<PAGE>
As filed with the Securities and Exchange Commission on July 26, 1994
Registration No. ________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------------------------
WESTERN GAS RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1127613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12200 North Pecos Street
Denver, Colorado 80234-3439
(303) 452-5603
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
John C. Walter, Esq.
General Counsel
Western Gas Resources, Inc.
12200 North Pecos Street
Denver, Colorado 80234-3439
(303) 452-5603
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Robert M. Chilstrom, Esq. James D. Phyfe, Esq.
Skadden, Arps, Slate, Meagher & Flom Davis Polk & Wardwell
919 Third Avenue 450 Lexington Avenue
New York, NY 10022 New York, NY 10017
Tel: (212) 735-3000 Tel: (212) 450-4000
Fax: (212) 735-2001 Fax: (212) 450-4800
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of the Registration Statement.
If any of the securities being registered on this Form are to be 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]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================
Title of each class Amount Proposed maximum Proposed maximum Amount
of securities to be to be offering price aggregate of
registered registered per unit offering price registration fee
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities $138,000,000 100%(1)
Preferred Stock (2) (2) $138,000,000(1) $47,586
Depositary Shares (3) (3)
Common Stock (4) (4)
=======================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). The aggregate public offering price of Debt
Securities and Preferred Stock sold will not exceed $138,000,000.
(2) Such indeterminate number of shares of Preferred Stock as may from time to
time be issued at indeterminate prices.
(3) Such indeterminate number of Depositary Shares as may be issued in the event
the Registrant elects to offer fractional interests in shares of Preferred
Stock registered hereunder.
(4) Such indeterminate number of shares of Common Stock as may be issuable upon
conversion of any series of Debt Securities or Preferred Stock registered
hereunder, including such shares as may be issuable pursuant to anti-
dilution adjustments.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Pursuant to Rule 429, the Prospectus included herein also relates to
$62,000,000 of Securities registered as Debt Securities and Preferred Stock
under registration statement No. 33-66516. In the event any such previously
registered Debt Securities or Preferred Stock are offered prior to the effective
date of this registration statement, the amount of such Debt Securities or
Preferred Stock will not be included in any Prospectus hereunder. The amount of
Securities being registered, together with the remaining Securities registered
under registration statement No. 33-66516, represents the maximum amount of
Securities which are expected to be offered for sale.
The registrant hereby amends this registration statement on such 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 such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
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.
PROSPECTUS (Subject to Completion)
Issued July 26, 1994
WESTERN GAS RESOURCES, INC.
Debt Securities and Preferred Stock
Western Gas Resources, Inc. (the "Company"), directly, through agents
designated from time to time, or through dealers or underwriters also to be
designated, may offer and issue from time to time debt securities (the "Debt
Securities") in one or more series, on terms to be determined at the time of
sale. The Company may also offer and issue from time to time in one or more
series its Preferred Stock, par value $.10 per share (the "Preferred Stock"), on
terms to be determined at the time of sale. The Debt Securities and Preferred
Stock will be limited to an aggregate initial public offering price of up to
$200,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies. The Debt Securities and the Preferred Stock are
hereinafter collectively referred to as the "Securities."
The accompanying Prospectus Supplement will set forth specific terms of the
Securities, including (i) in the case of Debt Securities, specific designation,
ranking as senior or subordinated Debt Securities, aggregate principal amount,
maturity, rate and time of payment of interest, purchase price, any terms for
redemption, whether and on what terms the Debt Securities may be converted into
the Company's common stock, par value $.10 per share (the "Common Stock"), and
any other specific terms of the Debt Securities, and (ii) in the case of a
particular series of Preferred Stock, specific designation, aggregate number of
shares offered, dividend rate (or manner of calculation thereof), dividend
periods (or manner of calculation thereof), liquidation preference, voting
rights, any terms for redemption, whether and on what terms the shares of such
series may be converted into the Company's Common Stock at the option of the
holder, whether depositary shares representing shares of such series of
Preferred Stock will be offered and, if so, the fraction of a share of Preferred
Stock represented by each depositary share, listing, if any, on a securities
exchange and any other specific terms of such series of Preferred Stock. The
accompanying Prospectus Supplement will also set forth the name of and
compensation to each dealer, underwriter or agent, if any, involved in the sale
of the Securities being offered and the managing underwriters with respect to
each series of Securities sold to or through underwriters. The Company reserves
the sole right to accept and, together with its agents from time to time, to
reject, in whole or in part, any proposed purchase of Securities to be made
directly or through agents.
-----------------
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.
-----------------
If an agent of the Company or a dealer or underwriter is involved in the sale
of the Securities in respect of which this Prospectus is being delivered, the
agent's commission, dealer's purchase price, or underwriter's discount is set
forth in, or may be calculated from, the accompanying Prospectus Supplement and
the net proceeds to the Company from such sale will be the purchase price of
such Securities less such commission in the case of an agent, the purchase price
of such Securities in the case of a dealer or the public offering price less
such discount in the case of an underwriter, and less, in each case, the other
attributable issuance expenses. See "Plan of Distribution" for possible
indemnification arrangements for any agents, dealers and underwriters.
-----------------
MORGAN STANLEY & CO.
Incorporated
,1994
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation other than those contained in or
incorporated by reference to this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any underwriter, dealer or agent. Neither the delivery of
this Prospectus nor any sale made hereunder 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 does not constitute an offer to sell or
a solicitation of an offer to buy Securities 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 any person to whom it
is unlawful to make such offer or solicitation in such jurisdiction.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, IL 60661 and 7 World Trade Center, 13th Floor, New York, NY 10048.
Copies of such material can also be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, such material can be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed a registration statement (the "Registration Statement")
on Form S-3 with respect to the Securities offered hereby with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus, which constitutes a part of the Registration Statement, relates only
to the Securities offered by the Company, and does not contain all the
information set forth in the Registration Statement, certain items of which are
contained in schedules and exhibits to the Registration Statement as permitted
by the rules and regulations of the Commission. Statements contained in this
Prospectus as to the contents of any agreement, instrument or other document
referred to are not necessarily complete. With respect to each such agreement,
instrument or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company are incorporated by reference in this
Prospectus: (i) Annual Report on Form 10-K for the year ended December 31,
1993, (ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
(iii) Proxy Statement for the Annual Meeting of Stockholders held on May 11,
1994, all of which have previously been filed by the Company with the
Commission; provided, however, that the Report of the Compensation Committee
contained in such Proxy Statement is not incorporated herein by reference; (iv)
Registration Statement on Form 8-A with respect to the Company's $2.28
Cumulative Convertible Preferred Stock, declared effective on November 12, 1992;
(v) Registration Statement on Form 8-A with respect to the Company's $2.625
Cumulative Convertible Preferred Stock, declared effective by the Commission on
February 17, 1994; and (vi) Current Reports on Form 8-K dated January 31, 1994,
February 10, 1994 and February 24, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus 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
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to John C. Walter, Vice
President-General Counsel and Secretary, Western Gas Resources, Inc., 12200
North Pecos Street, Denver, Colorado 80234-3439 (telephone (303) 452-5603).
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES
OF SUCH SECURITIES OR OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
4
<PAGE>
WESTERN GAS RESOURCES, INC.
Western Gas Resources, Inc., a Delaware corporation, is a leading independent
gas gatherer and processor with operations located in major gas-producing basins
in the Rocky Mountain, Gulf Coast and Southwestern regions of the United States.
The Company owns and operates natural gas gathering, processing and storage
facilities and markets and transports natural gas and natural gas liquids
("NGLs"). The Company provides necessary services to the producers of natural
gas and NGLs by connecting producers' wells to the Company's gathering system
for transportation to its processing plants, processing the gas to remove NGLs
and by-products and providing access for the gas and NGLs to multiple markets.
The Company's principal offices are located at 12200 North Pecos Street, Denver,
Colorado 80234-3439, and its telephone number is (303) 452-5603.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the unaudited consolidated ratios of earnings
to fixed charges and earnings to fixed charges and preferred stock dividends of
the Company for the periods indicated.
<TABLE>
<CAPTION>
Year Ended December 31,
Three Months Ended ----------------------------
March 31, 1994 1993 1992 1991 1990 1989
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges..................... 1.15 3.66 5.30 3.19 5.50 4.36
Ratio of earnings to fixed
charges and preferred stock
dividends................... 0.82 2.49 3.87 2.10 2.99 2.38
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes and fixed charges. For the purpose of
computing the ratio of earnings to fixed charges and preferred stock dividends,
earnings consist of income before income taxes and fixed charges and preferred
stock dividends. For purposes of calculating both ratios, fixed charges consist
of interest (including capitalized interest, but excluding amortization of
amounts previously capitalized) on all indebtedness, amortization of debt
discount and expense and that portion of rental expense which the Company
believes to be representative of interest. Statements setting forth the
unaudited computations of the consolidated ratio of earnings to fixed charges
and consolidated ratio of earnings to fixed charges and preferred stock
dividends are filed as exhibits to the Registration Statement of which this
Prospectus is a part.
USE OF PROCEEDS
Unless otherwise set forth in the accompanying Prospectus Supplement, the net
proceeds from the sale of the Securities will be used for general corporate
purposes, which may include acquisitions, repayment of debt, working capital and
capital expenditures. Pending application for specific purposes, the net
proceeds will be invested in short-term marketable securities.
5
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an indenture (the "Indenture")
between the Company and Texas Commerce Bank National Association, as trustee
(the "Trustee"). The Debt Securities may constitute either senior or
subordinated debt of the Company as set forth in any accompanying Prospectus
Supplement for a specific series of Debt Securities. The following statements
are subject to the detailed provisions of the Indenture, a copy of which is
filed as an exhibit to the Registration Statement. Wherever references are made
to particular provisions of the Indenture, such provisions are incorporated by
reference as a part of the statements made and such statements are qualified in
their entirety by such reference. Capitalized terms not otherwise defined
herein shall have the meanings given in the Indenture.
General
The Indenture does not limit the amount of the Debt Securities which may be
issued thereunder. The accompanying Prospectus Supplement sets forth the
following terms of and information relating to the Debt Securities in respect of
which this Prospectus is delivered (to the extent such terms are applicable to
such Debt Securities): (1) the designation of such Debt Securities; (2)
classification as senior or subordinated Debt Securities; (3) the aggregate
principal amount of such Debt Securities; (4) the percentage of their principal
amount at which such Debt Securities will be issued; (5) the date or dates on
which such Debt Securities will mature; (6) the rate or rates, if any, per
annum, at which such Debt Securities will bear interest, or the method of
determination of such rate or rates; (7) the times at which such interest, if
any, will be payable; (8) provisions for sinking, purchase or other analogous
fund, if any; (9) the date or dates, if any, after which such Debt Securities
may be redeemed at the option of the Company or of the holder and the redemption
price or prices; (10) the date or the dates, if any, after which such Debt
Securities may be converted at the option of the holder into shares of Common
Stock of the Company and the terms for any such conversion; and (11) any other
specific terms of the Debt Securities. Principal, premium, if any, and
interest, if any, will be payable and the Debt Securities offered hereby will be
transferable, at the corporate trust office of the Trustee's agent in the
borough of Manhattan, the City of New York, provided that payment of interest,
if any, may be made at the option of the Company by check mailed to the address
of the person entitled thereto as it appears in the Security Register.
If the accompanying Prospectus Supplement specifies that a series of Debt
Securities is denominated in a currency or currency unit other than United
States dollars, such Prospectus Supplement shall also specify the denomination
in which such Debt Securities will be issued and the coin or currency in which
the principal, premium, if any, and interest, if any, on such Debt Securities
will be payable, which may be United States dollars based upon the exchange rate
for such other currency or currency unit existing on or about the time a payment
is due. Special United States federal income tax considerations applicable to
any Debt Securities so denominated are also described in the applicable
Prospectus Supplement.
The Debt Securities offered hereby will be issued only in fully registered
form without coupons and, unless otherwise specified in the Prospectus
Supplement, in denominations of $1,000 and multiples of $1,000. Debt Securities
may be issued in book-entry form, without certificates. Any such issue will be
described in the Prospectus Supplement relating to such Debt Securities. No
service charge will be made for any transfer or exchange of the Debt Securities,
but the Company or the Trustee may require payment of a sum sufficient to cover
any tax or other government charge payable in connection therewith.
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be sold at a substantial discount from their stated principal
amount. Federal income tax consequences and other considerations applicable
thereto will be described in the applicable Prospectus Supplement.
