<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1994
REGISTRATION NO. 33-52807
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
SNYDER OIL CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2306158
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
777 MAIN STREET
FORT WORTH, TEXAS 76102
(817) 338-4043
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
PETER E. LORENZEN
SNYDER OIL CORPORATION
777 MAIN STREET
FORT WORTH, TEXAS 76102
(817) 882-5905
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
<TABLE>
<S> <C>
THOMAS W. BRIGGS KERRY C. L. NORTH
KELLY, HART & HALLMAN, P.C. BAKER & BOTTS, L.L.P.
201 MAIN STREET 2001 ROSS AVENUE
FORT WORTH, TEXAS 76102 DALLAS, TEXAS 75201
(817) 332-2500 (214) 953-6500
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities 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: / /
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
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<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) PRICE(1) FEE(2)
- ------------------------------------------------------------------------------------------------------
% Step-up Convertible Subordinated
Notes Due 2001......................... $115,000,000(3) 100% $115,000,000 $39,656(5)
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Common Stock (par value $.01 per
share)................................. (4) -- -- --
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457, the registration fee has been calculated solely on the
basis of the proposed maximum aggregate offering price of the % Step-up
Convertible Subordinated Notes Due 2001 ("SIRENs").
(3) Includes $15,000,000 principal amount of SIRENs subject to the Underwriters'
over-allotment option.
(4) Such indeterminate number of shares as may be issuable on conversion of the
SIRENs, including such additional shares as may be issuable as a result of
adjustments to the conversion rate.
(5) Previously paid.
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 SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy
nor shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED APRIL 1, 1994
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PROSPECTUS
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(SOCO LOGO) $100,000,000
Snyder Oil Corporation
% Step-up Convertible Subordinated Notes Due 2001
(Step-up Income Redeemable Equity Notes(TM) -- SIRENs(TM))
Interest Payable March 31 and September 30 Due March 31, 2001
------------------
The SIRENs are convertible into Common Stock of Snyder Oil Corporation (the
"Company") at any time on or prior to maturity, unless previously redeemed,
at a conversion price of $ per share, subject to adjustment in certain
events. On March 31, 1994, the last reported sale price for the Common
Stock on the New York Stock Exchange (Symbol: SNY) was $19 1/2 per
share. Interest on the SIRENs will accrue at the rate of % per
annum from the date of issuance through March 31, 1997 and
will accrue at the rate of % per annum from
April 1, 1997 to maturity or earlier redemption.
The SIRENs are redeemable, in whole or in part, at the option of the Company at
any time on or after March 31, 1997, at the redemption prices set forth herein
plus accrued interest to the date of redemption. Upon a Change of Control
(as defined) which constitutes a Repurchase Event (as defined), each
holder of SIRENs will have the right, subject to certain conditions
and restrictions, to require the Company to repurchase outstanding
SIRENs owned by such holder at their principal amount plus
accrued interest. The SIRENs are subordinated to all
Senior Indebtedness (as defined) of the Company.
The SIRENs will initially be issued in the form
of one or more Global Notes registered in the
name of Cede & Co., as nominee of The
Depository Trust Company. See
"Description of SIRENs."
------------------
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 AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
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<S> <C> <C> <C>
Price to Underwriting Proceeds to
Public(1) Discount Company(2)
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Per SIREN
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Total(3)
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</TABLE>
(1) Plus accrued interest, if any, from , 1994.
(2) Before deduction of expenses payable by the Company, estimated at
$ .
(3) The Company has granted the Underwriters an option, exercisable for 30 days
from the date of the initial public offering of the SIRENs, to purchase up
to an additional $15,000,000 principal amount of SIRENs solely to cover
over-allotments. If the option is exercised in full, the Price to Public,
Underwriting Discount and Proceeds to Company will be $ ,
$ , and $ , respectively.
------------------
The SIRENs are offered by the several Underwriters when, as and if issued
by the Company, delivered to and accepted by the Underwriters and subject to
their right to reject orders in whole or in part. It is expected that the SIRENs
will be ready for delivery through the facilities of The Depository Trust
Company on or about , 1994.
(TM)Trademark of CS First Boston Corporation
CS First Boston
PaineWebber Incorporated
Petrie Parkman & Co.
Smith Barney Shearson Inc.
- --------------------------------------------------------------------------------
The date of this Prospectus is April , 1994.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SIRENS OFFERED
HEREBY AND THE COMPANY'S COMMON STOCK AND PREFERRED STOCK 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.
(MAP OF THE UNITED STATES SHOWING THE LOCATIONS OF THE COMPANY'S
MAJOR GAS FACILITIES, CORPORATE OFFICES, FIELD OFFICES
AND MAJOR PRODUCING PROPERTIES)
FOR CALIFORNIA RESIDENTS: WITH RESPECT TO SALES OF THE SIRENS BEING OFFERED
HEREBY TO CALIFORNIA RESIDENTS AS OF THE DATE OF THIS PROSPECTUS, SUCH SIRENS
MAY BE SOLD ONLY TO (1) "ACCREDITED INVESTORS" WITHIN THE MEANING OF REGULATION
D UNDER THE SECURITIES ACT OF 1933, (2) BANKS, SAVINGS AND LOAN ASSOCIATIONS,
TRUST COMPANIES, INSURANCE COMPANIES, INVESTMENT COMPANIES REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, PENSION AND PROFIT SHARING TRUSTS, OR
CORPORATIONS OR OTHER ENTITIES WHICH, TOGETHER WITH SUCH CORPORATION'S OR OTHER
ENTITY'S AFFILIATES WHICH ARE UNDER COMMON CONTROL, HAVE A NET WORTH ON A
CONSOLIDATED BASIS ACCORDING TO THEIR MOST RECENT REGULARLY PREPARED FINANCIAL
STATEMENTS (WHICH SHALL HAVE BEEN REVIEWED, BUT NOT NECESSARILY AUDITED BY
OUTSIDE ACCOUNTANTS) OF NOT LESS THAN $14,000,000 AND SUBSIDIARIES OF THE
FOREGOING, (3) ANY CORPORATION, PARTNERSHIP OR ORGANIZATION (OTHER THAN A
CORPORATION, PARTNERSHIP OR ORGANIZATION FORMED FOR THE SOLE PURPOSE OF
PURCHASING THE SIRENS BEING OFFERED HEREBY) WHO PURCHASES AT LEAST $5,000,000
AGGREGATE AMOUNT OF THE SIRENS OFFERED HEREBY, OR (4) ANY NATURAL PERSON WHO (A)
HAS INCOME OF $65,000 AND A NET WORTH OF $250,000 OR (B) HAS A NET WORTH OF
$500,000 (IN EACH CASE, EXCLUDING HOME, HOME FURNISHINGS AND PERSONAL
AUTOMOBILES). EACH CALIFORNIA RESIDENT PURCHASING THE SIRENS OFFERED HEREBY WILL
BE DEEMED TO REPRESENT BY SUCH PURCHASE THAT IT COMES WITHIN ONE OF THE
AFOREMENTIONED CATEGORIES.
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this Prospectus.
All information giving effect to this Offering assumes that the Underwriters'
over-allotment option is not exercised unless otherwise noted.
THE COMPANY
Snyder Oil Corporation (the "Company") is engaged in the development and
acquisition of oil and gas properties primarily in the Rocky Mountain region of
the United States. The Company also gathers, transports, processes and markets
natural gas generally in proximity to its principal producing properties. Over
the five year period from 1988 to 1993, revenues increased from $14.7 million to
$229.9 million, net income increased from $5.1 million to $25.7 million and net
cash provided by operations increased from $8.1 million to $68.3 million. At
December 31, 1993, the Company's net proved reserves totaled 103.6 MMBOE, having
a pretax present value at constant prices of $390.4 million. Approximately 69%
of its proved reserves are natural gas.
Approximately 90% of the present value of the Company's proved reserves is
concentrated in five major producing areas located in Colorado, Wyoming and
Texas. In total, the Company's properties are located in 15 states and the Gulf
of Mexico and include 5,122 gross (2,187 net) producing wells and nine gas
transportation and processing facilities. The Company operates more than 2,100
wells which account for over 90% of its developed reserves. In addition to its
domestic operations, the Company is also participating in several international
exploration and development projects through its wholly owned subsidiary, SOCO
International, Inc., and through its 36% owned affiliate, Command Petroleum
Holdings NL. At December 31, 1993, the Company held undeveloped acreage totaling
539,000 gross acres (326,000 net) domestically and 4.3 million gross acres (3.3
million net) internationally.
