expressed above are subject in all respects to the
following assumptions, exceptions and qualifications:
a. We have assumed (i) all information contained in all documents
reviewed by us is true and correct, (ii) the genuineness of all signatures on
all documents reviewed by us, (iii) the authenticity and completeness of all
documents submitted to us as originals, (iv) the conformity to authentic
originals of all documents submitted to us as certified or photostatic copies,
(v) each natural person signing any document reviewed by us had the legal
capacity to do so, (vi) each person signing in a representative capacity any
document reviewed by us had authority to sign in such capacity, and (vii) the
laws of any jurisdiction other than Texas that govern any of the documents
reviewed by us or referenced in this opinion letter (other than the Company's
Composite Certificate of Incorporation and Bylaws) do not modify the terms that
appear in any such document.
b. We have assumed that (i) the Registration Statement and any
amendments thereto (including post-effective amendments) will have become
effective and comply with all applicable laws; (ii) the Registration Statement
will be effective and will comply with all applicable laws at the time the
Securities are offered or issued as contemplated by the Registration Statement
(if such offering or issuance requires the delivery of a prospectus under the
Securities Act or pursuant to any other law); (iii) a Prospectus Supplement
will have been prepared and filed with the Securities and Exchange Commission
describing the Securities offered thereby and will comply with all applicable
laws; (iv) all Securities will be issued and sold in compliance with applicable
federal and state securities laws and in the manner stated in the Registration
Statement and the appropriate Prospectus Supplement; (v) a definitive purchase,
underwriting or similar agreement with respect to any Securities offered or
issued will have been duly authorized and validly executed and delivered by the
Company and the other parties thereto; and (vi) any Securities issuable upon
conversion, exchange or exercise of any Security being offered or issued will
be duly authorized, created and, if appropriate, reserved for issuance upon
such conversion, exchange or exercise.
c. In rendering the opinions in paragraph 1 and 6, we have assumed
that the trustee is or, at the time the Indenture is signed, will be qualified
to act as trustee under the Indenture and that the trustee has or will have
duly executed and delivered the Indenture.
d. We express no opinion with respect to (i) the enforceability of
provisions in the Indenture, Guarantees, or any other agreement or instrument
with respect to delay or omission of enforcement of rights or remedies, or
waivers of defenses, or waivers of benefits of stay, extension, moratorium,
redemption, statutes of limitation, or other nonwaivable benefits bestowed by
operation of law; or (ii) the enforceability of indemnification provisions to
the extent they purport to relate to liabilities resulting from or based upon
negligence or any violation of federal or state securities or blue sky laws.
<PAGE> 5
Pioneer Natural Resources Company
Pioneer Natural Resources USA, Inc.
December 31, 1997
Page 5
e. We express no opinion as to the requirements of or compliance with
federal or state securities laws or regulations.
f. We note that the Indenture by its terms purports to be governed by
the laws of the State of New York and that the terms of the Warrants and
Guarantees, when determined, may be governed by the laws of a jurisdiction
other than the State of Texas or other than the General Corporation Law of the
State of Delaware. While we express no opinion with respect to the laws of the
State of New York or such other jurisdictions in rendering these opinions, we
have assumed that the internal laws of the State of New York and such other
jurisdictions are the same as the internal laws of the State of Texas. We have
not conducted any analysis to determine whether that assumption is correct.
g. The opinions expressed in this letter are limited to the laws of
the State of Texas, the General Corporation Law of the State of Delaware, and
the federal laws of the United States of America. You should be aware that we
are not admitted to the practice of law in the State of Delaware.