The Indenture contains no covenants or other provisions affording protection
to holders of the Debt Securities in the event of a highly leveraged transaction
or a change in control of the Company, except to the limited extent described
under "Limitation on Mergers and Sales of Assets."
Global Securities
The Debt Securities of a series may be issued in the form of one or more
fully registered global Debt Securities (a "Registered Global Security") that
will be deposited with a depositary (a "Debt Depositary") or with a nominee for
a Debt Depositary or a nominee thereof. In such case, one or more Registered
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such Registered Global Security or
Securities. Unless and until it is exchanged in whole for Debt Securities in
definitive form, a Registered Global Security may not be transferred except as a
whole by the Debt Depositary for such Registered Global Security, to a nominee
of such Debt Depositary or by a nominee of such Debt Depositary to such Debt
Depositary or another nominee of such Debt Depositary or by such Debt Depositary
or any such nominee to a successor of such Debt Depositary or a nominee of such
successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global Security
will be described in the Prospectus Supplement relating to such series. The
Company anticipates that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Debt Depositary for such
Registered Global Security ("participants") or persons that may hold interests
through participants.
6
<PAGE>
Upon the issuance of a Registered Global Security, the Debt Depositary for such
Registered Global Security will credit, on its book-entry registration and
transfer system, the participants' accounts with the respective principal
amounts of the Debt Securities represented by such Registered Global Security
beneficially owned by such participants. Ownership of beneficial interests in
such Registered Global Security will be shown on, and the transfer of such
ownership interest will be effected only through, records maintained by the Debt
Depositary for such Registered Global Security (with respect to interests of
participants) and on the records of participants (with respect to interests of
persons holding through participants). The laws of some states may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to own,
transfer or pledge beneficial interests in Registered Global Securities.
So long as the Debt Depositary for a Registered Global Security, or its
nominee, is the registered owner of such Registered Global Security, such Debt
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Debt Securities represented by such Registered Global
Security for all purposes under the Indenture. Each person owning a beneficial
interest in a Registered Global Security must rely on the procedures of the Debt
Depositary for such Registered Global Security and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder under the Indenture.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Registered Global Security registered in the name of a Debt
Depositary or its nominee will be made to such Debt Depositary or its nominee,
as the case may be, as the registered owner of such Registered Global Security.
None of the Company, the Trustee or any other agent of the Company or agent of
the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Registered Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Senior Debt
The Debt Securities that will be designated and will constitute part of the
Senior Indebtedness (hereinafter defined) of the Company, will rank pari passu
with all other unsecured and unsubordinated debt of the Company.
Subordinated Debt
The Debt Securities that will constitute part of the subordinated debt of the
Company (the "Subordinated Debt Securities"), will be subordinated in right of
payment, as set forth in the Indenture, to the prior payment in full of all
existing and future Senior Indebtedness of the Company. "Senior Indebtedness"
means the principal of (and premium, if any) and interest on (including interest
accruing after the filing of a petition initiating any proceeding pursuant to
any Bankruptcy Law, but only to the extent allowed or permitted to the holder of
such Indebtedness against the bankruptcy or any other insolvency estate of the
Company in such proceeding) or accrued Original Issue Discount on and other
amounts due on or in connection with any Indebtedness incurred, assumed or
guaranteed by the Company, whether outstanding on the date of the Indenture or
thereafter incurred, assumed or guaranteed, and all renewals, extensions and
refunding of any such Indebtedness; provided, however, that the following will
not constitute Senior Indebtedness: (a) any Indebtedness which expressly
provides (i) that such Indebtedness shall not be senior in right of payment to
the Subordinated Debt Securities or (ii) that such Indebtedness shall be
subordinated to any other Indebtedness of the Company, unless such Indebtedness
expressly provides that such Indebtedness shall be senior in right of payment to
the Subordinated Debt Securities; (b) any Indebtedness or liability for
compensation to employees, for goods or materials purchased in the ordinary
course of business or for services; (c) any Indebtedness of the Company to any
Subsidiary for money borrowed or advanced from such Subsidiary; and (d) any
liability for federal, state, local or other taxes owed or owing by the Company.
"Indebtedness" means any and all obligations of a corporation for money borrowed
which in accordance with generally accepted accounting principles would be
reflected on the balance sheet of such corporation as a liability on the date as
of which Indebtedness is to be determined.
By reason of the subordination described herein, in the event of insolvency,
upon any distribution of the assets of the Company, (i) the Holders of the
Subordinated Debt Securities are required to pay over their share of such
distribution to the trustee in bankruptcy, receiver or other person distributing
the assets of the Company for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all holders of
Senior Indebtedness in full and (ii) unsecured creditors of the Company who are
not Holders of Subordinated Debt Securities or Holders of Senior Indebtedness of
the Company may recover less, ratably, than Holders of Senior Indebtedness of
the Company and may recover more, ratably, than the Holders of Subordinated Debt
Securities.
In the event that the Subordinated Debt Securities are declared due and
payable prior to their Stated Maturity by reason of the occurrence of an Event
of Default, then the Company is obligated to notify promptly holders of Senior
Indebtedness of such acceleration. The Company may not pay the Subordinated
Debt Securities until 120 days have passed after such acceleration occurs and
may thereafter pay the Subordinated Debt Securities if the terms of the
Indenture otherwise permit payment at that time.
No payment of the principal amount at maturity, Issue Price plus accrued
Original Issue Discount, in the case of Original Issue Discount Securities, any
redemption price, or interest, if any, in respect of the Subordinated Debt
Securities may be made, nor may the Company otherwise acquire any Subordinated
Debt Securities except as set forth in the Indenture, if any default with
respect to Senior Indebtedness occurs and is continuing that permits the
acceleration of the maturity thereof and the Company has actual knowledge of the
default, unless (a) 120 days pass after notice of the default is given
7
<PAGE>
to the Trustee and such default is not then the subject of judicial proceedings
or the default with respect to the Senior Indebtedness is cured (including,
without limitation, by the payment of such Senior Indebtedness in full) or
waived and (b) the terms of the Indenture otherwise permit the payment or
acquisition of the Subordinated Debt Securities at that time. The Company is
required to give the Trustee notice of a default with respect to Senior
Indebtedness within five Business Days after the Company has actual knowledge of
the default.
If this Prospectus is being delivered in connection with a series of
Subordinated Debt Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Indebtedness outstanding as of the end of the most recent
fiscal quarter for which the Company has filed an Annual Report on Form 10-K or
a Quarterly Report on Form 10-Q.
Convertibility
No series of Debt Securities will be convertible into, or exchangeable for,
other securities or properties except as set forth in the applicable Prospectus
Supplement.
Certain Covenants Applicable to Senior Debt Securities
Unless otherwise set forth in the applicable Prospectus Supplement, the
following covenants will be applicable to Debt Securities that constitute Senior
Indebtedness.
Limitation on Liens. The Company will not, and will not permit any Restricted
Subsidiary to, incur, issue, assume or guarantee any Indebtedness secured by a
Lien on any Restricted Property, or on any shares of stock or Indebtedness of a
Restricted Subsidiary, without providing that the Debt Securities shall be
secured equally and ratably with (or prior to) such secured Indebtedness, unless
after giving effect thereto the aggregate amount of all such Indebtedness so
secured (other than Indebtedness secured by excepted Liens referred to in the
following sentence), together with all Attributable Debt of the Company and its
Restricted Subsidiaries in respect of Sale-Leaseback Transactions except Sale-
Leaseback Transactions the proceeds of which are applied to the retirement of
Funded Debt, would not exceed 10% of Consolidated Adjusted Net Assets as shown
on the Company's latest audited consolidated financial statements. This
restriction will not apply to (a) Liens on property of, or on any shares of
stock or Indebtedness of, any corporation existing at the time such corporation
becomes a Subsidiary, (b) Liens on property existing at the time of acquisition
thereof (including acquisition through merger or consolidation) or to secure the
payment of all or any part of the purchase price or construction cost thereof or
to secure any Indebtedness incurred prior to, at the time of, or within six
months after such acquisition or completion of such property for the purpose of
financing all or any part of the purchase price or construction cost thereof,
(c) Liens on substantially unimproved property to secure the cost of
exploration, drilling or development of, or improvements to, such property, (d)
Liens in favor of the Company or a Restricted Subsidiary, and (e) any extension,
renewal or replacement of any Lien referred to in the foregoing clauses (a)
through (d) inclusive, provided that such extension, renewal or replacement
Liens shall be limited to all or part of the same property that secured the
Liens extended, renewed or replaced (plus improvements on such property). The
following types of transactions are not deemed to create Indebtedness secured by
a Lien: (i) a sale or transfer of crude oil, natural gas or NGLs in place for a
period of time until, or in an amount such that, the purchaser will realize
therefrom a specified amount of money or of such oil, natural gas or NGLs, or
any other interest in property commonly referred to as a "production payment,"
or (ii) the Lien of any property of the Company or any Subsidiary in favor of
governmental bodies to secure partial, progress, advance or other payments to
the Company or any Subsidiary pursuant to any contract or statute, or the Lien
of any property to secure Indebtedness of the pollution control or industrial
revenue bond type.
Limitation on Sale-Leaseback Transactions. The Indenture provides that the
Company shall not, and it shall not permit any Restricted Subsidiary to, enter
into a Sale-Leaseback Transaction unless: (1) the lease has a term of three
years or less; (2) the lease is between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries; (3) the Company or a Restricted Subsidiary
could create a Lien under the terms of the Indenture on the Restricted Property
to secure Funded Debt at least equal in amount to the Attributable Debt for the
lease; or (4) the Company or a Restricted Subsidiary could create a Lien on
Restricted Property under the terms of the Indenture to secure Funded Debt at
least equal in amount to the Attributable Debt for the lease without having to
secure equally and ratably any Debt Securities that constitute Senior
Indebtedness or (5) the Company or a Restricted Subsidiary within 120 days of
the effective date of the Sale-Leaseback Transaction (i) retires Funded Debt of
the Company or of a Restricted Subsidiary at least equal in amount to the fair
value (as determined by the Company's Board of Directors) of the Restricted
Property at the time of the Sale Leaseback Transaction or (ii) if the net
proceeds of the Sale-Leaseback Transaction equal or exceed the fair value of the
Restricted Property (as determined by the Company's Board of Directors), applies
the net proceeds to fund investment in other Restricted Properties which
investments were made within 12 months prior to or subsequent to the Sale-
Leaseback transaction.
Limitation on Mergers and Sales of Assets
The Company shall not consolidate with, or merge with, or merge into any
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person unless the successor entity shall be a corporation
organized under the laws of the United States or any state or the District of
Columbia and shall expressly assume the obligations of the Company under the
Indenture. If, with respect to Debt Securities that constitute Senior
Indebtedness, upon any such consolidation, merger, conveyance or transfer of the
Company with or into any Person or of any such Subsidiary with or
8
<PAGE>
to any other Subsidiary, any Property of the Company or of any Restricted
Subsidiary or any shares of stock or indebtedness of any Restricted Subsidiary
would thereupon become subject to any Lien (other than a Lien permitted under
"Limitation on Liens" without the Company's having to secure such Debt
Securities equally and ratably), the Company will secure such Debt Securities
(together with, if the Company shall so determine, other securities ranking on a
parity with such Debt Securities) prior to all Liens other than any theretofore
existing.
Although the amount of the Company's property that will constitute a sale of
such property "substantially as an entirety" is not readily quantifiable, a
determination whether such a sale has occurred will depend on the percentage of
operating and total assets transferred, among other measurements, and other
facts and circumstances of the transaction. In any particular transaction, this
determination will be made by the Company and, if such a transaction occurs, the
person to which such amount of the Company's property is transferred shall enter
into a supplemental Indenture satisfactory in form to the Trustee.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms as well as any other capitalized terms used herein for which no
definition is provided.
"Attributable Debt" means the total net amount of rent (discounted at the
rate per annum indicated in the Indenture) required to be paid during the
remaining term of any lease.
"Consolidated Adjusted Net Assets" means the total amount of assets after
deducting therefrom (a) all current liabilities (excluding any thereof which are
by their terms extendible or renewable at the option of the obligor thereon to a
time more than 12 months after the time as of which the amount thereof is being
computed), and (b) total prepaid expenses and deferred charges.