The Company has pursued a balanced strategy of development drilling and
acquisitions, focusing on operating efficiency and enhanced profitability
through the concentration of assets in selected geographic areas or "hubs."
Currently, the primary emphasis of the Company's growth strategy is development
drilling in the Rockies, mainly the Wattenberg Field in the Denver-Julesburg
Basin ("DJ Basin") of Colorado where the Company drilled 323 wells in 1993. In
implementing this strategy in the Wattenberg Field over the past three years,
the Company has achieved the following: (i) drilled approximately 667 wells, 660
of which are currently producing; (ii) increased production more than five
times, from an average of 2,575 MBOE per day in 1991 to an average of 13,265
MBOE per day in 1993; (iii) increased proved reserves nearly 50% from 37.9 MMBOE
at yearend 1991 to 55.2 MMBOE at yearend 1993; and (iv) generally reduced
drilling and completion costs by over 30% through a combination of aggressive
cost cutting, economies of scale and technological improvements. Through a major
joint venture with Union Pacific Resources Company, as well as acquisitions and
leasing, the Company has accumulated a substantial inventory of potential
drilling locations, including 1,102 locations that were classified as proved
undeveloped at December 31, 1993.
In 1993, the Company embarked on a program to apply the experience gained
in the Wattenberg Field to two other large scale gas developments in the
Rockies. In the Washakie Basin of southern Wyoming (the "East Washakie
Project"), the Company currently operates 128 wells and holds a significant
inventory of potential drilling locations, including 98 locations that were
classified as proved undeveloped at December 31, 1993. The Company has also
initiated the development of a third hub in the Rockies through three purchase
transactions, as well as farmouts and leasing. As a result, the Company
currently holds a significant inventory of potential drilling locations in the
Piceance and Uinta Basins of Colorado and Utah (collectively, the "Western Slope
Project"), including 101 locations that were classified as proved undeveloped at
December 31, 1993.
During 1994, the Company intends to continue development in the DJ Basin
and to increase activity in the East Washakie and Western Slope Projects. The
Company expects to spend $175 to $200 million for development drilling and
expansion of gas facilities in 1994, including the drilling of over 650 wells,
500 of which are planned for the Wattenberg Field and up to 90 for the East
Washakie and Western Slope Projects. As part of this program, the Company will
emphasize the improvement of well economics through the use of
3
<PAGE> 5
technological improvements and cost saving drilling techniques, as well as the
capture of downstream margins via the Company's gas facilities. In addition to
development drilling in the Rockies, the Company intends to pursue acquisitions
to strengthen its existing asset base and secure a foothold in new geographic
areas and to continue progress in bringing its international projects to
fruition.
THE OFFERING
Securities Offered......... $100,000,000 aggregate principal amount of %
Step-up Convertible Subordinated Notes Due 2001
(Step-up Income Redeemable Equity
Notes(TM) -- SIRENs(TM) (the "SIRENs")).
Interest Rates............. Interest on the SIRENs will accrue at the rate of
% per annum from the date of issuance through
March 31, 1997 and will accrue at the rate of
% per annum from April 1, 1997 to maturity or
earlier redemption.
Interest Payment Dates..... March 31 and September 30, commencing September 30,
1994.
Conversion................. Convertible at the option of the holder into shares
of Common Stock at any time prior to maturity,
unless previously redeemed, at a conversion price
of $ per share, subject to adjustment
under certain conditions.
Redemption at Option of
Company.................. Redeemable at the option of the Company, in whole
or in part, at any time on or after March 31, 1997,
initially at % of the principal amount and at
prices declining to 100% at final maturity, in each
case together with accrued interest to the date of
redemption.
Repurchase at Option of
Holders.................. Upon a Change of Control (as defined) which
constitutes a Repurchase Event (as defined), each
holder of SIRENs will have the right, subject to
certain conditions and restrictions, to require the
Company to repurchase outstanding SIRENs owned by
such holder at 100% of the principal amount of such
SIRENs, plus accrued and unpaid interest to the
date of repurchase. Before repurchasing the SIRENs,
the Company is required, with respect to any Senior
Indebtedness (as defined) that would prohibit the
repurchase of SIRENs in the event of a Change of
Control either to repay all such Senior
Indebtedness in full or obtain the requisite
consents under such Senior Indebtedness to permit
the repurchase of the SIRENs. The inability of the
Company to repay such Senior Indebtedness or to
obtain the requisite consents under such Senior
Indebtedness to permit the repurchase of the SIRENs
could result in an Event of Default (as defined)
under the indenture (the "Indenture") with respect
to the SIRENs.
Ranking.................... Subordinated to all existing and future Senior
Indebtedness of the Company. The Indenture will not
restrict the incurrence of Senior Indebtedness or
other indebtedness by the Company or any subsidiary
of the Company. The SIRENs are effectively
subordinated to all existing and future liabilities
of the Company's subsidiaries to the extent of the
assets of such subsidiaries. Upon the sale of the
SIRENs offered hereby and application of the net
proceeds therefrom, the Company estimates that the
sum of its Senior Indebtedness and the indebtedness
of its subsidiaries will total approximately $34
million.
4
<PAGE> 6
Use of Proceeds............ To repay a portion of the borrowings outstanding
under the Company's bank credit facility. The
Company intends to use the resulting borrowing
capacity under its credit facility to fund
development drilling, expansion of its gas
facilities and potential acquisitions.
Book-Entry System.......... The SIRENs will be issued in the form of one or
more fully registered global securities
(collectively, the "Global Note") registered in the
name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"). Except as described in this
Prospectus, beneficial interests in the Global Note
will be represented through accounts of financial
institutions acting on behalf of beneficial owners
as direct and indirect participants in DTC. Except
in limited circumstances described in this
Prospectus, owners of beneficial interests in the
Global Note will not be entitled to have SIRENs
registered in their names, will not receive or be
entitled to receive SIRENs in definitive form and
will not be considered holders thereof under the
Indenture. SIRENs will only be sold in minimum
aggregate principal amounts of $1,000 and integral
multiples thereof. See "Description of
SIRENs -- Form, Denomination and Registration."
Original Issue Discount.... For federal income tax purposes, interest on the
SIRENs is expected to accrue at a constant rate
through the stated maturity date. As a result, the
SIRENs will be considered to be issued with
original issue discount. For all periods through
March 31, 1997, holders will be required to
recognize an amount of taxable interest and OID
income that exceeds the actual cash interest
payments for such periods. For periods beginning
after March 31, 1997, cash interest payments on the
SIRENs will exceed the amount of taxable interest
and OID income recognized by the holders. See
"Certain Federal Income Tax
Considerations -- Original Issue Discount."
Sinking Fund............... None.
NYSE Common Stock
Symbol................... SNY
Unless otherwise indicated in this Prospectus, as used herein, the term
"Btu" means British Thermal Unit, the term "MMBtu" means million Btus, the term
"Mcf " means thousand cubic feet, the term "MMcf " means million cubic feet, the
term "Bcf " means billion cubic feet, the term "Bbl" means barrel, the term
"MBbl" means thousand barrels, the term "MMBbl" means million barrels, the term
"BOE" means barrel of oil equivalent, the term "MBOE" means thousand barrels of
oil equivalent and the term "MMBOE" means million barrels of oil equivalent. Gas
is converted into a barrel of oil equivalent based on six Mcf of gas to one Bbl
of oil, except as otherwise described herein. A "gross acre" or "gross well" is
an acre or well in which an interest is owned. "Net acres" or "net wells" are
obtained by multiplying gross acres or wells by the Company's working interest
in the applicable properties.