We consent to the filing of this opinion of counsel as Exhibit 5 to
the Registration Statement. We also consent to the reference to this firm under
the heading "Legal Opinions" in the Prospectus forming a part of the
Registration Statement. In giving this consent, we do not admit that this firm
is in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
We disclaim any duty to advise you regarding any changes in, or
otherwise communicate with you with respect to, the matters addressed herein.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 12.1
PARKER & PARSLEY PETROLEUM COMPANY
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
------------ ----------
NINE MONTHS NINE MONTHS YEAR ENDED DECEMBER 31, NINE MONTHS YEAR ENDED
ENDED ENDED -------------------------------------------------- ENDED DECEMBER 31,
SEP. 30, 1997 SEP. 30, 1996 1996 1995 1994 1993 1992 SEP. 30, 1997 1996
----------------------------- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PRETAX EARNINGS 23,478 163,031 200,348 (150,007) (20,491) 48,403 30,146 (35,076) 78,808
----------------------------- ----------------------------------------------------------------------------
ADJUSTMENTS:
ADD FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS:
INTEREST:
EXPENSED 44,264 36,105 46,155 65,449 50,552 23,338 14,708 106,406 138,580
CAPITALIZED 0 0 0 0 0 733 0 157
RENTAL EXPENSE
ATTRIBUTABLE TO
INTEREST 724 724 965 1,200 500 567 367 724 965
PREFERRED STOCK
DIVIDENDS OF
SUBSIDIARY 0 0 0 0 0 0 0 0 0
PREFERRED STOCK
DIVIDENDS OF THE
COMPANY 0 0 0 0 0 0 0 0 0
----------------------------- ----------------------------------------------------------------------------
TOTAL FIXED
CHARGES AND
PREFERRED
STOCK DIVIDENDS 44,988 36,829 47,120 66,649 51,052 23,905 15,808 107,130 139,702
----------------------------- ----------------------------------------------------------------------------
DEDUCT:
INTEREST CAPITALIZED 0 0 0 0 0 0 733 0 157
PREFERRED STOCK
DIVIDENDS OF
SUBSIDIARY 0 0 0 0 0 0 0 0 0
----------------------------- ----------------------------------------------------------------------------
TOTAL DEDUCTS 0 0 0 0 0 0 733 0 157
----------------------------- ----------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------
ADJUSTED EARNINGS 68,466 199,860 247,468 (83,358) 30,561 72,306 45,221 72,054 218,353
============================= ============================================================================
RATIO OF EARNINGS
TO FIXED CHARGES 1.52 5.43 5.25 (1.25) 0.60 3.02 2.86 0.67 1.56
RATIO OF EARNINGS
TO FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS (C) 1.52 5.43 5.25 (1.25) 0.60 3.02 2.86 0.67 1.56
============================= ============================================================================
RATIO OF EARNINGS TO
FIXED CHARGES
DISCLOSURE 1.5 5.4 5.3 (b) (b) 3.0 2.9 (b) 1.6
DEFICIENCY,
IF ANY 150,007 20,491 35,076
</TABLE>
- -----------
(A) FOR PURPOSES OF COMPUTING SUCH RATIO, ADJUSTED EARNINGS CONSIST OF INCOME
BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE PLUS FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS, NET OF PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND INTEREST CAPITALIZED. FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS CONSIST OF INTEREST EXPENSE, INTEREST CAPITALIZED, THE PORTION OF
RENTAL EXPENSE ATTRIBUTABLE TO INTEREST, PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND PREFERRED STOCK DIVIDENDS OF THE COMPANY. THE DIVIDENDS ON THE
MIPS ARE RECORDED AS INTEREST EXPENSE FOR FINANCIAL REPORTING PURPOSES.
(B) THE RATIO INDICATES A LESS THAN ONE-TO-ONE COVERAGE BECAUSE THE EARNINGS
ARE INADEQUATE TO COVER THE FIXED CHARGES FOR THE PERIOD. PRO FORMA COMBINED
EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997, AND THE COMPANY'S
HISTORICAL EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994, WERE
INSUFFICIENT TO COVER ITS FIXED CHARGES. THE AMOUNTS OF THE DEFICIENCIES WERE
$27.6 MILLION, $150 MILLION AND $20.5 MILLION, RESPECTIVELY.
(C) FOR PURPOSES OF COMPUTING THE RATIO, ADJUSTED EARNINGS CONSIST OF INCOME
BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE PLUS FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS, NET OF PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND INTEREST CAPITALIZED, AND FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS CONSIST OF INTEREST EXPENSE, INTEREST CAPITALIZED, THE PORTION OF
RENTAL EXPENSE ATTRIBUTABLE TO INTEREST, PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY, AND PREFERRED STOCK DIVIDENDS. THE DIVIDENDS ON THE 6 1/4%
CUMULATIVE GUARANTEED MONTHLY INCOME CONVERTIBLE PREFERRED SHARES OF PARKER &
PARSLEY CAPITAL LLC, A SUBSIDIARY OF PARKER & PARSLEY, WERE RECORDED AS INTEREST
EXPENSE FOR FINANCIAL REPORTING PURPOSES UNTIL THOSE SHARES WERE CONVERTED INTO
COMMON STOCK OF PARKER & PARSLEY ON JULY 28, 1997.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors and Stockholders
Pioneer Natural Resources Company
We consent to the use of our reports on the consolidated financial statements of
Pioneer Natural Resources Company incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.