"Funded Debt" means, with respect to any Person, all Indebtedness having a
maturity of more than 12 months from the date as of which the amount thereof is
to be determined or having a maturity of less than 12 months but by its terms
being renewable or extendible beyond 12 months from such date at the option of
such Person.
"Restricted Property" means (a) any interest in property located in the
United States, Puerto Rico or Canada (including any interest in property located
off the coast of the United States operated pursuant to leases from any
governmental body) which is producing crude oil, natural gas or NGLs in paying
quantities, or (b) any manufacturing plant or transportation or storage facility
located in the United States, Puerto Rico or Canada, in each case now owned or
hereafter acquired by the Company or a Restricted Subsidiary except any such
plant or facility or portion thereof which has a book value equal to not more
than 2% of the Consolidated Adjusted Net Assets of the Company as shown on the
Company's latest audited consolidated balance sheet.
"Restricted Subsidiary" means a corporation (a) organized under the laws of
the United States, Puerto Rico or Canada or a jurisdiction thereof, (b) that
conducts substantially all of its business and has substantially all of its
Property within the United States, Puerto Rico and Canada, and (c) at least 80%
(by number of votes) of each class of Voting Stock of which and 100% of all
other Capital Stock and all other securities convertible into, exchangeable for,
or representing the right to purchase, Voting Stock, of which are legally and
beneficially owned by the Company and its wholly-owned Restricted Subsidiaries.
"Sale and Leaseback Transaction" means an arrangement (other than an
arrangement made for the purposes of Section 168(f) (8) of the Internal Revenue
Code) with any bank, insurance company or other lender or investor (collectively
"lenders") or to which the lender is a party where the Company or a Restricted
Subsidiary now owns or hereafter acquires a Restricted Property, transfers it to
a lender, or to any person to whom funds have been or are to be advanced by a
lender on the security of such Restricted Property on the rental payments under
the lease, and leases it back from the lender or other person.
"Subsidiary" means, at any time, a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries or by the Company and one or more
other Subsidiaries.
Events of Default
The following are Events of Default under the Indenture with respect to Debt
Securities of any series: (a) failure to pay principal of or premium, if any,
on any Debt Security of that series at its Maturity (in the case of any
Subordinated Debt Securities, whether or not payment is prohibited by the
provisions described under "Subordinated Debt"); (b) failure to pay any interest
on any Debt Security of that series when due, continued for 30 days (in the case
of any Subordinated Debt Securities, whether or not payment is prohibited by the
provisions described under "Subordinated Debt"); (c) failure to deposit any
sinking fund payment, when due, in respect of any Debt Security of that series
(in the case of any Subordinated Debt Securities, whether or not payment is
prohibited by the provisions described under "Subordinated Debt"); (d) any other
defaults in the performance, or breach, of any covenant of the Company in the
Indenture, continued for 90 days after notice of such default or breach from the
Trustee or the Holders of at least 25% in principal amount of the Outstanding
Debt
9
<PAGE>
Securities of that series (other than a covenant included in the Indenture
solely for the benefit of any series of Debt Securities other than that series);
(e) certain events of bankruptcy, insolvency or reorganization; and (f) any
other Event of Default provided with respect to Debt Securities of that series.
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the Trustee or the Holders of at
least 25% in principal amount of the Outstanding Debt Securities of that series
may declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) of all Debt Securities of that series
to be due and payable immediately. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of Outstanding Debt Securities of that
series may, under certain circumstances, rescind and annul such acceleration.
Notwithstanding the foregoing, if any Subordinated Debt Securities are declared
due and payable prior to their Stated Maturity by reason of the occurrence of an
Event of Default, the Company may not pay the Subordinated Debt Securities until
120 days have passed after such acceleration occurs and may thereafter pay the
Subordinated Debt Securities if the terms of the Indenture otherwise permit
payment at the time. See "Subordinated Debt." For information as to waiver of
defaults, see "Modification and Waiver."
The Indenture provides that, subject to the provisions of the Trust Indenture
Act of 1939, as amended, the Trustee will be under no obligation to exercise any
of its rights or powers under the Indenture at the request or direction of any
of the Holders, unless such Holders shall have offered to the Trustee reasonable
indemnity. Subject to such provisions for indemnification of the Trustee, the
Holders of a majority in principal amount of the Outstanding Debt Securities
of any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Debt Securities
of that series.
The Company will be required to furnish annually to the Trustee a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
Modification and Waiver
Modifications and amendments to the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Debt Securities of each series affected thereby; provided, however, that no
such modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on, any Debt
Security, (b) reduce the principal amount of, or the premium, if any, or
interest, if any, on, any Debt Security, (c) reduce the amount of principal of
any Original Issue Discount Security payable upon acceleration of the Maturity
thereof, (d) change the coin or currency in which any Debt Securities or
premium, if any, or interest, if any, thereon is payable, (e) in the case of
convertible Debt Securities, adversely affect the right to convert any Debt
Security, or (f) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of the Holders of which is required for
(i) modification or amendment of the Indenture, (ii) in the case of any
Subordinated Debt Securities, modification of the subordination provisions in a
manner adverse to the Holders of the Subordinated Debt Securities, (iii) waiver
of compliance with certain provisions of the Indenture, or (iv) waiver of
certain defaults.
Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of any Holder to evidence a successor to the
Company, to add to the Company's covenants or Events of Default, to permit or
facilitate Debt Securities to be issued by book entry or in bearer form or
relating to the place of payment thereof, to provide for a successor trustee, to
establish forms or terms of Debt Securities, to change or eliminate any
provision not adversely affecting any interests of Holders of Outstanding Debt
Securities in any material respect or to cure any ambiguity or inconsistency.
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Indenture. The Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
may on behalf of the Holders of all Debt Securities of that series waive any
past default under the Indenture with respect to Debt Securities of that series,
except a default in the payment of the principal of, or premium, if any, or
interest, if any, on, any Debt Security of that series or in respect of any
provision which under the Indenture cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of that series affected.
Defeasance
The following provisions of the Indenture are applicable to the Debt
Securities. The Company (a) shall be discharged from its obligations in respect
of the Debt Securities of such series ("defeasance and discharge"), or (b) may
cease to comply with certain restrictive covenants ("covenant defeasance")
including those described under "Certain Covenants" and "Limitations on Mergers
and Sales of Assets" and, in the case of any Subordinated Debt Securities, the
provisions described under "Subordinated Debt," and any such omission shall not
be an Event of Default with respect to the Debt Securities of such series, in
each case at any time prior to the Stated Maturity or redemption thereof, when
the Company has irrevocably deposited with the Trustee, in trust, (i) sufficient
funds in the currency or currency unit in which the Debt Securities are
denominated to pay the principal of (and premium, if any), and interest to
Stated Maturity (or redemption) on, the Debt Securities of such series, or (ii)
such amount of direct obligations of, or obligations the principal of and
interest on which
10
<PAGE>
are fully guaranteed by, the government which issued the currency in which the
Debt Securities are denominated, and which are not subject to prepayment,
redemption or call, as will, together with the predetermined and certain income
to accrue thereon without consideration of any reinvestment thereof, be
sufficient to pay when due the principal of (and premium, if any), and interest
to Stated Maturity (or redemption) on, the Debt Securities of such series. Such
defeasance and discharge and covenant defeasance are conditioned upon, among
other things, the Company's delivery of (i) an opinion of counsel that the
Holders of the Debt Securities will not recognize income, gain or loss for
United States federal income tax purposes as a result of such defeasance, and
will be taxed in the same manner as if no defeasance and discharge or covenant
defeasance, as the case may be, had occurred and (ii) an opinion of counsel that
such defeasance would not cause the Debt Securities to be delisted from any
national securities exchange on which such Debt Securities may then be listed.
Upon such defeasance and discharge, the Holders of the Debt Securities of such
series shall no longer be entitled to the benefits of the Indenture, except for
the purposes of registration of transfer and exchange of the Debt Securities of
such series and replacement of lost, stolen or mutilated Debt Securities and
shall look only to such deposited funds or obligations for payment.
The Trustee
The Company may have customary banking relationships with the Trustee in the
ordinary course of business.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue up to 100,000,000 shares of Common Stock,
par value $.10 per share, and up to 10,000,000 shares of Preferred Stock, par
value $.10 per share. As of June 30, 1994, there were 25,695,957 shares of
Common Stock outstanding. The Company also had outstanding on such date the
following series of Preferred Stock: 400,000 shares of 7.25% Cumulative Senior
Perpetual Convertible Preferred Stock with a liquidation preference of $100 per
share (the "7.25% Convertible Preferred Stock"), 1,400,000 shares of $2.28
Cumulative Preferred Stock with a liquidation preference of $25 per share (the
"$2.28 Preferred Stock") and 2,760,000 shares of $2.625 Cumulative Convertible
Preferred Stock with a liquidation preference of $50 per share (the "$2.625
Convertible Preferred Stock"). Unless otherwise provided in any Prospectus
Supplement for a series of Preferred Stock offered hereby (the "Offered
Preferred Stock"), the 7.25% Convertible Preferred Stock, the $2.28 Preferred
Stock, and the $2.625 Convertible Preferred Stock (collectively, the "Existing
Preferred Stock") will rank on a parity with the Offered Preferred Stock.
The Board of Directors of the Company has the power, without further action
by the stockholders unless action is required by applicable laws or regulations
or by the terms of any outstanding Preferred Stock, including the 7.25%
Convertible Preferred Stock, to issue Preferred Stock in one or more series and
to fix the designations, preferences and voting rights, and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions applicable thereto. The rights of holders of any
Offered Preferred Stock will be subject to, and may be adversely affected by,
the rights of holders of any Preferred Stock which may be issued in the future.
The Board of Directors may cause Preferred Stock to be issued to obtain
additional financing, in connection with acquisitions and for other proper
corporate purposes. Issuance of shares of Preferred Stock by the Company may
have the effect, under certain circumstances, alone or in combination with
certain of the provisions of the Company's Certificate of Incorporation, as
amended (the "Certificate of Incorporation"), described below, of rendering more
difficult or discouraging an acquisition of the Company deemed undesirable by
the Board of Directors.
The following summary does not purport to be complete and is, subject to, and
qualified in its entirety by, the Company's Certificate of Incorporation,
including the Certificate of Designation, Preferences and Rights of the 7.25%
Convertible Preferred Stock, the Certificate of Designation of the $2.28
Preferred Stock and the Certificate of Designation of the $2.625 Convertible
Preferred Stock.
Offered Preferred Stock
The following is a description of certain general terms and provisions of the
Offered Preferred Stock. The particular terms of any series of Offered
Preferred Stock will be described in the applicable Prospectus Supplement. If
so indicated in a Prospectus Supplement, the terms of any such series may differ
from the terms set forth below. The summary of terms of the Company's Offered
Preferred Stock contained in this Prospectus does not purport to be complete and
is subject to, and qualified in its entirety by, the provisions of the Company's
Certificate of Incorporation and the Certificate of Designation relating to a
specific series of the Offered Preferred Stock (the "Certificate of
Designation"), which will be in the form filed as an exhibit to or incorporated
by reference in the Registration Statement of which this Prospectus is a part at
or prior to the time of issuance of such series of Offered Preferred Stock.
The Board of Directors of the Company has authorized the issuance in series
of up to 5,440,000 additional shares of Preferred Stock and has authorized a
committee of the Board of Directors (the "Committee") to establish and designate
series and fix the number of shares and the relative rights, preferences and
limitations of the respective series of Offered Preferred Stock (except for
voting rights of the Offered Preferred Stock, which will be established by the
Board of Directors). The Board of Directors or the Committee shall be
authorized to determine for each series of Offered Preferred Stock, and the
Prospectus Supplement shall set forth with respect to such series: (i) the
number of shares that constitute such series, (ii) the dividend rate (or the
method of calculation thereof) on the shares of such series, (iii) the dividend
periods (or the method of calculation thereof), (iv) the voting rights of the
shares, (v) the liquidation preference and any other rights of the shares
11
<PAGE>
of such series upon any liquidation or winding-up of the Company, (vi) whether
or not and on what terms the shares of such series will be subject to redemption
at the option of the Company, (vii) whether and on what terms the shares of such
series will be convertible into shares of Common Stock of the Company, (viii)
whether depositary shares representing shares of such series of Preferred Stock
will be offered and, if so, the fraction of a share of such series of Offered
Preferred Stock represented by each depositary share (see "Depositary Shares"
below), (ix) whether the shares of such series of Offered Preferred Stock will
be listed on a securities exchange and (x) the other rights and privileges and
any qualifications, limitations or restrictions of such rights or privileges of
such series.