5
<PAGE> 7
SUMMARY FINANCIAL AND OPERATING INFORMATION
The following table presents summary financial and operating information
for each of the three years ended December 31, 1993. The following information
should be read in conjunction with the consolidated financial statements
incorporated by reference herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1991 1992 1993
------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
FINANCIAL DATA
Revenues.......................................... $92,501 $120,172 $229,885
Income before accounting change and extraordinary
item........................................... 8,811 16,875 27,608
Net income........................................ 8,811 20,638 25,664
Net income available to common.................... 8,358 15,838 16,564
Weighted average shares outstanding............... 22,839 22,722 23,096
Ratio of earnings to fixed charges(a)............. 2.4x 4.5x 7.6x(b)
Ratio of EBITDA to fixed charges(c)............... 5.4x 10.9x 17.2x(b)
Net cash provided by operations................... $37,738 $ 47,911 $ 68,293
Capital expenditures.............................. 48,385 130,375(d) 166,726
Per share data
Income before accounting change and
extraordinary item........................... $ .37 $ .53 $ .80
Net income..................................... .37 .70 .72
Dividends...................................... .20 .25(e) .22
OPERATING DATA
Average daily production
Oil (Bbl)...................................... 4,074 4,851 9,455
Gas (Mcf)...................................... 50,363 63,088 96,107
BOE(f)......................................... 13,525 16,365 25,472
Average sales price
Oil (per Bbl).................................. $ 20.62 $ 18.87 $ 15.41
Gas (per Mcf)(f)............................... 1.68 1.74 1.94
BOE(f)......................................... 13.24 12.92 13.41
Average operating expense per BOE(g).............. 5.04 4.68 4.83
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1993
----------------------------
ACTUAL AS ADJUSTED(H)
--------- --------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA
Working capital............................................. $ 1,291 $ 1,291
Oil and gas properties and facilities, net.................. 388,361 388,361
Total assets................................................ 479,536 479,536
Senior debt................................................. 114,952 18,052
Convertible subordinated notes.............................. -- 100,000
Stockholders' equity........................................ 297,241 297,241
</TABLE>
- -------------
(a) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of income before taxes, accounting change,
extraordinary item and "fixed charges." "Fixed charges" include interest
on indebtedness and the portion of rental expense, excluding rent on
capitalized leases, estimated to be representative of the interest
factor in rental expense.
(b) The ratio of earnings to fixed charges and the ratio of EBITDA to fixed
charges, pro forma for the issuance of $100 million principal amount of
SIRENs offered hereby (based on the yield to maturity), would be 4.5x
and 10.3x, respectively.
(c) EBITDA is income before (i) accounting change and extraordinary item,
(ii) taxes, (iii) depletion, depreciation and amortization and (iv)
interest.
(d) Includes $56.1 million incurred in connection with properties acquired
in December 1992, $49.8 million of which was paid in February 1993.
(e) Due to revised payment timing, five payments were made at the $.05
quarterly rate in 1992.
(f) Gas production is converted to oil equivalents at the rate of 6 Mcf per
barrel except for Thomasville production which, through 1992, was
converted based on its price equivalency to the Company's other gas.
Average gas prices exclude Thomasville production.
(g) Includes production and severance taxes.
(h) Adjusted to give effect to the application of the estimated net proceeds
of this Offering. See "Use of Proceeds."
6
<PAGE> 8
SUMMARY RESERVE DATA
The following table sets forth information on estimated proved oil and gas
reserves, future net cash flow before taxes from such reserves and the pretax
present value of such cash flow, using unescalated prices and costs and a 10%
per annum discount rate ("Pretax PW10% Value"). The prices used in the yearend
reserve estimates averaged $11.49 per barrel of oil and $2.11 per Mcf of gas
over the life of the reserves.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
--------------------------------------
DEVELOPED UNDEVELOPED TOTAL
--------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Estimated proved reserves:
Crude oil and liquids (Bbl)..................... 18,032 13,898 31,930
Natural gas (Mcf)............................... 268,349 161,740 430,089
BOE(a).......................................... 62,757 40,855 103,612
Future net cash flow from estimated production.... $ 474,480 $ 213,792 $688,272
Pretax PW10% Value(b)............................. $ 297,638 $ 92,771 $390,409
-------------
</TABLE>
(a) Natural gas reserves are converted to oil equivalents at the rate of 6
Mcf per Bbl.
(b) The after-tax present value of proved reserves totalled $340.5 million
at December 31, 1993.
The revenues generated by the Company are highly dependent upon the prices
of crude oil and gas. The volatility of energy prices makes it particularly
difficult to estimate future prices of oil and gas. Price fluctuations change
reserve values by altering the quantities of reserves that are recoverable on an
economic basis as well as the future net revenues attributable to the reserves.
Any significant decline in prices of oil or gas could have a material adverse
effect on the Company's financial condition and results of operations.
7
<PAGE> 9
USE OF PROCEEDS
The net proceeds from the sale of the SIRENs are estimated to be
approximately $ million ($ million if the Underwriters' over-allotment
option is exercised in full). The Company intends to use the net proceeds to
repay a portion of the borrowings outstanding under its bank credit facility.
The Company intends to use the resulting borrowing capacity under its credit
facility to fund development drilling, expansion of its gas facilities and
potential acquisitions. The Company estimates that it will expend $175 to $200
million for development drilling and expansion of gas facilities during 1994,
assuming no material changes in oil and gas prices. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
On March 30, 1994 approximately $125.0 million was outstanding under the
Company's revolving bank credit facility. The rate of interest on this debt
fluctuates based on various rates, as selected by the Company. The weighted
average interest rate on bank borrowings at such date was 4.89%. The facility
expires on December 31, 1997. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
CAPITALIZATION
The following table sets forth the Company's capitalization at December 31,
1993, and as adjusted to give effect to the issuance of the SIRENs offered
hereby and the application of the estimated net proceeds therefrom.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
--------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current portion of debt............................................. $ 15 $ 15
-------- -----------
-------- -----------
Long-term debt(a)
Senior debt....................................................... $114,952 $ 18,052
% Step-up Convertible Subordinated Notes Due 2001.............. -- 100,000
-------- -----------
Total long-term debt...................................... 114,952 118,052
Stockholders' equity
Preferred Stock, $.01 par value; 10 million shares authorized:
$4.00 Convertible Exchangeable Preferred Stock; 1,186,005
shares issued and outstanding ($50.00 liquidation preference
per share).................................................... 12 12
$6.00 Convertible Exchangeable Preferred Stock; 1,035,000
shares issued and outstanding ($100.00 liquidation preference
per share).................................................... 10 10
Common Stock, $.01 par value; 75 million shares authorized and
23,259,658 shares issued and outstanding (b)................... 233 233
Capital in excess of par value.................................... 250,574 250,574
Retained earnings................................................. 46,954 46,954
Foreign currency translation...................................... (542) (542)
-------- -----------
Total stockholders' equity................................ 297,241 297,241
-------- -----------
Total capitalization...................................... $412,193 $ 415,293
-------- -----------
-------- -----------
</TABLE>
- -------------
(a) See Note 3 to the consolidated financial statements incorporated by
reference herein for a description of long-term debt.
(b) Excludes an aggregate of 14,794,950 shares of Common Stock reserved for
issuance as of March 1, 1994 upon conversion or exercise of outstanding
securities, consisting of (i) 11,463,558 shares reserved for issuance upon
conversion of preferred stock, (ii) 1,331,392 shares reserved for issuance
upon exercise of management stock options and (iii) 2,000,000 shares
reserved for issuance upon exercise of warrants held by Union Pacific
Resources Company. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
8
<PAGE> 10
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed on the New York Stock Exchange ("NYSE") under
the symbol "SNY." The following table sets forth, for the periods indicated, the
high and low sales prices for the Common Stock for NYSE composite transactions,
as reported by The Wall Street Journal, and the cash dividends declared.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- ---- ---------
<S> <C> <C> <C>
1992
First Quarter........................................... $ 6 7/8 $ 5 7/8 $ .05
Second Quarter.......................................... 7 3/8 6 1/8 .10(a)
Third Quarter........................................... 10 1/2 6 3/8 .05
Fourth Quarter.......................................... 10 1/8 8 5/8 .05
1993
First Quarter........................................... 16 1/8 10 .05
Second Quarter.......................................... 20 1/4 15 .05
Third Quarter........................................... 23 16 5/8 .06
Fourth Quarter.......................................... 23 14 3/4 .06
1994
First Quarter........................................... 21 3/8 17 1/2 .06
-------------
(a) Due to revised payment timing, two payments were made at the $.05 quarterly rate in
the second quarter of 1992.
</TABLE>
On March 31, 1994, the last reported sale price of the Common Stock on the
NYSE was $19 1/2 per share. As of December 31, 1993, there were approximately
3,500 holders of record of the Common Stock and 23.3 million shares outstanding.
Shares of Common Stock receive dividends if, as and when declared by the
Board of Directors. The amount of future dividends will depend on debt service
requirements, dividend requirements on preferred stock, capital expenditures and
other factors. The Company's debt agreements contain restrictions on its ability
to declare and pay dividends on the Common Stock in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
9
<PAGE> 11
SELECTED HISTORICAL FINANCIAL INFORMATION
The following table presents selected financial information for each of the
five years ended December 31, 1993. The following information should be read in
conjunction with the consolidated financial statements incorporated by reference
herein.