Our reports refer to a change in the method of accounting for the impairment of
long-lived assets and for long-lived assets to be disposed of and a change in
the method of accounting for income taxes.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Midland, Texas
January 2, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
Registration Statement (no. 333-42315).
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Dallas, Texas
December 31, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to Form
S-3 registration statement (no. 333-42315) of Pioneer Natural Resources Company
and Pioneer Natural Resources USA, Inc. of our report dated February 14, 1997
except for Notes 12(b) and (c) which are as of September 3, 1997 and October
29, 1997, respectively, on our audit of the consolidated financial statements
of Chauvco Resources Ltd. as at December 31, 1996 and 1995 and for each of the
years in the three year period ended December 31, 1996, and to all references
to our firm included in or made a part of this registration statement.
/s/ Price Waterhouse
Chartered Accountants
Calgary, Alberta
December 31, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to Form S-3
registration statement (no. 333-42315) of Pioneer Natural Resources Company and
Pioneer Natural Resources USA, Inc. of our report dated July 26, 1996, on our
audit of the financial statements of Greenhill Petroleum Corporation as of
June 30, 1996, and for the year ended. We also consent to the reference to our
firm under the caption "Expert".
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Houston, Texas
December 31, 1997
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
We hereby consent to the use of our audit letter prepared for Parker &
Parsley Petroleum Company, effective December 31, 1996, and to all references to
our firm included in or made a part of this Amendment No. 1 to the Registration
Statement on Form S-3 of Pioneer Natural Resources Company and Pioneer Natural
Resources USA, Inc.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ Frederic D. Sewell
--------------------------
Frederic D. Sewell
President
Dallas, Texas
December 31, 1997
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT ENGINEERS AND GEOLOGISTS
Williamson Petroleum Consultants, Inc. (Williamson) hereby consents to the
incorporation by reference to our report entitled "Evaluation and Review of Oil
and Gas Reserves to the Interests of Mesa Inc. in the Hugoton Area, Various
Counties, Kansas and West Panhandle Area, Various Counties, Texas, Effective
December 31, 1996, for Disclosure to the Securities and Exchange Commission,
Williamson Project 6.8421" dated March 17, 1997, with respect to Mesa Inc. and
to all references to our firm included in or made a part of the Pioneer Natural
Resources Company and Pioneer Natural Resources USA, Inc. Amendment No. 1 to the
Registration Statement on Form S-3 to be filed on or before January 5, 1998.
/s/ Williamson Petroleum Consultants, Inc.
------------------------------------------
WILLIAMSON PETROLEUM CONSULTANTS, INC.
Houston, Texas
December 31, 1997
<PAGE> 1
EXHIBIT 23.7
[MILLER AND LENTS, LTD. LETTERHEAD]
December 31, 1997
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Re: Consent of Independent Petroleum Engineers and Geology
Gentlemen:
We hereby consent to the incorporation by reference of our report dated
February 24, 1997 entitled "Reserve and Net Revenue Forecast as of December 31,
1996, SEC Price Case" with respect to Greenhill Petroleum Corporation and MESA
Inc. and to all references to our firm included in or made a part of the
Amendment No. 1 to the Registration Statement on Form S-3 of Pioneer Natural
Resources Company and Pioneer Natural Resources USA, Inc.
Very truly yours,
MILLER AND LENTS, LTD.
By: /s/ P.G. Von Tungeln
P.G. Von Tungeln
Chairman
<PAGE> 1
EXHIBIT 23.9
CONSENT OF INDEPENDENT ENGINEERS AND GEOLOGISTS
We hereby consent to the incorporation by reference of our report
entitled "Audit of Evaluation of Oil and Gas Reserves of Chauvco Resources Ltd."
prepared for Chauvco Resources Ltd. dated February 8, 1997 and to all references
to our firm included in or made a part of this Amendment No. 1 to Registration
Statement on Form S-3 of Pioneer Natural Resources Company and Pioneer Natural
Resources USA, Inc.
MARTIN PETROLEUM & ASSOCIATES
By: /s/ John M. Hewitt
-----------------------------
John M. Hewitt, M.A., P.Eng.
Associate Partner
Calgary, Alberta
December 31, 1997