Dividends
Holders of shares of Offered Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors out of funds of the Company
legally available therefor, an annual cash dividend payable at such dates and at
such rates per share per annum as set forth in the applicable Prospectus
Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, each
series of Offered Preferred Stock will be junior as to dividends to any
Preferred Stock that may be issued in the future that is expressly senior as to
dividends to the Offered Preferred Stock. If at any time the Company has failed
to pay accrued dividends on any such senior shares at the time such dividends
are payable, the Company may not pay any dividend on the Offered Preferred Stock
or redeem or otherwise repurchase shares of Offered Preferred Stock until such
accumulated but unpaid dividends on such senior shares have been paid or set
aside for payment in full by the Company.
No dividends may be declared or paid or set apart for payment on any
Preferred Stock, including the Existing Preferred Stock, ranking on parity as to
dividends with the Offered Preferred Stock unless there shall also be or have
been declared and paid or set apart for payment on the outstanding shares of
Offered Preferred Stock dividends for all dividend payment periods of the
Offered Preferred Stock ending on or before the dividend payment date of such
parity Preferred Stock, ratably in proportion to the respective amounts of
dividends, (i) accumulated and unpaid or payable on such parity Preferred Stock,
on the one hand, and (ii) accumulated and unpaid or payable through the dividend
payment period of the Offered Preferred Stock next preceding such dividend
payment date, on the other hand. Except as set forth above, dividends (other
than in Common Stock) may not be paid or declared and set aside for payment and
other distributions may not be made upon the Common Stock or on any other
Preferred Stock of the Company ranking junior to or on parity as to dividends
with the Offered Preferred Stock, including the Existing Preferred Stock, nor
may any Common Stock or such other Preferred Stock of the Company be redeemed,
purchased or otherwise acquired by the Company for any consideration or any
payment be made to or available for a sinking fund for the redemption of any
shares of such stock; provided, however, that any monies theretofore deposited
in any sinking fund with respect to any Preferred Stock in compliance with the
provisions of such sinking fund may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund, regardless of whether at the time of such application full cumulative
dividends upon shares of the Offered Preferred Stock outstanding on the last
dividend payment date shall have been paid or declared and set apart for
payment; and provided, further, that any such junior or parity Preferred Stock
or Common Stock may be converted into or exchanged for stock of the Company
ranking junior to the Offered Preferred Stock as to dividends.
The amount of dividends payable for the initial dividend period or any period
shorter than a full dividend period shall be computed on the basis of a 360-day
year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
Convertibility
No series of Offered Preferred Stock will be convertible into, or
exchangeable for, other securities or property except as set forth in the
applicable Prospectus Supplement.
Redemption and Sinking Fund
No series of Offered Preferred Stock will be redeemable or receive the
benefit of a sinking fund except as set forth in the applicable Prospectus
Supplement.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of the Company,
the holders of shares of each series of Offered Preferred Stock are entitled to
receive out of assets of the Company available for distribution to stockholders,
before any distribution of assets is made to holders of: (i) any other shares of
Preferred Stock ranking junior to such series of Offered Preferred Stock as to
rights upon liquidation, dissolution or winding up and (ii) Common Stock,
liquidating distributions per share in the amount of the liquidation preference
specified in the applicable Prospectus Supplement for such series of Offered
Preferred Stock plus dividends accrued and accumulated but unpaid to the date of
final distribution; but the holders of each series of Offered Preferred Stock
will not be entitled to receive the liquidating distribution of, plus such
dividends on, such shares until the liquidation preference of any shares of the
Company's capital stock ranking senior to such series of the Offered Preferred
Stock as to the rights upon liquidation, dissolution or winding up shall have
been paid (or a sum set aside therefor sufficient to provide for payment) in
full. If upon any liquidation, dissolution or winding up of the Company, the
amounts payable with respect to the Offered Preferred Stock, the Existing
Preferred Stock and any other Preferred Stock ranking as to any such
distribution on a parity with the Offered Preferred Stock are not paid in full,
the holders of the Offered Preferred Stock, the Existing Preferred Stock and
such other parity Preferred Stock will share ratably
12
<PAGE>
in any such distribution of assets in proportion to the full respective
preferential amount to which they are entitled. Unless otherwise specified in a
Prospectus Supplement for a series of Offered Preferred Stock, after payment of
the full amount of the liquidating distribution to which they are entitled, the
holders of shares of Offered Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Company. Neither a
consolidation or merger of the Company with another corporation nor a sale of
securities shall be considered a liquidation, dissolution or winding up the
Company.
Voting Rights
Holders of Offered Preferred Stock will not have any voting right except as
set forth below or in the applicable Prospectus Supplement or as otherwise from
time to time required by law. Whenever dividends on any applicable series of
Offered Preferred Stock or any other class or series of stock ranking on a
parity with the applicable series of Offered Preferred Stock (excluding the
7.25% Convertible Preferred Stock) with respect to the payment of dividends
shall be in arrears for dividend periods, whether or not consecutive containing
in the aggregate a number of days equivalent to six calendar quarters, the
holders of shares of such series of Offered Preferred Stock (voting separately
as a class with all other series of Preferred Stock, other than the 7.25%
Convertible Preferred Stock, upon which like voting rights have been conferred
and are exercisable) will be entitled to vote for the election of two of the
authorized number of directors of the Company at the next annual meeting of
stockholders and at each subsequent meeting until all dividends accumulated on
such series of Offered Preferred Stock shall have been fully paid or set apart
for payment. The term of office of all directors elected by the holders of such
Offered Preferred Stock shall terminate immediately upon the termination of the
right of the holders of such Offered Preferred Stock to vote for directors.
Unless otherwise set forth in the applicable Prospectus Supplement, holders of
shares of Offered Preferred Stock will have one vote for each share held.
So long as any shares of any series of Offered Preferred Stock remain
outstanding, the Company shall not, without the consent of holders of at least
two-thirds of the shares of such series of Offered Preferred Stock outstanding
at the time, voting separately as a class with all other series of Preferred
Stock (excluding the 7.25% Convertible Preferred Stock) upon which like voting
rights have been conferred and are exercisable, (i) issue or increase the
authorized amount of any class or series of stock ranking prior to the
outstanding Offered Preferred Stock as to dividends or upon liquidation or (ii)
amend, alter or repeal the provisions of the Company's Certificate of
Incorporation or of the resolutions contained in the Certificate of Designation
relating to such series of Offered Preferred Stock, whether by merger,
consolidation or otherwise, so as to materially adversely affect any power,
preference or special right of such series of Offered Preferred Stock or the
holders thereof; provided, however, that any increase in the amount of the
authorized Common Stock or authorized Preferred Stock or any increase or
decrease in the number of shares of any series of Preferred Stock or the
creation and issuance of other series of Common Stock or Preferred Stock ranking
on a parity with or junior to Preferred Stock as to dividends and upon
liquidation, dissolution or winding up shall not be deemed to materially
adversely affect such powers, preferences or special rights.
Miscellaneous
The holders of Offered Preferred Stock will have no preemptive rights.
Offered Preferred Stock, upon issuance against full payment of the purchase
price therefor, will be fully paid and nonassessable. Shares of Offered
Preferred Stock redeemed or otherwise reacquired by the Company shall resume the
status of authorized and unissued shares of Offered Preferred Stock undesignated
as to series, and shall be available for subsequent issuance. There are no
restrictions on repurchase or redemption of the Offered Preferred Stock while
there is any arrearage on sinking fund installments except as may be set forth
in a applicable Prospectus Supplement. Neither the par value nor the
liquidation preference is indicative of the price at which the Offered Preferred
Stock will actually trade on or after the date of issuance. Payment of
dividends on any series of Offered Preferred Stock may be restricted by loan
agreements, indentures and other transactions entered into by the Company. The
accompanying Prospectus Supplement or information incorporated by reference will
describe any material contractual restrictions on dividend payments.
No Other Rights
The shares of a series of Offered Preferred Stock will not have any
preferences, voting powers or relative, participating, optional or other special
rights except as set forth above or in the applicable Prospectus Supplement, the
Certificate of Incorporation or Certificate of Designation or as otherwise
required by law.
Transfer Agent and Registrar
The transfer agent and registrar for each series of Offered Preferred Stock
will be designated in the applicable Prospectus Supplement.
Depositary Shares
General
The Company may, at its option, elect to offer fractional shares of the
Offered Preferred Stock, rather than full shares of the Offered Preferred Stock.
In the event such option is exercised, the Company will issue receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of Offered Preferred
Stock) of a share of a particular series of Preferred Stock as described below.
13
<PAGE>
The shares of any series of Offered Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
among the Company, a depositary to be named in the applicable Prospectus
Supplement (the "Preferred Stock Depositary"), and the holders from time to time
of depositary receipts issued thereunder. Subject to the terms of the Deposit
Agreement, each holder of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Offered Preferred Stock represented by
such Depositary Share, to all the rights and preferences of the Offered
Preferred Stock represented thereby (including dividend, voting, redemption,
subscription and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of the
related series of Offered Preferred Stock. Copies of the forms of Deposit
Agreement and Depositary Receipt are filed as an exhibit to the Registration
Statement of which this Prospectus is a part, and the following summary is
qualified in its entirety by reference to such exhibit. Immediately following
the issuance of shares of a series of Offered Preferred Stock by the Company,
the Company will deposit such shares with the Preferred Stock Depositary, which
will then issue and deliver the Depositary Receipts to the purchasers thereof.
Depositary Receipts will only be issued evidencing whole Depositary Shares. A
Depositary Receipt may evidence any number of whole Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
Dividends and Other Distributions
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the related series of Offered
Preferred Stock to the record holders of Depositary Shares relating to such
series of Offered Preferred Stock in proportion to the number of such Depositary
Shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of Depositary
Shares owned by such holders, unless the Preferred Stock Depositary determines
that such distribution cannot be made proportionately among such holders or
that it is not feasible to make such distributions, in which case the Preferred
Stock Depositary may, with the approval of the Company, adopt such method as it
deems equitable and practicable for the purpose of effecting such distribution,
including the sale (at public or private sale) of the Securities or property
thus received, or any part thereof, at such place or places and upon such terms
as it may deem proper.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Preferred Stock Depositary
on account of taxes or other governmental charges.
Redemption of Depositary Shares
If a series of the Offered Preferred Stock underlying the Depositary Shares
is subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Preferred Stock Depositary resulting from any
redemption, in whole or in part, of such series of the Preferred Stock held by
the Preferred Stock Depositary. The redemption price per Depositary Share will
be equal to the applicable fraction of the redemption price per share payable
with respect to such series of the Offered Preferred Stock. If the Company
redeems shares of a series of Offered Preferred Stock held by the Preferred
Stock Depositary, the Preferred Stock Depositary will redeem as of the same
redemption date the number of Depositary Shares representing the 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
substantially equivalent method determined by the Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares. Any funds deposited by the Company with the
Preferred Stock Depositary for any Depositary Shares that the holders thereof
fail to redeem will be returned to the Company after a period of two years from
the date such funds are so deposited.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of any series of
the Offered Preferred Stock are entitled to vote, the Preferred Stock Depositary
will mail the information contained in such notice of meeting to the record
holders of the Depositary Shares relating to such series of Offered Preferred
Stock. Each record holder of such Depositary Shares on the record date (which
will be the same date as the record date for the related series of Offered
Preferred Stock) will be entitled to instruct the Preferred Stock Depositary as
to the exercise of the voting rights pertaining to the number of shares of the
series of Offered Preferred Stock represented by such holder's Depositary
Shares. The Preferred Stock Depositary will endeavor, insofar as practicable,
to vote or cause to be voted the number of shares of the Preferred Stock
represented
14
<PAGE>
by such Depositary Shares in accordance with such instructions, provided the
Offered Preferred Stock Depositary receives such instructions sufficiently in
advance of such meeting to enable it to so vote or cause to be voted the shares
of Offered Preferred Stock, and the Company will agree to take all reasonable
action that may be deemed necessary by the Preferred Stock Depositary in order
to enable the Preferred Stock Depositary to do so. The Preferred Stock
Depositary will abstain from voting shares of the Offered Preferred Stock to the
extent it does not receive specific instructions from the holders of Depositary
Shares representing such Offered Preferred Stock.