<TABLE>
<CAPTION>
AS OF OR FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1989 1990 1991 1992 1993
------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OPERATIONS
Revenues
Oil and gas sales............................... $12,479 $ 49,803 $ 65,344 $ 77,363 $124,641
Gas processing and transportation............... 10,885 29,442 21,459 38,611 94,839
Other........................................... 3,179 2,928 5,698 4,198 10,405
------- -------- -------- -------- --------
26,543 82,173 92,501 120,172 229,885
------- -------- -------- -------- --------
Expenses
Direct operating................................ 4,930 18,088 24,882 28,057 44,901
Cost of gas and transportation.................. 9,168 24,103 14,202 30,469 84,840
General and administrative...................... 1,047 5,649 7,259 6,704 6,780
Interest and other.............................. 761 7,125 9,327 5,693 7,271
Depreciation, depletion and amortization........ 3,316 17,351 25,392 31,944 51,184
Income before taxes, accounting change and
extraordinary item.............................. 7,321 9,857 11,439 17,305 34,909
Provision for income taxes
Current......................................... 400 977 230 430 --
Deferred........................................ 2,089 1,365 2,398 -- 7,301
------- -------- -------- -------- --------
2,489 2,342 2,628 430 7,301
------- -------- -------- -------- --------
Income before accounting change and extraordinary
item............................................ 4,832 7,515 8,811 16,875 27,608
Cumulative effect of change in accounting for
income taxes.................................... -- -- -- 3,763 --
Extraordinary item -- use of net operating loss
carryforward.................................... 2,089 -- -- -- --
Extraordinary item -- early extinguishment of
debt, net of taxes.............................. -- -- -- -- (1,944)
------- -------- -------- -------- --------
Net income........................................ 6,921 7,515 8,811 20,638 25,664
Dividends on preferred stock...................... -- -- 453 4,800 9,100
------- -------- -------- -------- --------
Net income available to common.................... $ 6,921 $ 7,515 $ 8,358 $ 15,838 $ 16,564
------- -------- -------- -------- --------
------- -------- -------- -------- --------
Weighted average shares outstanding............... 11,135 20,620 22,839 22,722 23,096
Per share data
Income before accounting change and
extraordinary item............................ $ .43 $ .36 $ .37 $ .53 $ .80
Net income...................................... .62 .36 .37 .70 .72
Dividends....................................... .11 .16 .20 .25(a) .22
Ratio of earnings to fixed charges(b)............. 10.6x 2.6x 2.4x 4.5x 7.6x(c)
Ratio of EBITDA to fixed charges(d)............... 15.0x 5.3x 5.4x 10.9x 17.2x(c)
CASH FLOW
Net cash provided by operations................... $11,129 $ 22,512 $ 37,738 $ 47,911 $ 68,293
Capital expenditures.............................. 14,216 171,767(e) 48,385 130,375(f) 166,726
BALANCE SHEET
Working capital................................... $ 3,499 $ 12,087 $ 17,259 $ 7,619 $ 1,291
Oil and gas properties and facilities, net........ 29,904 179,902 196,206 287,094 388,361
Total assets...................................... 56,669 227,198 252,241 346,737 479,536
Senior debt....................................... 2,325 56,172 17,108 96,568 114,952
Subordinated notes, net........................... 2,477 25,000 25,000 18,750 --
Stockholders' equity.............................. 31,149 115,187 174,696 184,393 297,241
</TABLE>
- ---------------
(a) Due to revised payment timing, five payments were made at the $.05 quarterly
rate in 1992.
(b) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of income before taxes, accounting change, extraordinary
item and "fixed charges." "Fixed charges" include interest on indebtedness
and the portion of rental expense, excluding rent on capitalized leases,
estimated to be representative of the interest factor in rental expense.
(c) The ratio of earnings to fixed charges and the ratio of EBITDA to fixed
charges, pro forma for the issuance of $100 million principal amount of
SIRENs offered hereby (based on the yield to maturity), would be 4.5x and
10.3x, respectively.
(d) EBITDA is income before (i) accounting change and extraordinary item, (ii)
taxes, (iii) depletion, depreciation and amortization and (iv) interest.
(e) Includes $130.7 million related to the acquisition of a publicly traded
limited partnership managed by the Company.
(f) Includes $49.8 million paid in February 1993 for properties acquired in
December 1992.
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<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS(A)
Comparison of 1993 results to 1992. Total revenues rose 91% in 1993 to
$229.9 million. Net income before taxes and extraordinary items more than
doubled to reach $34.9 million in 1993. The increase was led by a rapid rise in
production and assisted by an increase in gas processing and transportation
margins. Before the effect of a favorable $3.8 million income tax accounting
change in 1992 and a $1.9 million 1993 extraordinary charge on early retirement
of debt, earnings per common share were $.80 in 1993 compared to $.53 in 1992, a
51% increase.
The gross margin from production operations for 1993 increased 62% to $79.7
million, which was primarily related to a 65% growth in oil and gas production.
The price received per equivalent barrel decreased by 3% to $13.41. Total
operating expenses including production taxes increased 60% during 1993 although
operating cost per BOE decreased to $4.83 from $4.99 in 1992. Expense reductions
gained from wells added in the DJ Basin, where operating costs averaged $2.76
per BOE, were partially offset by the late 1992 acquisition of Wyoming wells
from a major oil company where 1993 operating costs averaged $7.45 per BOE.
For the year ended December 31, 1993, average daily production was 25,472
BOE, a 65% increase from 1992. Average daily production in the fourth quarter of
1993 climbed to 10,314 Bbls and 105.6 MMcf (27,917 BOE). The production
increases resulted primarily from acquisitions and continuing development
drilling in the DJ Basin. Domestically, $51.0 million in properties were
acquired in 1993, primarily in and around existing hubs in Colorado and Wyoming.
The acquisitions included a significant number of development locations and
should continue to add to production in 1994. In 1993, 311 wells were placed on
production in the DJ Basin, with 51 wells in various stages of drilling and
completion at yearend. Because the majority of the wells were added in the
latter part of the year, production will not be fully impacted until 1994.
Additionally, significant downtime was experienced in the fourth quarter at the
major processing plant in the DJ Basin, which increased line pressures and
hampered production. To a lesser extent, this situation continued into early
1994.
The gross margin from gas processing, transportation and marketing
activities for 1993 increased 23% to $10.0 million from $8.1 million in 1992.
The increase was primarily attributable to a $3.0 million (33%) rise in
transportation and processing margins as a result of additional DJ Basin
production and the recent expansion of the related facilities. Gas marketing
margins for 1993 decreased by $1.1 million due to reduced margins on the
Company's Oklahoma cogeneration supply contract, which declined as a result of
an imposed limitation of the contract sales price and rising gas purchase costs.
In 1993 the net contract margin was a loss of $267,000, which was $1.8 million
less than 1992. At present gas price levels, the Company foresees continued
negative or breakeven margins for the cogeneration contract through July 1994.
At that time, a change in the pricing formula should result in improved margins.
The cogeneration margin reduction was partially offset by a $667,000 (126%) rise
in other gas marketing margins in 1993 resulting from increased third party
marketing.
Other income was $10.4 million during 1993, compared to $4.2 million in
1992. The $6.2 million increase resulted from a $3.5 million gas contract
settlement received in April 1993, collection of a $1.7 million litigation
judgment and greater gains on the sales of securities.
General and administrative expenses, net of reimbursements, for 1993
represented 3% of revenues compared to 5.6% in 1992 as expenses were held
essentially flat while revenues grew 91%. Interest and other expenses increased
28% primarily as a result of a rise in outstanding debt balances. Senior debt
was
- ---------------
(a) Prior to 1993, production from the Thomasville Field, which was sold at
prices that were significantly above market, was converted to equivalent
barrels based on its price relative to the Company's other gas production.
Beginning in 1993, Thomasville production was converted to oil equivalents
at the rate of 6 Mcf per barrel. In order to provide comparability between
periods, equivalent barrel information, other than depletion rates, for 1992
and 1991 has been restated in this section to reflect Thomasville production
at the conversion rate of 6 Mcf per barrel. All equivalent barrel
information presented elsewhere in this Prospectus reflects the historical
method of conversion of Thomasville production used by the Company in the
applicable year.
11
<PAGE> 13
substantially reduced in April 1993 with proceeds from a preferred offering, but
increased through yearend as a result of development expenditures, acquisitions,
the investment in Command Petroleum Holdings NL and the retirement of $25.0
million in subordinated debt.