Withdrawal of Stock
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary and upon payment of the taxes, charges and fees
provided for in the Deposit Agreement and subject to the terms thereof, the
holder of the Depositary Shares evidenced thereby is entitled to delivery at
such office, to or upon his or her order, of the number of whole shares of the
related series of Offered Preferred Stock and any money or other property, if
any, represented by such Depositary Shares. Holders of Depositary Shares will
be entitled to receive whole shares of the related series of Offered Preferred
Stock, but holders of such whole shares of Offered Preferred Stock will not
thereafter be entitled to deposit such shares of Offered Preferred Stock with
the Preferred Stock Depositary or to receive Depositary Shares therefor. If the
Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
whole shares of the related series of Offered Preferred Stock to be withdrawn,
the Preferred Stock Depositary will deliver to such holder or upon his or her
order at the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Preferred Stock Depositary.
However, any amendment that materially adversely alters the rights of the
holders of Depositary Shares will not be effective unless such amendment has
been approved by the holders of at least a majority of the Depositary Shares
then outstanding. Every holder of a Depositary Receipt at the time such
amendment becomes effective will be deemed, by continuing to hold such
Depositary Receipt, to be bound by the Deposit Agreement as so amended.
Notwithstanding the foregoing, in no event may any amendment impair the right of
any holder of any Depositary Shares, upon surrender of the Depositary Receipts
evidencing such Depositary Shares and subject to any conditions specified in the
Deposit Agreement, to receive shares of the related series of Offered Preferred
Stock and any money or other property represented thereby, except in order to
comply with mandatory provisions of applicable law. The Deposit Agreement may
be terminated by the Company at any time upon not less than 60 days prior
written notice to the Preferred Stock Depositary, in which case, on a date that
is not later than 30 days after the date of such notice, the Preferred Stock
Depositary shall deliver or make available for delivery to holders of Depositary
Shares, upon surrender of the Depositary Receipts evidencing such Depositary
Shares, such number of whole or fractional shares of the related series of
Offered Preferred Stock as are represented by such Depositary Shares. The
Deposit Agreement shall automatically terminate after all outstanding Depositary
Shares have been redeemed or there has been a final distribution in respect of
the related series of Offered Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Shares.
Charges of Depositary
The Company will pay all transfer and other taxes and the governmental
charges arising solely from the existence of the depositary arrangements. The
Company will pay the charges of the Preferred Stock Depositary, including
charges in connection with the initial deposit of the related series of Offered
Preferred Stock and the initial issuance of the Depositary Shares and all
withdrawals of shares of the related series of Offered Preferred Stock, except
that holders of Depositary Shares will pay other transfer and other taxes and
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
Resignation and Removal of Depositary
The Preferred Stock Depositary may resign at any time by delivering to the
Company written 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 Preferred Stock Depositary, which successor Preferred
Stock 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 $50,000,000.
15
<PAGE>
Miscellaneous
The Preferred Stock Depositary will forward to the holders of Depositary
Shares all reports and communications from the Company that are delivered to the
Preferred Stock Depositary and which the Company is required to furnish to the
holders of the Offered Preferred Stock.
Neither the Preferred Stock 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 Preferred Stock Depositary under the Deposit Agreement will be
limited to performance with best judgment and in good faith of their duties
thereunder, except that they are liable for gross negligence and willful
misconduct in the performance of their duties thereunder, and they will not be
obligated to appear in, prosecute or defend any legal proceeding in respect of
any Depositary Receipts, Depositary Shares or series of Preferred Stock unless
satisfactory indemnity is furnished. The Preferred Stock Depositary and the
Company may rely on advice of legal counsel or accountants of their choice, or
information provided by persons presenting Preferred Stock for deposit, holders
of Depositary Shares or other persons believed in good faith to be competent and
on documents believed to be genuine.
The Preferred Stock Depositary's corporate trust office will be identified in
the applicable Prospectus Supplement. Unless otherwise set forth in the
applicable Prospectus Supplement, the Preferred Stock Depositary will act as
transfer agent and registrar for Depositary Receipts and if shares of a series
of Offered Preferred Stock are redeemable, the Preferred Stock Depositary will
act as redemption agent for the corresponding Depositary Receipts.
Common Stock
The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders except as otherwise
provided by law. There are no cumulative voting rights with respect to the
election of directors. Holders of Common Stock are entitled to receive ratably
such dividends as may be declared by the Board of Directors out of legally
available funds. In the event of dissolution of the Company, they will be
entitled to share ratably in all assets remaining after payment of liabilities
and amounts owed in respect of outstanding Preferred Stock, including any
Offered Preferred Stock and the Existing Preferred Stock. Holders of Common
Stock have no preemptive rights and have no right to convert their Common Stock
into any other securities.
The transfer agent and registrar for the Common Stock is Chemical Shareholder
Services Group, Inc.
$2.625 Convertible Preferred Stock
On February 25, 1994, the Company issued 2,760,000 shares of Preferred Stock
designated the "$2.625 Cumulative Convertible Preferred Stock." Holders of the
$2.625 Convertible Preferred Stock are entitled to receive dividends quarterly
at an annual rate of $2.625 per share, when and as declared by the Board of
Directors out of funds legally available therefor. Such dividends are
cumulative.
The $2.625 Convertible Preferred Stock has a Liquidation Preference of $50
per share. Holders of $2.625 Convertible Preferred Stock are entitled, in the
event of the Company's liquidation, to share ratably in all of the Company's
assets remaining after payment of all its debts and liabilities up to the amount
of the Liquidation Preference set forth above, plus all accrued and unpaid
dividends. The rights of holders of $2.625 Convertible Preferred Stock rank upon
liquidation of the Company on a parity with the $2.28 Preferred Stock and the
7.25% Convertible Preferred Stock and will rank on a parity with the Offered
Preferred Stock and prior to the holders of the Common Stock and of any other
series of Preferred Stock which is not specifically on a parity with or senior
to the $2.625 Convertible Preferred Stock.
The $2.625 Convertible Preferred Stock is redeemable on or after February 16,
1997 at a price per share ranging from 103.675% of the Liquidation Preference on
February 16, 1997 to 100% thereof on or after February 16, 2004, plus in all
instances all accrued and unpaid dividends.
Each share of $2.625 Convertible Preference Stock is convertible into such
number of shares of Common Stock as is equal to the Liquidation Preference of
such share divided by the Conversion Price. As of the date hereof, the
Conversion Price is $39.750, subject to adjustment for stock dividends, stock
splits and other dilutive events.
Holders of $2.28 Preferred Stock have no voting rights except as set forth
below or as otherwise from time to time required by law. Whenever dividends on
the $2.28 Preferred Stock or any other class or series of stock ranking on a
parity with the $2.28 Preferred Stock (excluding the 7.25% Convertible Preferred
Stock) with respect to the payment of dividends shall be in arrears for dividend
periods, whether or not consecutive, containing in the aggregate a number of
days equivalent to six calendar quarters, the holders of shares of $2.28
Preferred Stock (voting separately as a class with all other series of Preferred
Stock, other than the 7.25% Convertible Preferred Stock, upon which like voting
rights have been conferred and are exercisable) will be entitled to vote for the
election of two of the authorized number of directors of the Company at the next
annual meeting of stockholders and at each subsequent meeting until all
dividends accumulated on the $2.28 Preferred Stock shall have been fully paid or
set apart for payment. The term of office of all directors elected by the
holders of such Preferred Stock shall terminate immediately upon the termination
of the right of the holders of such Preferred Stock to vote for directors.
Holders of shares of $2.28 Preferred Stock have one vote for each share held.
16
<PAGE>
So long as any shares of the $2.28 Preferred Stock remain outstanding, the
Company shall not, without the consent of holders of at least two-thirds of the
shares of $2.28 Preferred Stock outstanding at the time, voting separately as a
class with all other series of Preferred Stock (excluding the 7.25% Convertible
Preferred Stock) upon which like voting rights have been conferred and are
exercisable, (i) issue or increase the authorized amount of any class or series
of stock ranking prior to the outstanding $2.28 Preferred Stock as to dividends
or upon liquidation or (ii) amend, alter or repeal the provisions of the
Company's Certificate of Incorporation or of the resolutions contained in the
Certificate of Designation relating to the $2.28 Preferred Stock, whether by
merger, consolidation or otherwise, so as to materially adversely affect any
power, preference or special right of the outstanding $2.28 Preferred Stock or
the holders thereof; provided, however, that any increase in the amount of the
authorized Common Stock or authorized Preferred Stock or any increase or
decrease in the number of shares of any series of Preferred Stock or the
creation and issuance of other series of Common Stock or Preferred Stock ranking
on a parity with or junior to the $2.28 Preferred Stock as to dividends and upon
liquidation, dissolution or winding up shall not be deemed to materially
adversely affect such powers, preferences or special rights.
$2.28 Preferred Stock
On November 19, 1992, the Company authorized and issued 1,400,000 shares of
Preferred Stock designated "$2.28 Cumulative Preferred Stock." Holders of $2.28
Preferred Stock are entitled to receive dividends quarterly at an annual rate of
$2.28125 per share, when and as declared by the Board of Directors out of funds
legally available therefor. Such dividends are cumulative.
The $2.28 Preferred Stock has a liquidation preference of $25.00 per share.
Holders of $2.28 Preferred Stock are entitled, in the event of the Company's
liquidation, to share ratably in all of the Company's assets remaining after
payment of all of its debts and liabilities up to the amount of the liquidation
preference set forth above, plus all accrued and unpaid dividends. The rights
of holders of $2.28 Preferred Stock rank upon liquidation of the Company on a
parity with the $2.625 Convertible Preferred Stock and the 7.25% Convertible
Preferred Stock and will rank on a parity with the Offered Preferred Stock and
prior to those of the holders of the Common Stock and of any other series of
Preferred Stock which is not specifically on a parity with or senior to the
$2.28 Preferred Stock.
The $2.28 Preferred Stock is redeemable on or after November 15, 1997 at a
redemption price equal to $25.00 per share plus in all instances all accrued and
unpaid dividends.
Holders of $2.28 Preferred Stock have no voting rights except as set forth
below or as otherwise from time to time required by law. Whenever dividends on
the $2.28 Preferred Stock or any other class or series of stock ranking on a
parity with the $2.28 Preferred Stock (excluding the 7.25% Convertible Preferred
Stock) with respect to the payment of dividends shall be in arrears for dividend
periods, whether or not consecutive, containing in the aggregate a number of
days equivalent to six calendar quarters, the holders of shares of $2.28
Preferred Stock (voting separately as a class with all other series of Preferred
Stock, other than the 7.25% Convertible Preferred Stock, upon which like voting
rights have been conferred and are exercisable) will be entitled to vote for the
election of two of the authorized number of directors of the Company at the next
annual meeting of stockholders and at each subsequent meeting until all
dividends accumulated on the $2.28 Preferred Stock shall have been fully paid or
set apart for payment. The term of office of all directors elected by the
holders of such Preferred Stock shall terminate immediately upon the termination
of the right of the holders of such Preferred Stock to vote for directors.
Holders of shares of $2.28 Preferred Stock have one vote for each share held.
So long as any shares of the $2.28 Preferred Stock remain outstanding, the
Company shall not, without the consent of holders of at least two-thirds of the
shares of $2.28 Preferred Stock outstanding at the time, voting separately as a
class with all other series of Preferred Stock (excluding the 7.25% Convertible
Preferred Stock) upon which like voting rights have been conferred and are
exercisable, (i) issue or increase the authorized amount of any class or series
of stock ranking prior to the outstanding $2.28 Preferred Stock as to dividends
or upon liquidation or (ii) amend, alter or repeal the provisions of the
Company's Certificate of Incorporation or of the resolutions contained in the
Certificate of Designation relating to the $2.28 Preferred Stock, whether by
merger, consolidation or otherwise, so as to materially adversely affect any
power, preference or special right of the outstanding $2.28 Preferred Stock or
the holders thereof; provided, however, that any increase in the amount of the
authorized Common Stock or authorized Preferred Stock or any increase or
decrease in the number of shares of any series of Preferred Stock or the
creation and issuance of other series of Common Stock or Preferred Stock ranking
on a parity with or junior to the $2.28 Preferred Stock as to dividends and upon
liquidation, dissolution or winding up shall not be deemed to materially
adversely affect such powers, preferences or special rights.