Depletion, depreciation and amortization during 1993 increased 60% from the
prior year. The increase was the direct result of the 65% rise in equivalent
production between years. The producing depletion rate per BOE for 1993 was
reduced to $4.75 from $4.79 in 1992. The rate was reduced by an ongoing drilling
cost reduction program, partially offset by an increase from the discontinuation
of converting Thomasville production to equivalent quantities based on relative
gas prices.
The Company adopted FASB Statement No. 109, "Accounting for Income Taxes,"
effective January 1, 1992. Net income for 1992 was increased by $3.8 million for
the cumulative effect of the change in method of accounting for income taxes. In
1992 the income tax provision was reduced from the statutory rate of 34% by $5.5
million due to the elimination of deferred taxes as a result of tax basis in
excess of financial basis. In 1993 the income tax provision was reduced from the
newly enacted rate of 35% to an effective rate of approximately 20% as a result
of full realization of the excess basis benefit. The Company anticipates
deferred taxes will be provided in 1994 and beyond based on the full statutory
rate and accordingly will increase substantially.
Comparison of 1992 results to 1991. Revenues rose 30% in 1992 to $120.2
million, compared to $92.5 million in 1991. Net income for 1992 was $20.6
million, a 134% increase from the $8.8 million in 1991. The increases resulted
from greater oil and gas production volumes, lower interest expense, reduced
general and administrative expenses and a $3.8 million reversal of the
cumulative effect of prior year deferred taxes with the adoption of a change in
the method of accounting for income taxes.
Average daily production for 1992 rose 24% to 15,408 BOE due mostly to
development drilling in the DJ Basin of Colorado as 189 wells were placed on
production there. As a result, the gross margin from production increased 22% to
$49.3 million in 1992. The price per BOE decreased 4% during 1992.
The gross margin from gas processing, transportation and marketing
activities for 1992 increased 12% to $8.1 million from $7.3 million in 1991. The
growth was primarily the result of increased marketing of third party gas in New
Mexico, Colorado and Wyoming. Gas processing and transportation margins
increased moderately as volumes were increased late in the year by expansions of
pipeline and plant facilities to take advantage of increasing DJ Basin
production. Other income for 1992 decreased 26% to $4.2 million from a reduction
in gains on sales of securities and lower interest on notes receivable.
Direct operating expenses including production taxes increased only 13%
during 1992 as the operating cost per BOE decreased to $4.99 from $5.47 in 1991,
due to increased DJ Basin production where operating costs have been
significantly lower than average. General and administrative expenses, net of
reimbursements, for 1992 represented less than 6% of revenues compared to 8% in
1991, as revenues rose 30%. Interest and other expenses dropped 39% in 1992 due
to lower average outstanding senior debt after the application of proceeds from
a preferred stock offering in late 1991.
DEVELOPMENT, ACQUISITION AND EXPLORATION
During 1993 the Company expended $93.1 million for oil and gas property
development and exploration, $51.0 million for acquisitions and $22.6 million
for gas facility expansion and other assets, for a total of $166.7 million in
property and equipment expenditures. Additionally, the Company made an $18.2
million investment in an Australian based exploration and production company.
The Company has concentrated a significant portion of its development
activities in the DJ Basin. Capital expenditures for DJ Basin development
totalled $75.4 million during 1993. A total of 311 newly drilled wells were
placed on production there in 1993 and 51 were in progress at yearend.
Additionally, 42 recompletions were performed in 1993, with seven in process at
yearend. In December 1993, 16 drilling rigs were in operation in the DJ Basin.
The Company anticipates putting 500 or more wells per year on production in the
DJ Basin for the next few years. With additional leasing activity and through
drilling cost reductions that add proved undeveloped locations as they become
economic, the Company has increased the inventory of available drillsites. In
December 1993, the Company entered into a letter of intent with Union Pacific
Resources Company
12
<PAGE> 14
("UPRC") whereby the Company will gain the right to drill wells on UPRC's
previously uncommitted acreage throughout the Wattenberg area. This transaction
significantly increased the Company's undeveloped Wattenberg inventory. UPRC
will retain a royalty and the right to participate as a 50% working interest
owner in each well, and received warrants to purchase two million shares of
Company stock. Of the warrants, one million expire three years from the date of
grant, and are exercisable at $25 per share, while the other one million expire
in four years and are exercisable at $27 per share. On February 8, 1995, the
exercise prices may be reduced to 120% of the average closing price of the
Company stock for the preceding 20 consecutive trading days, but not below
$21.60 per share. The expiration date of the warrants will be extended one year
if the average closing price over such 20 day trading period is less than $16.50
per share.
The Company expended $14.8 million for other development and recompletion
projects and $2.9 million for exploration during 1993. In Nebraska, 29 wells
were added to production in 1993 as an extension of a drilling program initiated
in 1992. An additional 20 wells are planned in Nebraska for 1994. In southern
Wyoming, 11 wells in the East Washakie Basin development program were
successfully drilled and completed during the last half of 1993 with three in
process at yearend. In this program, significant cost-cutting measures were
applied based on the experience gained in the DJ Basin. In central Wyoming on
the properties acquired from a major oil company in late 1992, efforts have been
focused on increasing operating efficiency with limited development drilling and
workover activity. In 1993, three successful wells were drilled in the fourth
quarter and selected development and recompletion activity is scheduled for
1994. In the Piceance Basin of western Colorado, a three well test program was
started in December of 1993 on acreage acquired there during the year, with one
well undergoing completion, the second in progress and a third scheduled for
early 1994. Current plans include a minimum of 25 wells in the basin during
1994. In South Texas, a combined operated and non-operated program was
initiated, with nine wells completed in 1993 and one well abandoned. A total of
25 additional horizontal locations have been identified and drilling should
continue with as many as 15 wells planned in 1994. In its domestic exploration
efforts, the Company initiated a seismic program in Louisiana and began drilling
early in the fourth quarter. Advanced seismic techniques are being used to
identify further prospects in Louisiana and expectations are to drill up to 20
wells in 1994.
A total of $51.0 million in domestic acquisitions were completed in 1993.
In May 1993, the Company purchased an interest in 121 producing wells and over
70 drilling locations in the DJ Basin area for $3.3 million. In July, an
incremental 25% interest in the Company's Barrel Springs and Duck Lake Fields in
Wyoming was purchased for $6.1 million. The properties are 90% gas and include
44 producing wells and 46 undeveloped locations. In August, the Company acquired
interests in 225 producing wells and 272 proved undeveloped locations in the DJ
Basin for $19.7 million. The proved reserves are 70% gas with more than two-
thirds requiring future development to produce. Late in the year, two
acquisitions were completed in the Piceance and Uinta Basins of Western Colorado
for a total of $12.5 million. The majority of the value was in undeveloped
locations as only 128 wells were currently producing. Numerous other producing
and undeveloped acquisitions totalling $9.4 million were completed, mostly in or
close to the Company's principal operating areas.
The Company's gas gathering and processing facilities have been undergoing
significant transformation since late 1992. In 1993, the Company expended $20.1
million to develop further its gas related assets. The Company spent $9.4
million toward the second phase of its DJ Basin gathering expansion to construct
a high pressure line to deliver gas directly to the major gas processing plant
in the area and expand its gathering network for the increased drilling
activity. An additional $2.6 million was expended to expand the Roggen Plant for
the production increases. A total of $5.6 million in additional transportation
and gathering facilities were constructed in the DJ Basin including a nine mile
16" interconnect line completed in October to relieve high line pressures, a 20"
western gathering extension and numerous other extensions and connections. A
gathering system that delivers third party gas to the Roggen Plant was purchased
for $703,000. The Company expended $1.4 million to complete construction of a
system to gather gas from its Nebraska drilling project. These projects are
intended to take advantage of the significant increase in drilling activity in
these areas.
In May 1993, the Company acquired 42.8% (currently 35.7%) of the
outstanding shares of Command Petroleum Holdings NL ("Command"), a Sydney based
Australian exploration and production company listed on the Australian Stock
Exchange, for $18.2 million. Command holds interests in more than 20
13
<PAGE> 15
exploration permits and licenses and a 28.7% interest in a Netherlands
exploration and production company whose assets are located primarily in the
North Sea. Permtex, the Company's Russian joint venture, received central
government approval in August and the Company executed a finance and insurance
protocol with the Overseas Private Investment Corporation ("OPIC"), a United
States government agency. Current plans call for 25 of the existing 45 shut-in
wells to be placed on production in 1994, and that 400 development wells will be
drilled over the next ten years. Extensive seismic work began in the fourth
quarter of 1993 for 400 kilometers of data in Tunisia and 500 kilometers in
Mongolia.
The Company from time to time acquires securities of publicly traded and
private oil and gas companies. In addition to its investment in Command, the
Company owns, among other investments, more than 5% of the common stock of Lomak
Petroleum, Inc. and, as the result of purchases beginning in the third quarter
of 1993, American Exploration Company. The Company is currently evaluating a
range of possible alternatives with respect to its investment in American
Exploration Company, including the possibility of actions to enhance the value
of its common stock.
FINANCIAL CONDITION AND CAPITAL RESOURCES
At December 31, 1993, the Company had total assets of $480 million and
working capital of $1.3 million. Total capitalization was $412 million, of which
28% was represented by senior debt and the remainder by stockholders' equity.
During 1993, the Company fully retired its $25 million of 13.5% subordinated
notes and the related cumulative participating interests. During 1993, cash
provided by operations was $68.3 million, an increase of 43% over 1992. As of
December 31, 1993, commitments for capital expenditures totalled $7.5 million,
primarily for DJ Basin drilling. The Company anticipates that it will expend
$175 to $200 million for development drilling and expansion of gas facilities in
1994. The level of these and other future expenditures is largely discretionary,
and the amount of funds devoted to any particular activity may increase or
decrease significantly, depending on available opportunities and market
conditions. The Company plans to finance its ongoing development, acquisition
and exploration expenditures using internally generated cash flow, proceeds from
property dispositions and existing credit facilities. In addition, joint
ventures or future public and private offerings of securities may be utilized.
In 1992, an institutional investor agreed to contribute $7 million to a
partnership formed to monetize Section 29 tax credits to be realized from the
Company's properties, mainly in the DJ Basin. The initial $3 million was
contributed in October 1992, and at first payout in June 1993 the second
contribution of $1.5 million was received. An additional $1.5 million was
received in October 1993. This transaction should increase the Company's cash
flow and net income through 1994. A revenue increase of more than $.40 per Mcf
is realized on production generated from qualified Section 29 properties in this
partnership. The Company recognized $3.8 million of this revenue during 1993.
Discussions are in progress to expand the scope of this transaction so that the
benefits would be continued through at least 1996.
In April 1993, the Company sold 4.1 million depositary shares (each
representing a one quarter interest in one share of $100 liquidation value
stock) of convertible preferred stock through an underwritten offering for
$103.5 million. A portion of the net proceeds of $99.3 million was used to
retire the entire outstanding balance under the revolving credit facility at
that time. The preferred stock pays a 6% dividend and is convertible into common
stock at $21.00 per share. At the Company's option, the preferred stock is
exchangeable into 6% convertible debentures on any dividend payment date on or
after March 31, 1994. The preferred stock is redeemable at the option of the
Company on or after March 31, 1996.
Effective July 1, 1993, the Company renegotiated its bank credit facility
and increased it from $150 million to $300 million. The new facility is divided
into a $50 million short-term portion and a $250 million long-term portion that
expires on December 31, 1997. However, management's policy is to request renewal
of the facility annually. Credit availability is adjusted semiannually to
reflect changes in reserves and asset values. At December 31, 1993, the elected
borrowing base was $150 million. The majority of the borrowings currently bear
interest at LIBOR plus 1.25% with the remainder at prime. The Company also has
the option to select the CD rate plus 1.375%. Financial covenants limit debt,
require maintenance of minimum working capital and restrict certain payments,
including stock repurchases, dividends and contributions or advances to
unrestricted subsidiaries. Based on such limitations, $86.5 million would have
been
14
<PAGE> 16
available for the payment of dividends and other restricted payments as of
December 31, 1993. The Company does not currently plan to make, and is not
committed to make, any advances or contributions to unrestricted subsidiaries
that would materially affect its ability to pay dividends under this limitation.
The Company maintains a program to divest marginal properties and assets
that do not fit its long range plans. For 1992 and 1993, proceeds from these
sales were $3.0 million and $5.5 million, respectively. Included in the 1993
proceeds were $4.0 million of cash receipts previously accrued for late 1992
sales. The Company intends to continue to evaluate and dispose of nonstrategic
assets.
The Company believes that its capital resources are more than adequate to
meet the requirements of its business. However, future cash flows are subject to
a number of variables including the level of production and oil and gas prices,
and there can be no assurance that operations and other capital resources will
provide cash in sufficient amounts to satisfy debt service requirements and to
maintain planned levels of capital expenditures or that increased capital
expenditures will not be undertaken.
INFLATION AND CHANGES IN PRICES
While certain of its costs are affected by the general level of inflation,
factors unique to the petroleum industry result in independent price
fluctuations. Over the past five years, significant fluctuations have occurred
in oil and gas prices. Although it is particularly difficult to estimate future
prices of oil and gas, price fluctuations have had, and will continue to have, a
material effect on the Company.
BUSINESS AND PROPERTIES
GENERAL
Snyder Oil Corporation is engaged in the development and acquisition of oil
and gas properties primarily in the Rocky Mountain region of the United States.
The Company also gathers, transports, processes and markets natural gas
generally in proximity to its principal producing properties. Over the five year
period from 1988 to 1993, revenues increased from $14.7 million to $229.9
million, net income increased from $5.0 million to $25.7 million and net cash
provided by operations increased from $8.1 million to $68.3 million. At December
31, 1993, the Company's net proved reserves totaled 103.6 MMBOE, having a pretax
present value at constant prices of $390.4 million. Approximately 69% of its
proved reserves are natural gas.
The Company is headquartered at 777 Main Street, Fort Worth, Texas 76102
(telephone 817-338-4043). The Company also maintains administrative offices in
Denver and New York and has eight field offices in Colorado, Wyoming, Texas, New
Mexico and Nebraska.
DEVELOPMENT
GENERAL. Since 1990, development drilling has become the primary focus of
the Company's growth strategy. The Company believes that its existing properties
have extensive development drilling and enhancement potential, primarily in the
DJ Basin of Colorado, the Washakie Basin in southern Wyoming, the Piceance and
Uinta Basins in western Colorado and Utah and in the Giddings Field in southern
Texas. The Company designs its major drilling programs to reduce risk, create
synergies with its gas management operations and exploit the potential for
continuous cost improvement. In 1994, the Company expects to drill over 650
wells, including approximately 500 wells in the Wattenberg Field, where the size
of its operations enables it to continue to refine the application of new
drilling, completion and operating techniques, and to apply the experience
gained there to establish other large scale development projects in the Rockies.
In its large scale development projects, the Company also attempts to
acquire and maintain a sizeable inventory of potential drilling locations, many
of which may not be economic at current cost and price levels, but which the
Company believes may ultimately prove attractive to develop if reservoir
assumptions are validated and well economics improve over the life of the
project through cost reductions or price increases. No assurances can be given
that such conditions will be satisfied and, accordingly, that such locations
will be drilled.
15
<PAGE> 17
Assuming no material changes in product prices and capital availability,
the Company estimates that it will expend from $150 to $200 million per year for
development drilling and gas facilities over the next three to five years. Such
expenditures totalled $64.8 million in 1992 and $112.8 million in 1993,
primarily in the Wattenberg Field.
DJ BASIN
WATTENBERG FIELD. The Wattenberg Field is the Company's largest base of
operations, representing over 55% of total proved reserves. Between 1991 and
1993, the Company drilled a total of 667 wells in Wattenberg, of which 323 were
drilled during 1993. At yearend, the Company had interests in more than 1,400
producing wells, of which the Company operated over 1,100. Through a major joint
venture with UPRC, complementary acquisitions and an extensive leasing program,
the Company has accumulated up to 6,000 potential drilling locations in the
Wattenberg Field. The Company expects that over half of these sites will
ultimately prove attractive to develop. The Company expects to drill
approximately 500 wells per year in the Wattenberg Field for at least the next
several years.
At yearend 1993, the net proved reserves attributed to the Wattenberg
properties were 16.9 million barrels of oil and 229.9 Bcf of gas. The reserves
were attributable to 1,437 producing wells, 51 wells in progress, 1,102 proved
undeveloped locations and approximately 387 proved behind pipe zones. The
Company expects proved reserves to be assigned to other locations as drilling
progresses.