7.25% Convertible Preferred Stock
On October 23, 1991, the Company authorized and issued 400,000 shares of
Preferred Stock designated "7.25% Cumulative Senior Perpetual Convertible
Preferred Stock." Holders of 7.25% Convertible Preferred Stock are entitled to
receive dividends quarterly at an annual rate of $7.25 per share, when and as
declared by the Board of Directors out of funds legally available therefor.
Such dividends are cumulative. In addition, if the Company declares a dividend
or makes any other distribution to holders of Common Stock, other than a Regular
Dividend (as defined), then the holders of 7.25%
17
<PAGE>
Convertible Preferred Stock shall be entitled to receive a dividend or
distribution in an amount equal to the amount of such dividend or distribution
received by a holder of the number of shares of Common Stock into which such
7.25% Convertible Preferred Stock is convertible.
The 7.25% Convertible Preferred Stock has a liquidation preference of $100
per share (the "Liquidation Preference"). Holders of 7.25% Convertible Preferred
Stock are entitled, in the event of the Company's liquidation, to share ratably
in all of the Company's assets remaining after the payment of all of its debts
and liabilities as follows: (i) if a Voluntary Liquidation Event shall have
occurred, up to an amount equal to the Optional Redemption Price (as hereinafter
defined) with respect to each share and (ii) if any other type of liquidation
event shall have occurred, the Liquidation Preference, plus in each case, all
accrued and unpaid dividends. A Voluntary Liquidation Event is generally defined
as the Company commencing a voluntary case under United States bankruptcy law or
any applicable bankruptcy, insolvency or similar law of any other country, the
Company consenting to the entry of an order for relief in an involuntary case
under any such law or the appointment of a receiver, liquidator, custodian or
other similar official of the Company or any substantial part of its property,
the Company making an assignment for the benefit of its creditors, or the
Company admitting in writing its inability to pay its debts generally as they
become due. The rights of the holders of 7.25% Convertible Preferred Stock rank
upon liquidation of the Company on a parity with the $2.625 Convertible
Preferred Stock and the $2.28 Preferred Stock and will rank on a parity with the
Offered Preferred Stock and prior to those of the holders of the Common Stock
and of any other series of Preferred Stock which is not specifically on a parity
with or senior to the 7.25% Convertible Preferred Stock.
The 7.25% Convertible Preferred Stock is redeemable on or after October 31,
1994 at a price per share ranging from 105.075% of the Liquidation Preference on
October 31, 1994 to 100% thereof on or after October 31, 2001, plus in all
instances all accrued and unpaid dividends.
Each share of 7.25% Convertible Preferred Stock is convertible into such
number of shares of Common Stock as is equal to the Liquidation Preference of
such share divided by the Conversion Price. As of the date hereof, the
Conversion Price is $19.13875, subject to adjustment for stock dividends, stock
splits and other dilutive events.
In addition to any voting rights provided by law, the holders of 7.25%
Convertible Preferred Stock are entitled to vote on all matters voted on by
holders of Common Stock voting together as a single class, with each holder of
7.25% Convertible Preferred Stock able to cast that number of votes per share
equal to the number of votes that such holder would be entitled to cast had such
holder converted his shares of 7.25% Convertible Preferred Stock into Common
Stock. In addition, the affirmative vote of the holders of at least 66 2/3% of
the outstanding shares of 7.25% Convertible Preferred Stock, voting separately
as a single class, is necessary to (i) authorize, increase the authorized number
of shares of, or issue (including on conversion or exchange of any convertible
or exchangeable securities or by reclassification), any shares of any class or
classes of capital stock that rank on a parity with or senior to (either as to
dividends or upon liquidation) to the 7.25% Convertible Preferred Stock ("Parity
Stock" and "Senior Stock", respectively), including any Offered Preferred Stock,
(ii) authorize, increase the authorized number of shares of, or issue any shares
of any class of capital stock of the Company having an optional or mandatory
redemption date earlier than January 1, 1997 or amend the terms of any class of
capital stock of the Company to provide that such class of capital stock has an
optional or mandatory redemption date earlier than January 1, 1997, (iii)
authorize, adopt or approve an amendment to the Certificate of Incorporation
that would increase or decrease the par value of the shares of 7.25% Convertible
Preferred Stock, or alter or change the powers, preferences or special rights of
the shares of 7.25% Convertible Preferred Stock, other Parity Stock or Senior
Stock, (iv) amend, alter or repeal the Certificate of Incorporation so as to
affect the shares of 7.25% Convertible Preferred Stock adversely, including,
without limitation, by granting any voting right to any holder of notes, bonds,
debentures or other debt obligations of the Company, (v) authorize or issue any
security convertible into, exchangeable for or evidencing the right to purchase
or otherwise receive any shares of any class or classes of Senior Stock or
Parity Stock, and (vi) effect the voluntary liquidation, recapitalization or
reorganization of the Company, or the consolidation or merger of the Company
with or into any other Person (except a wholly-owned subsidiary of the Company),
or the sale or other distribution to another Person of all or substantially all
of the assets of the Company except if certain conditions are satisfied. The
Company will obtain the approval of the holder of the 7.25% Convertible
Preferred Stock prior to the authorization and issuance of any Offered Preferred
Stock, except for any series of Offered Preferred Stock which will be junior to
the 7.25% Convertible Preferred Stock as to dividends or upon liquidation.
In addition, if the Company shall fail to declare or pay in full two
quarterly dividends, or to satisfy its obligation to convert or exchange shares
of 7.25% Convertible Preferred Stock or there is a breach of certain covenants
contained in the Stock Purchase Agreement pursuant to which the 7.25%
Convertible Preferred Stock was issued (the "Stock Purchase Agreement"), then
the holders of the 7.25% Convertible Preferred Stock shall have the right,
voting separately as a single class, to elect one director until such time as
all dividends have been paid, any such conversion or exchange obligation has
been satisfied or any such breach cured.
The Company has the right, at its sole option, at any time but on only one
occasion, to exchange all of the outstanding shares of 7.25% Convertible
Preferred Stock for 7.25% Convertible Subordinated Notes due October 31, 1999
(the "Convertible Notes") at a price per share equal to the Liquidation
Preference plus all accrued and unpaid dividends thereon. The Convertible Notes
will have redemption and conversion provisions substantially identical to those
of the 7.25% Convertible Preferred Stock. The Convertible Notes, if issued,
will be subordinated in right of payment to all Senior Indebtedness of the
Company, which is defined to mean substantially all indebtedness of the Company
except for such obligations that are expressly made subordinate to or pari passu
with the Convertible Notes.
18
<PAGE>
At any time on or after October 23, 1996, the holders of at least 50% of the
shares of 7.25% Convertible Preferred Stock may require the Company to exchange
all (but not less than all) of the outstanding shares of 7.25% Convertible
Preferred Stock for, at the Company's option, Common Stock or Notes (the
"Exchange Notes"), or both, at any time, during the period from the 40th day
following the date of the demand notice to the third anniversary thereof, at a
price per share equal to (i) the Liquidation Preference plus (ii) all accrued
and unpaid dividends thereon, to the applicable exchange date, with any shares
of Common Stock to be exchanged valued for such purpose at 95% of the Current
Market Price (as defined) as of the date immediately preceding the applicable
exchange date and with any Exchange Notes valued for such purpose at their face
value. The Exchange Notes will be subordinated nonconvertible notes having a
floating interest rate, a final maturity date the same as that of all other such
Exchange Notes but in any event no later than November 30, 2001 and such other
terms and conditions as shall result in a determination that such Notes have a
fair market value at least equal to their face value as of the date of their
proposed issuance.
The Stock Purchase Agreement also provides that if either or both of Brion G.
Wise, Chairman of the Board and Chief Executive Officer, and Bill M. Sanderson,
Chief Operating Officer, propose to sell or transfer 20% or more of the shares
of Common Stock that they collectively own at such time (subject to certain
exceptions), so long as The 1818 Fund, L.P. (but not its transferees) holds
shares of Common Stock or shares of 7.25% Convertible Preferred Stock or
Convertible Notes which would constitute, on conversion or exchange, 750,000 or
more shares of Common Stock (subject to appropriate adjustment), The 1818 Fund,
L.P. may participate in such sale or transfer on the same terms as those offered
to Messrs. Wise and Sanderson on a pro rata basis.
Registration Rights
The Company has a registration rights agreement with certain principal
stockholders (which does not include The 1818 Fund, L.P.) granting them the
right to require the Company to effect one registration of any or all of their
Common Stock at their expense. In addition, they have the right to have any or
all of such Common Stock included, at their pro rata expense, in any
registration statement relating to the Common Stock filed by the Company,
subject to the right of the underwriter of that offering to limit the number of
shares of such Common Stock to be included in that registration.
In connection with the issuance of the 7.25% Convertible Preferred Stock, the
Company entered into a registration rights agreement with The 1818 Fund, L.P.
The 1818 Fund, L.P. has the right to require the Company to effect three
registrations of the shares of 7.25% Convertible Preferred Stock, the shares of
Common Stock issuable upon conversion or exchange of either the 7.25%
Convertible Preferred Stock or the Convertible Notes, under certain
circumstances, the Convertible Notes and certain other shares of Common Stock
owned by The 1818 Fund, L.P. In addition, The 1818 Fund, L.P. has the right to
have such securities included in any registration statement relating to the
Common Stock filed by the Company, subject to the right of the underwriter of
that offering to limit the number of such shares to be included in that
registration statement. The Company will pay all expenses in connection with
such registration (excluding any underwriting discounts or commissions).
In November 1993, in connection with the registration of certain of the
Securities under the Securities Act, at the request of The 1818 Fund, L.P., the
Company registered for sale, from time to time, by The 1818 Fund, L.P. (i)
400,000 shares of the 7.25% Convertible Preferred Stock and (ii) 2,390,000
shares of Common Stock, including the 2,090,000 shares of Common Stock (subject
to anti-dilution adjustments) issuable upon conversion of the 7.25% Convertible
Preferred Stock. As of the date hereof, none of such shares has been sold. See
"Available Information."
Certain Provisions of Certificate of Incorporation and Delaware Law
The Company's Certificate of Incorporation contains certain provisions that
may have an effect of delaying, deferring or preventing a change of control of
the Company. First, the Certificate of Incorporation provides that the Board
shall consist of three classes of Directors, each serving a three-year term
ending in a successive year. This provision would make it more difficult to
effect a takeover of the Company because it would generally take two annual
meetings of stockholders for an acquiring party to elect a majority of the
Board. As a result, the classified Board may discourage proxy contests for the
election of Directors or purchases of a substantial block of stock because it
could operate to prevent obtaining control of the Board in a relatively short
period of time.
In addition, the Certificate of Incorporation provides that the holders of a
minimum of 60% of the Company's capital stock entitled to vote on a matter (or
such higher percentage as may otherwise be required) may take action thereon
without a meeting by executing a written consent or consents. This increases
the percentage that would otherwise be required under Delaware law to take
certain actions by written consent, and thus may make it more difficult to
effect a takeover of the Company involving certain transactions, such as a
merger or sale of assets, by requiring a potential acquirer to obtain a higher
percentage of the Company's voting securities or hold a stockholders meeting
before such a transaction could be consummated.
The Company is subject to Section 203 of the Delaware General Corporation
Law, which provides for restrictions on business combinations (as defined
therein) with interested persons (any person who acquires 15% or more of the
Company's outstanding voting stock). In general, the Company is prohibited from
engaging in business combinations with an interested person for a period of
three years from the date a person becomes an interested person, subject to
certain exceptions. By restricting the ability of the Company to engage in
business combinations with an interested person, the application of Section 203
to the Company may provide a barrier to hostile or unwanted takeovers. Certain
principal stockholders of the Company
19
<PAGE>
became interested persons under Section 203 upon their acquisitions of Common
Stock either in December 1989 or in May 1991, but because the Board approved
both acquisitions, none of them (acting alone or together) is prohibited from
engaging in a business combination with the Company.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in any of, or any
combination of, the following ways: (i) directly to purchasers, (ii) through
agents, (iii) through underwriters and (iv) through dealers.
Offers to purchase Securities may be solicited directly by the Company or by
agents designated by the Company from time to time. Any such agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act of
1933, involved in the offer or sale of the Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the accompanying Prospectus
Supplement. Unless otherwise indicated in the accompanying Prospectus
Supplement, any such agent will be acting in a best efforts basis for the period
of its appointment (ordinarily five business days or less).