The Company acquired its first properties in Wattenberg during 1986. In
1990, it substantially increased its acreage position by acquiring rights to the
Codell and Niobrara formations underlying 32,985 net acres from Amoco Production
Company ("Amoco") for $14.4 million. Several farm-ins from Amoco in 1992,
financed primarily through a transfer of Section 29 tax credits, resulted in
earning additional Codell/Niobrara rights as well as rights to the Sussex,
J-Sand and Dakota formations in a number of locations. During 1993, a series of
purchases added nearly 9 MMBOE at a net cost of under $3.50 per barrel as well
as several pipeline and processing facilities that complement existing
facilities. See "-- Acquisition Program."
In early 1994, the Company finalized an agreement with UPRC under which the
Company has the right for up to six years to drill wells on locations of its
choosing on UPRC's previously uncommitted undeveloped acreage throughout the
Wattenberg area. This transaction substantially increased the Company's
Wattenberg undeveloped acreage inventory. Many of the locations have the
potential for improved economics through completion in one or more of the
Shannon, Sussex, J-Sand or Dakota formations, as well as the Codell and
Niobrara. During the venture's initial three-year term, the Company is required
to drill a minimum of 120, 120 and 60 wells per year. After the initial period,
the Company can, at its option, extend the venture annually for up to three
additional years by drilling at least 150 wells per year. There is no limit on
the maximum number of wells that can be drilled, and wells in excess of the
required minimum in any year will reduce the number of wells required in the
following year by up to 50%. If the Company drills less than the minimum number
of wells, it is required to pay UPRC $20,000 per well for the shortfall. On each
well that is drilled on UPRC's mineral acreage under the venture, UPRC retains a
15% mineral owner royalty and has the option either to receive an additional 10%
royalty interest after pay-out or to participate in the well as a 50% working
interest owner. On leasehold acreage, UPRC does not have the right to
participate in the well but will retain a royalty interest that will result in a
total royalty burden of 25%. As compensation for committing its acreage position
to the Company, UPRC was granted warrants to purchase two million shares of the
Company's Common Stock. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Development, Acquisition and
Exploration."
Drilling. The Company began drilling operations in Wattenberg in early
1991. From 1991 to December 1993, the Company expended $151.1 million to drill
667 wells, of which 323 were drilled in 1993. At yearend, 609 of these wells
were producing, 51 were in various stages of drilling and completion and seven
were dry holes.
The size of the Wattenberg drilling program has resulted in numerous
advantages. The Company acts as operator on all its development sites in the
Wattenberg Field and much of the acreage is held by production. As a result, the
Company has significant operational control over the timing of the development
program. The
16
<PAGE> 18
actual drilling locations and schedule are selected to minimize costs associated
with rig moves, surface facilities, location preparation and gathering system
and pipeline connections and to evaluate and quantify incremental reserve
potential across the acreage position.
The Company's success in continuing to reduce its costs of drilling and
operations, as well as applying new technology, will be important to the full
development of its undeveloped acreage in Wattenberg. The Company has selected
procedures for drilling and completing wells that it believes maximize
recoverable reserves and economics. The Company has also been able to reduce its
costs of drilling, completing and operating wells significantly by negotiating
favorable prices with suppliers of drilling and completion services because of
the size of its drilling program. These cost reductions often allow the Company
to earn an attractive rate of return even on lower reserve wells. The reductions
have been achieved by several methods. One of the most significant is the
formation of alliances with selected vendors who work with Company personnel to
improve coordination and reduce both parties' costs. The resultant reductions
are credited wholly or in large part to the Company while vendors' margins are
maintained or increased.
In addition to cost reduction, the Company seeks to employ new technology
or to creatively apply existing technology to reduce costs or to produce
reserves that would otherwise remain unrecovered. One example is the drilling of
four or more wells from a single drilling pad in residential areas, under
reservoirs and on inaccessible acreage.
The Codell formation, which is the primary objective of the drilling, is a
blanket siltstone formation that exists under much of the Wattenberg acreage at
depths of 6,700 to 7,500 feet. Codell reserves have a high degree of
predictability due to uniform deposition and gradual transition from high to low
gas/oil ratio areas. The Company generally dually completes the Niobrara chalk
formation, which lies immediately above the Codell, to enhance drilling
economics. The Codell/Niobrara wells produce most prolifically in the first six
to twelve months, after which production declines to a fraction of initial
rates. More than half of a typical well's reserves are recovered in the first
three years of production. As a result, each well contributes significantly more
production in its first year than in subsequent years. However, the declining
production of individual wells is expected to be offset by continuing
development drilling.
During 1992 and 1993, the Company expanded its drilling targets to include
both deeper and shallower formations. The J sand lies approximately 400 feet
below the Codell. It is a low permeability sandstone generally found to be
productive throughout the DJ Basin with performance varying proportionately with
porosity and thickness. The Dakota formation lies approximately 150 feet below
the J sand. It is a low permeability sand occasionally naturally fractured with
less predictable commercial accumulations and varied performance results. The
Sussex formation is at average depths of 4,500 feet. The Sussex sands were
deposited as bars and exhibit variable reservoir quality with a moderate degree
of predictability.
Because the Codell, Niobrara and J formations are continuous reservoirs
over a large portion of the DJ Basin, the Company believes that drilling in the
Wattenberg Field is relatively low risk. In addition, the Company has compiled a
comprehensive geologic and production database for approximately 12,000 wells
within a 4,350 square mile area between Denver and the Wyoming border and has
had considerable success in predicting variations in thickness, porosity,
gas/oil ratios and productivity. Of the 667 wells drilled between 1991 and 1993,
only seven have been dry holes. Dry holes cost an average of only $65,000 per
well. The average net cost of a completed well approximated $193,000 during 1993
with only 30 days usually elapsing between spud date and initial production.
CHEYENNE. During 1993, 29 wells were placed on stream in a shallow gas
producing area on the northeast flank of the DJ Basin. This project, known as
the Cheyenne Project, began with the acquisition of five shut-in gas wells in
1990 when the Company determined that it could capitalize on new open access
rules of the Federal Energy Regulatory Commission ("FERC") by constructing a
gathering system to transport gas to a nearby interstate pipeline. After
acquiring almost 50,000 acres of leases in the area and selling an approximate
27.5% interest to other parties on a promoted basis, the Company has drilled 54
successful wells and six dry holes in the area and constructed a gathering
system having a capacity of 10 MMcf per day to transport the gas to the
interstate pipeline. The Company currently operates 61 wells in this area that
produce from the Niobrara formation and plans to drill approximately 20
additional wells during 1994.
17
<PAGE> 19
EAST WASHAKIE
During 1993, the Company initiated a major project to apply the
cost-cutting and improved drilling and completion techniques learned in the
Wattenberg Field to develop fluvial Mesaverde sands in the eastern Washakie
Basin. An eleven well pilot project was completed in 1993 to test drilling and
completion techniques and confirm cost estimates. A second drilling program is
currently being initiated. After final evaluation of the drilling, the Company
may initiate a large scale drilling program in this area upon completion of a
required environmental impact statement. The environmental impact statement was
filed in October 1993, and clearance is currently expected in the second half of
1994. Depending on the timing of environmental clearance and continued
evaluation of drilling results, the Company expects to drill up to 60 wells in
East Washakie during 1994.
Since the mid-1980's, the Company's properties in the Barrel Springs Unit
and the Blue Gap Field of southern Wyoming, together with its gas gathering and
transportation facilities there, have been one of its most significant assets.
See "-- Properties" and "-- Gas Management." The Company currently operates 128
wells in this area and holds up to 1,200 potential drilling locations, 98 of
which were classified as proved undeveloped at yearend 1993. The Company
believes that more than half of the potential locations may ultimately prove
attractive to develop. The Company currently holds interests in 95,000 gross
(76,000 net) undeveloped acres in the Washakie Basin. This includes 36,000 gross
(32,000 net) undeveloped acres added during 1993.
WESTERN SLOPE
During 1993, the Company initiated the Western Slope Project by
establishing a sizable position in the Piceance Basin on the western slope of
Colorado and in the Uinta Basin in northeastern Utah. The Company formed the
53,000 acre Hunter Mesa Unit in the southeast corner of the Piceance Basin.
Through purchases and farmouts, the Company obtained a majority interest and
acts as unit operator. Immediately adjacent to the Hunter Mesa Unit, a 100%
working interest was purchased in the 26,000 acre Divide Creek Unit for $6.2
million. The acquisition of this Unit, which has six wells producing from the
Mesaverde and Cameo Coal formations, added 17.6 Bcf of proved gas reserves as
well as an established operating base. Near yearend, the Company also purchased
interests in 122 producing wells, 29 non-producing wells and 69 proved
undeveloped locations. In total, this purchase included 55,000 net acres in
various fields in the Piceance and Uinta Basins.