If an underwriter or underwriters are utilized in the sale, the Company will
execute an underwriting agreement with such underwriters at the time of sale to
them and the names of the underwriters and the terms of the transaction will be
set forth in the accompanying Prospectus Supplement, which will be used by the
underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale. The
name of the dealer and the terms of the transaction will be set forth in the
accompanying Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered are set forth in the accompanying Prospectus Supplement.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Debt Securities, Preferred Stock, Depositary Shares and any
Common Stock issuable upon conversion of any of the foregoing, if any, offered
hereby, will be passed upon for the Company by Skadden, Arps, Slate, Meagher &
Flom, 919 Third Avenue, New York, New York 10022.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of the Company for the year ended December 31, 1993
have been so incorporated in reliance on the reports of Price Waterhouse,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth estimated expenses and costs (other than under-
writing discounts and commissions) expected to be incurred in connection with
the issuance and distribution of the securities registered hereby:
<TABLE>
<S> <C>
SEC registration fee.......................... $ 47,586
Printing costs................................ 110,000
Legal fees and expenses....................... 100,000
Accounting fees and expenses.................. 15,000
Blue sky fees and expenses.................... 20,000
Trustee's fees................................ 10,000
Fees of rating agencies....................... 20,000
Miscellaneous................................. 20,000
--------
Total........................................ $342,586
========
</TABLE>
Item 15. Indemnification of Directors and Officers
The Company's Bylaws incorporate substantially the provisions of the General
Corporation Law of the State of Delaware providing for indemnification of
directors, officers, employees and agents of the Company against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding arising by reason of the fact that such person
is or was an officer, director, employee, agent or controlling stockholder of
the Company. In addition, the Company is authorized to enter into
indemnification agreements with its directors and officers providing mandatory
indemnification to them to the maximum extent permissible under Delaware law.
As permitted under Delaware law, the Company's Certificate of Incorporation
provides for the elimination of the personal liability of a director to the
corporation and its stockholders for monetary damages arising from a breach of
the director's fiduciary duty of care. The provision is limited to monetary
damages, applies only to a director's actions while acting within his capacity
as a director, and does not entitle the Company to limit director liability for
any judgment resulting from (a) any breach of the director's duty of loyalty to
the Company or its stockholders; (b) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law; (c)
paying an illegal dividend or approving an illegal stock repurchase; or (d) any
transaction from which the director derived an improper benefit. In addition,
Section 145 of the General Corporation Law of the State of Delaware provides
generally that a person sued as a director, officer, employee or agent of a
corporation may be indemnified by the corporation for reasonable expenses,
including counsel fees, if in the case of other than derivative suits, he has
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation (and in the case of a criminal
proceeding, had no reasonable cause to believe that his conduct was unlawful).
In the case of a derivative suit, an officer, employee or agent of the
corporation who is not protected by such provisions in the Certificate of
Incorporation, may be indemnified by the corporation for reasonable expenses,
including attorneys' fees, if he has acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in the case of a
derivative suit in respect of any claim as to which an officer, employee or
agent has been adjudged to be liable to the corporation unless the Delaware
Court of Chancery or the court in which such action or suit was brought shall
determine that such person is fairly and reasonably entitled to indemnity for
proper expenses. Indemnification is mandatory in the case of a director,
officer, employee, agent or controlling stockholder who is successful on the
merits in defense of a suit against him.
Item 16. Exhibits and Financial Statement Schedules
The following exhibits are filed as part of this Registration Statement:
Exhibit
Number Description
- ------ -----------
1.1 Form of Underwriting Agreement for Debt Securities; incorporated
by reference to Exhibit 1.1 to Registrant's Registration Statement
on Form S-3 (No. 33-66516).
1.2 Form of Underwriting Agreement for Preferred Stock; incorporated by
reference to Exhibit 1.2 to Registrant's Registration Statement on
Form S-3 (No. 33-66516).
1.3 Form of Underwriting Agreement for Common Stock; incorporated by
reference to Exhibit 1.3 to Registrant's Registration Statement on
Form S-3 (No. 33-66516).
II-1
<PAGE>
Exhibit
Number Description
- ------ -----------
4.1 Form of Indenture between the Registrant and Texas Commerce Bank
National Association; incorporated by reference to Exhibit 4.1 to
Registrant's Registration Statement on Form S-3 (No. 33-66516).
4.2 Form of Certificate of Designation for Preferred Stock; incorporated
by reference to Exhibit 4.1 to Registrant's Registration Statement
on Form S-3 (No. 33-66516).
4.3 Form of Deposit Agreement; incorporated by reference to Exhibit 4.3
to Registrant's Registration Statement on Form S-3 (No. 33-66516).
4.4 Form of Depositary Receipt (included in Exhibit 4.3).
4.5 Form of Certificate of Designation for 7.25% Cumulative Senior
Perpetual Convertible Preferred Stock; incorporated by reference to
Exhibit 3.5 to Registrant's Registration Statement on Form S-1 (No.
33-43077).
4.6 Stock Purchase Agreement dated October 23, 1991 between the
Registrant and The 1818 Fund, L.P.; incorporated by reference to
Exhibit 10.19 to Registrant's Registration Statement on a Form S-1
(No. 33-43077).
4.7 Certificate of Designation for $2.625 Cumulative Convertible
Preferred Stock; incorporated by reference to Item 5 to Registrant's
Current Report on Form 8-K dated February 24, 1994.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom with respect to
certain securities that may be offered by the Registrant.
7.1 Opinion of Skadden, Arps, Slate, Meagher & Flom with respect to the
liquidation preference of Preferred Stock that may be offered by the
Registrant (included in Exhibit 5.1).
12.1 Computation of Consolidated Ratio of Earnings to Fixed Charges.
12.2 Computation of Consolidated Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom (included in
Exhibit 5.1).
23.2 Consent of Price Waterhouse; incorporated by reference to Exhibit
23.1 to Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993.
24.1 Powers of Attorney (see signature page).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Texas Commerce Bank National Association as
Trustee (bound separately); incorporated by reference to Exhibit
25.1 to Registrant's Registration Statement on Form S-3 (No.
33-66516).
- ---------
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement; (i) To include any
prospectus required by section 10(a)(3) of the Securities Act of 1933, as
amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or
events arising after the effective date of the 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 the
registration statement; (iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement:
II-2
<PAGE>
Provided, however that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") that are incorporated by reference in the
registration statement.
(2) 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 such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) 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 section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) 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 foregoing provisions, 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 such 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 such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Denver, State of Colorado, on July 15, 1994.
WESTERN GAS RESOURCES, INC.
By: /s/ BRION G. WISE
----------------------------------
Brion G. Wise, Chairman of the
Board and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints, John C. Walter and William J. Krysiak and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or resubstitute, may lawfully do or cause to be
done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement on Form S-3 has been signed by the following persons in the capacities
and on the dates indicated.
Signature Title Date
- --------- ----- ----
/S/BRION G. WISE Director, Chairman of the Board July 15, 1994
- --------------------------- and Chief Executive Officer
Brion G. Wise (Principal Executive Officer)
/S/BILL M. SANDERSON Director, President and Chief July 15, 1994
- --------------------------- Operating Officer
Bill M. Sanderson
/S/WALTER L. STONEHOCKER Director and Vice Chairman of the July 15, 1994
- --------------------------- Board
Walter L. Stonehocker
/S/DEAN PHILLIPS Director July 15, 1994
- ---------------------------
Dean Phillips
/S/WARD SAUVAGE Director July 15, 1994
- ---------------------------
Ward Sauvage
/S/RICHARD B. ROBINSON Director July 15, 1994
- ---------------------------
Richard B. Robinson
/S/JAMES A. SENTY Director July 15, 1994
- ---------------------------
James A. Senty
/S/JOSEPH E. REID Director July 15, 1994
- ---------------------------
Joseph E. Reid
/S/WALTER W. GRIST Director July 15, 1994
- ---------------------------
Walter W. Grist
/S/WILLIAM J. KRYSIAK Vice President - Controller July 15, 1994
- --------------------------- (Principal Financial and Accounting
William J. Krysiak Officer)
<PAGE>
Exhibit 5.1
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
July 26, 1994
Western Gas Resources, Inc.
12200 North Pecos Street
Denver, Colorado 80234-3439
Re: Western Gas Resources, Inc.
Registration Statement on Form S-3
Dear Gentlemen:
We have acted as special counsel to Western Gas Resources, Inc., a
Delaware corporation (the "Company"), in connection with the preparation of
the Registration Statement on Form S-3 (the "Registration Statement") to be
filed by the Company with the Securities and Exchange Commission (the
"Commission"). The Registration Statement relates to the issuance and sale
from time to time, pursuant to Rule 415 of the General Rules and Regulations
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), of the following securities of the Company with an aggregate initial
public offering price of up to $138,000,000 or the equivalent thereof in one
or more foreign currencies or composite currencies: (i) senior or subordinated
debt securities, in one or more series (the "Debt Securities"), which may be
issued under an Indenture (the "Indenture") proposed to be entered into
between the Company and Texas Commerce Bank National Association, as trustee
(the "Trustee"); (ii) shares of preferred stock, par value $.10 per share (the
"Preferred Stock"), in one or more series, which may also be issued in the
form of depositary shares (the "Depositary Shares") evidenced by depositary
receipts (the "Receipts"); and (iii) such indeterminate number of shares of
Common Stock of the Company as may be issuable upon conversion of some or all
of the Debt Securities and the Preferred Stock, including such shares of
Common Stock as may be issued pursuant to anti-dilution adjustments (the
"Indeterminate Common Stock"). The Debt Securities, the Preferred Stock, the
Depositary Shares and the Indeterminate Common Stock are collectively referred
to herein as the "Offered Securities."
This opinion is delivered in accordance with the requirements of
Items 601(b)(5) and (7) of Regulation S-K under the Securities Act.
We have examined (i) the form of Registration Statement relating to
the Offered Securities; (ii) the form of the Indenture; (iii) the form of
underwriting agreement that may be entered into between the Company
<PAGE>
and one or more underwriters to be named therein in connection with any offering
of the Debt Securities (the "Debt Underwriting Agreement"); (iv) the form of
underwriting agreement that may be entered into between the Company and one or
more underwriters to be named therein in connection with any offering of
Preferred Stock or Depositary Shares (the "Preferred Stock Underwriting
Agreement"); (v) the form of Certificate of Designation (the "Certificate of
Designation") that may be filed with the Secretary of State of the State of
Delaware with respect to a series of Preferred Stock; (vi) the form of deposit
agreement (the "Deposit Agreement") that may be entered into among the
Company, a depositary to be appointed by the Company (the "Depositary") and
the holders from time to time of Receipts issued thereunder in connection with
any offering of Depositary Shares, including the form of Receipt evidencing
the Depositary Shares included as Annex A to the Deposit Agreement; (vii) the
Certificate of Incorporation of the Company, as amended, as certified by the
Secretary of State of Delaware; (viii) the By-laws of the Company as currently
in effect; and (ix) resolutions adopted to date by the Board of Directors of
the Company (the "Board of Directors") relating to the issuance of the Offered
Securities. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and such
agreements, certificates of public officials, certificates of officers or
other representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to any facts
material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers and other representatives of the Company and
others. We have assumed that the Indenture and the Deposit Agreement will be
duly authorized, executed and delivered by the Trustee and the Depositary,
respectively, and that any Debt Securities or Receipts that may be issued will
be manually signed by duly authorized officers of the Trustee and the
Depositary, respectively. We have also assumed that the liquidation preference
of a share of the Preferred Stock will exceed the par value thereof.
Members of our firm are admitted to the Bar in the States of New York
and Delaware and we do not express
<PAGE>
any opinion as to the laws of any other jurisdiction other than the laws of the
United States of America to the extent referred to specifically herein. The
Offered Securities may be issued from time to time on a delayed or continuous
basis, and this opinion is limited to the laws, including the rules and
regulations, as in effect on the date hereof.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
2. The Indenture has been duly authorized and, when executed and
delivered by the Company, will be a valid and binding agreement, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity), (c) public policy considerations which may
limit the rights of parties to obtain further remedies, (d) the waiver
contained in Section 512 of the Indenture may be unenforceable, (e)
requirements that a claim with respect to any Debt Securities denominated
other than in United States dollars (or a judgment denominated other than in
United States dollars in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date determined pursuant
to applicable law, and (f) governmental authority to limit, delay or prohibit
the making of payments outside the United States or in foreign currency or
composition currency.
3. With respect to any series of Debt Securities (the "Offered Debt
Securities"), when (i) the Registration Statement, as finally amended
(including all necessary post-effective amendments), has become effective;
(ii) an appropriate Prospectus Supplement with respect to the Offered Debt
Securities has been prepared, delivered and filed in compliance with the
Securities Act and the applicable rules and regulations thereunder; (iii) if
the Offered Debt Securities are to be sold pursuant to a firm commitment
underwritten offering, the Debt Underwriting Agreement with respect to the
Offered Debt Securities has been duly authorized, executed and delivered by
the Company and the other parties thereto; (iv) the Board of Directors,
including any appropriate committee appointed thereby, and appropriate
officers of the Company have taken all necessary corporate action to approve
the issuance and terms of the Offered Debt Securities and related matters; (v)
the terms of the
<PAGE>
Offered Debt Securities and of their issuance and sale have been duly
established in conformity with the Indenture so as not to violate any
applicable law, the Certificate of Incorporation or By-laws of the Company or
result in a default under or breach of any agreement or instrument binding
upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the
Company; (vi) the Indenture has been duly executed and delivered by the
Company to the Trustee; and (vii) the Offered Debt Securities have been duly
executed and authenticated in accordance with the provisions of the Indenture
and duly delivered to the purchasers thereof upon payment of the agreed-upon
consideration therefor, (1) the Offered Debt Securities, when issued and sold
in accordance with the Indenture and the related Debt Underwriting Agreement,
if any, or any other duly authorized, executed and delivered applicable
purchase agreement will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except to the extent that enforcement thereof may be limited by (a)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), (c) public
policy considerations which may limit the rights of parties to obtain further
remedies, (d) the waiver contained in Section 512 of the Indenture may be
unenforceable, (e) requirements that a claim with respect to any Debt
Securities denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such claim) be
converted into United States dollars at a rate of exchange prevailing on a
date determined pursuant to applicable law, and (f) governmental authority to
limit, delay or prohibit the making of payments outside the United States or
in foreign currency or composition currency; and (2) if Common Stock is
issuable upon conversion of any convertible Offered Debt Securities, the
Indeterminate Common Stock issuable upon conversion of such Offered Debt
Securities will be duly authorized, validly issued, fully paid and
nonassessable, assuming the execution, authentication, issuance and delivery
of the Offered Debt Securities and conversion of the Offered Debt Securities
in accordance with the terms of the Indenture.
We note that, as of the date of this opinion, a judgment for money
in an action based on a Debt Security denominated in a foreign currency,
currency unit or composite currency in a federal or state court in the United
States ordinarily would be enforced in the United States only in United States
dollars. The date used to determine the rate of conversion of the foreign
currency, currency unit or composite currency in which a particular
<PAGE>
Debt Security is denominated into United States dollars will depend
upon various factors, including which court renders the judgment.
4. With respect to the shares of any series of Preferred Stock (the
"Offered Preferred Stock"), when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become
effective; (ii) an appropriate Prospectus Supplement with respect to the
shares of the Offered Preferred Stock has been prepared, delivered and filed
in compliance with the Securities Act and the applicable rules and regulations
thereunder; (iii) if the Offered Preferred Stock is to be sold pursuant to a
firm commitment underwritten offering, the Preferred Stock Underwriting
Agreement with respect to the shares of the Offered Preferred Stock has been
duly authorized, executed and delivered by the Company and the other parties
thereto; (iv) the Board of Directors, including any appropriate committee
appointed thereby, and appropriate officers of the Company have taken all
necessary corporate action to approve the issuance and terms of the shares of
the Offered Preferred Stock and related matters, including the adoption of a
Certificate of Designation for the Offered Preferred Stock; (v) the filing of
the Certificate of Designation with the Secretary of State of the State of
Delaware has duly occurred; (vi) the terms of the Offered Preferred Stock and
of their issuance and sale have been duly established in conformity with the
Company's Certificate of Incorporation including the Certificate of
Designation relating to the Offered Preferred Stock and the By-laws of the
Company so as not to violate any applicable law, the Certificate of
Incorporation or By-laws of the Company or result in a default under or breach
of any agreement or instrument binding upon the Company and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company; and (vii) certificates representing the
shares of the Offered Preferred Stock are duly executed, countersigned,
registered and delivered upon payment of the agreed-upon consideration
therefor, (1) the shares of the Offered Preferred Stock, when issued and sold
in accordance with the related Preferred Stock Underwriting Agreement or any
other duly authorized, executed and delivered applicable purchase agreement,
will be duly authorized, validly issued, fully paid and nonassessable,
provided that the consideration therefor is not less than the par value
thereof; and (2) if the Offered Preferred Stock is convertible into Common
Stock, the Indeterminate Common Stock issuable upon conversion of the Offered
Preferred Stock will be duly authorized, validly issued, fully paid and
nonassessable, assuming the execution, authentication, issuance and delivery
of the Offered
<PAGE>
Preferred Stock and the conversion of the Offered Preferred Stock in accordance
with the terms of the Certificate of Designation.
5. With respect to Depositary Shares representing fractional
interests in any Offered Preferred Stock, when (i) the Registration Statement,
as finally amended (including all necessary post-effective amendments), has
become effective; (ii) an appropriate Prospectus Supplement with respect to
the Depositary Shares has been prepared, delivered and filed in compliance
with the Securities Act and the applicable rules and regulations thereunder;
(iii) if the Depositary Shares are to be sold pursuant to a firm commitment
underwritten offering, the Preferred Stock Underwriting Agreement with respect
to the Depositary Shares has been duly authorized, executed and delivered by
the Company and the other parties thereto; (iv) the Board of Directors,
including any appropriate committee appointed thereby, and appropriate
officers of the Company have taken all necessary corporate action to approve
the issuance and terms of the Depositary Shares and related matters, including
the adoption of the Certificate of Designation for the related Offered
Preferred Stock; (v) the filing of the Certificate of Designation with the
Secretary of State of the State of Delaware has duly occurred; (vi) the
Deposit Agreement has been duly executed and delivered; (vii) the terms of the
Depositary Shares and of their issuance and sale have been duly established in
conformity with the Deposit Agreement so as not to violate any applicable law,
the Certificate of Incorporation or By-laws of the Company or result in a
default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Company; (viii) the
related Offered Preferred Stock which is represented by Depositary Shares has
been duly authorized, validly issued and delivered to the Depositary for
deposit in accordance with the laws of the States of Delaware and New York;
and (ix) the Receipts evidencing the Depositary Shares are duly issued against
the deposit of the Preferred Stock in accordance with the Deposit Agreement,
such Receipts will be validly issued and will entitle the holders thereof to
the rights specified therein and in the Deposit Agreement.
6. There is no provision in the Certificate of Incorporation or in
the Certificate of Designation which purports to restrict the surplus of the
Company by reason of the excess of the liquidation preference of the shares of
Preferred Stock over their par value. The applicable provisions of the
Delaware General Corporation Law, 8 Del. C. SECTIONS 154 and 170(a),
which define capital and surplus of a Delaware corporation available for the
payment of dividends, do not purport to restrict such surplus by reason of any
such excess. Moreover, we are
<PAGE>
not aware of any applicable provisions of the Constitution of the State of
Delaware nor any controlling Delaware case law which would suggest that
surplus would be restricted by the excess of the liquidation preference over
the par value of the shares of Preferred Stock.
Accordingly, while there are no authorities specifically addressing
this issue, it is our opinion that (i) there should be no restriction upon the
surplus of the Company available for the payment of dividends on any
outstanding capital stock of the Company solely by reason of the fact that the
liquidation preference of any shares of any series of Preferred Stock exceeds
the par value of such shares and (ii) no remedy should be available to the
holders of shares of any series of Preferred Stock before or after payment of
any dividend solely because such dividend would reduce the surplus of the
Company to an amount less than the amount of such excess, assuming that the
payment of such dividend is in accordance with the provisions of the Delaware
General Corporation Law, and of the Certificate of Incorporation including the
applicable Certificate of Designation.
We hereby consent to the filing of this opinion with the Commission
as Exhibits 5.1 and 7.1 to the Registration Statement. We also consent to the
reference to our firm under the heading "Legal Opinions" in the Registration
Statement. In giving this consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the
Securities Act or the Rules and Regulations of the Commission.
Very truly yours,
Skadden, Arps, Slate,
Meagher & Flom
<PAGE>
Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
($000s, except for ratios)
<TABLE>
<CAPTION>
Quarter Year Ended December 31,
Ended --------------------------------------------
3/31/94 1993 1992 1991 1990 1989
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Income $ 1,011 $38,102 $39,688 $20,850 $17,494 $12,714
Income Taxes 563 17,529 18,757 11,933 10,362 7,793
------- ------- ------- ------- ------- -------
Pre-tax income 1,574 55,631 58,445 32,783 27,856 20,507
Fixed charges:
Interest expense 7,880 12,972 10,449 13,022 4,322 5,726
Rentals (1/3) 341 1,218 558 85 162 97
------- ------- ------- ------- ------- -------
Total fixed charges 8,221 14,190 11,007 13,107 4,484 5,823
------- ------- ------- ------- ------- -------
Earnings before income
taxes and fixed
charges $ 9,795 $69,821 $69,452 $45,890 $32,340 $26,330
======= ======= ======= ======= ======= =======
Interest capitalized $ 289 $ 4,905 $ 2,100 $ 1,300 $ 1,400 $ 213
Total fixed charges
from above 8,221 14,190 11,007 13,107 4,484 5,823
------- ------- ------- ------- ------- -------
Total fixed charges $ 8,510 $19,095 $13,107 $14,407 $5,884 $ 6,036
======= ======= ======= ======= ======= =======
Ratio of earnings to
fixed charges 1.15 3.66 5.30 3.19 5.50 4.36
======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>
Exhibit 12.2
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
($000s, except for ratios)
<TABLE>
<CAPTION>
Quarter Year Ended December 31,
Ended --------------------------------------------
3/31/94 1993 1992 1991 1990 1989
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Income $ 1,011 $38,102 $39,688 $20,850 $17,494 $12,714
Income Taxes 563 17,529 18,757 11,933 10,362 7,793
------- ------- ------- ------- ------- -------
Pre-tax income 1,574 55,631 58,445 32,783 27,856 20,507
Fixed charges:
Interest expense 7,880 12,972 10,449 13,022 4,322 5,726
Rentals (1/3) 341 1,218 558 85 162 97
------- ------- ------- ------- ------- -------
Total fixed charges 8,221 14,190 11,007 13,107 4,484 5,823
------- ------- ------- ------- ------- -------
Earnings before income
taxes and fixed
charges $ 9,795 $69,821 $69,452 $45,890 $32,340 $26,330
======= ======= ======= ======= ======= =======
Preferred dividend
requirements (1) $ 2,207 $ 6,092 $ 3,272 $ 4,758 $ 3,105 $ 3,105
Ratio of pre-tax income
to net income 1.56 1.46 1.47 1.57 1.59 1.61
------- ------- ------- ------- ------- -------
Preferred dividend factor 3,436 8,895 4,818 7,481 4,944 5,008
Interest capitalized 289 4,905 2,100 1,300 1,400 213
Total fixed charges
from above 8,221 14,190 11,007 13,107 4,484 5,823
------- ------- ------- ------- ------- -------
Total fixed charges and
preferred dividends $11,946 $27,990 $17,925 $21,888 $10,828 $11,045
======= ======= ======= ======= ======= =======
Ratio of earnings to
combined fixed
charges and preferred
dividends 0.82 2.49 3.87 2.10 2.99 2.38
======= ======= ======= ======= ======= =======
</TABLE>
(1) In computing the ratio of earnings to combined fixed charges and preferred
stock dividends, earnings consist of income before taxes plus fixed charges.
Combined fixed charges and preferred stock dividends consists of (i) the total
of interest, whether expensed or capitalized, and one-third of rents (which is
deemed representative of an interest factor) and (ii) quarterly preference
distributions of $.45 per unit to minority interest holders in predecessor
company and since 1991, dividends on the 7.25% Cumulative Senior Perpetual
Convertible Preferred Stock and since November 1992, dividends on the $2.28
Cumulative Preferred Stock and since February 1994, dividends on the $2.625
Cumulative Convertible Preferred Stock. The ratio for the year ended December
31, 1991 includes approximately $3 million related to the prepayment in the
second quarter of 1991 of the remaining preference distributions of $1.75 per
unit to minority holders in predecessor company.