Through these purchases, farmouts and a leasing program, the Company
currently holds acreage with up to 1,000 potential drilling locations, of which
the Company believes 40% could ultimately prove to be attractive to develop. Of
these locations, 101 were classified as proved undeveloped at yearend 1993. The
development of the Mesaverde sands in the Piceance Basin began with the spudding
of the initial test well near the end of 1993. The development will continue
with a 10 well test program during 1994 to confirm cost estimates and improved
recovery techniques. If successful, the Company may drill up to 30 wells in 1994
and approximately 100 wells per year thereafter. The Company's ability to
continue to develop the Piceance Basin is in part dependent on arranging
gathering and transportation at a reasonable cost. The company is exploring
options for gathering and transporting future gas production, including the
possibility of constructing Company owned facilities.
OTHER DEVELOPMENT
At the end of 1992, the Company acquired interests in four large producing
fields in central Wyoming from a major oil company at a cost of $56.1 million.
Two of the fields, the Hamilton Dome and Riverton Dome Fields, are operated by
the Company. During 1993, the Company evaluated opportunities in the fields and
instituted programs to enhance production in the latter part of the year. In the
Hamilton Dome Field, improvement of the water injection system and completion of
two new wells increased daily production 8%
18
<PAGE> 20
above the levels projected at the time of the acquisition. A third well should
be completed in the second quarter of 1994. In the Riverton Dome Field,
workovers and recompletions increased daily production over 10% above the levels
projected at the time of the acquisition. Additional workovers and development
drilling are scheduled for both fields during 1994. The Company is attempting to
work with the major oil companies that operate the other two fields purchased,
both of which are producing slightly below acquisition projections.
The Company operates the Adair waterflood property in Gaines County, Texas,
which it purchased in September 1991. Initial development of the Adair Unit in
1992 cost approximately $1.7 million net to the Company. Based on production
response from the initial phase of development, the Company spent an additional
$.9 million in 1993 to conduct a pilot program which reduced well spacing on a
portion of the Unit. This program increased the unit production from 150 barrels
per day to 260 barrels per day. The Company plans to spend an additional $1.1
million to implement an infill development program throughout the Unit.
In the Giddings Field in Southeast Texas, the Company has undertaken a
horizontal drilling program to further exploit existing properties in the area.
During 1993, the Company spent $2.2 million to re-enter or drill 10 wells, of
which nine were completed and one abandoned. The Company is encouraged by the
results to date and plans to increase its expenditures in the field during 1994.
At yearend, 25 locations were classified as having proved undeveloped reserves.
ACQUISITION PROGRAM
The Company believes that acquisitions continue to be an attractive method
of increasing its reserve base and cash flow. In its acquisition efforts, the
Company plans to focus on purchasing properties that strengthen its strategic
position and complement its large-scale gas development projects in the Rockies,
as well as provide opportunities to establish meaningful positions in new areas.
From 1983 through 1993 the Company, on behalf of itself, its affiliates and
other investors, purchased oil and gas properties and related assets with an
aggregate cost of nearly $650 million. The Company actively seeks to acquire
incremental interests in existing properties, acreage with development
potential, gas gathering, transportation and processing facilities and related
assets, particularly in proximity to existing properties. Purchases of
incremental interests or adjacent properties are generally small in size but in
aggregate represent a sizeable opportunity that is relatively easy to pursue.
Due to its rate of return requirements and the high cost of pursuing
potential acquisitions, the Company generally prefers negotiated transactions to
auctions. Complex transactions involving legal, financial or operational
difficulties have frequently permitted purchase of assets at favorable prices.
Past acquisitions of corporations laid the groundwork for the Wattenberg hub,
and may in the future provide opportunities to expand in other areas.
Acquisitions of incremental interests are being given particular emphasis to
take advantage of systems and operational knowledge already in place. The
Company has extensive experience in completing numerous types of acquisitions
using varied financing sources in addition to internal cash flow.
During 1993 domestic acquisitions having a total cost of $51.0 million were
completed, primarily to strengthen Wattenberg and establish two new hubs that
the Company believes have the potential to develop into large scale gas
development projects. In Wattenberg a series of purchases added nearly 9 million
BOE of proved reserves at a net cost of under $3.50 per barrel as well as
several pipeline and processing facilities that complement the Company's
existing gathering systems. In the largest of these acquisitions, the Company
paid $19.7 million and, after an exchange of interests with a third party,
acquired an approximate 80% working interest in 153 producing wells and 284
undeveloped locations having total proved reserves estimated to exceed 7 million
BOE. A portion of the value of the transaction lay in the large volume of
undedicated gas located in close proximity to the Company's gas lines.
In the Washakie Basin, the Company expended over $7.8 million to acquire a
25% incremental interest in its Barrel Springs properties and interests in 44
producing wells and 7 undeveloped locations, as well as a gathering system that
expands the existing gathering infrastructure in the area. These acquisitions
added approximately 3.6 million BOE of proved reserves and, together with an
active leasing program, formed the basis for the East Washakie Project, the
Company's second operating hub in the Rockies. See "-- Development -- East
Washakie."
19
<PAGE> 21
Through three purchase transactions, as well as farmouts and leasing, the
Company established a substantial position in the Piceance and Uinta Basins
during 1993, laying the foundation of the Western Slope Project, a third gas
development hub in the Rockies. A $6.2 million purchase gave the Company a 100%
working interest in the 26,000 acre Divide Creek Unit in the southeast Piceance
Basin. The Company also formed the adjacent 53,000 acre Hunter Mesa Unit and
through purchases and farmouts obtained a majority working interest position and
became unit operator. Near yearend the Company also acquired interests in 122
producing wells, 29 non-producing wells and 69 proved undeveloped locations in
various fields in the Uinta and Piceance Basins. See "-- Development -- Western
Slope."
The following table summarizes acquisition activity since 1983:
<TABLE>
<CAPTION>
PURCHASE PRICE
---------------------------------
YEAR MAJOR ASSETS ACQUIRED COMPANY AFFILIATES TOTAL
---- --------------------------------------------- ------- ---------- ------
(MILLIONS)
<S> <C> <C> <C> <C>
1983 Louisiana gas pipeline $ 3.5 $ -- $ 3.5
1984 Various producing properties 27.8 -- 27.8
1985 Utah, Texas and Oklahoma properties 56.1 -- 56.1
1986 Colorado and Wyoming properties 61.8 15.4 77.2
1987 Mississippi and Colorado properties, Roggen
gas plant, Wyoming gas facilities 71.0 -- 71.0
1988 Various producing properties 33.8 18.5 52.3
1989 Various producing properties 12.3 56.9 69.2
1990 Wattenberg properties, incremental interests 161.2 (a) -- 161.2
1991 Waterflood properties, incremental interests 9.9 -- 9.9
1992 Wyoming properties, incremental interests 63.6 -- 63.6
1993 Colorado and Wyoming properties, incremental
interests, acreage 51.0 -- 51.0
------- ---------- ------
Total $552.0 $ 90.8 $642.8
------- ---------- ------
------- ---------- ------
</TABLE>
- ---------------
(a) Includes the acquisition of a publicly traded limited partnership managed
by the Company.
GAS MANAGEMENT
General. The Company expanded its gas gathering and processing capacity
during 1993 with the construction of additonal gathering facilities and
expansion of the Roggen plant in Wattenberg, as well as the acquisition of
additional gas facilities in Wattenberg and in Wyoming. By yearend, operated
processing capacity had increased to more than 80 MMcf per day and gathering
system capacity was increased to more than 200 MMcf per day, while marketed net
volumes reached 100 MMcf per day. The gas management unit complements the
Company's development and acquisition activities by providing additional cash
flow and enhancing returns. The segment is also increasingly profitable in its
own right. During 1993, gross margin increased by approximately 23% to $10
million. See "-- Customers and Marketing."
Colorado Facilities. The largest concentration of gas facilities is in the
Wattenberg area. These facilities include two major gathering systems, the
Enterprise system and Energy Pipeline, the Roggen processing plant, and a number
of minor facilities. By yearend 1993, the Roggen plant capacity had reached 60
MMcf per day. During the fourth quarter of 1993, average throughput had reached
54 MMcf per day. The plant is expected to process gas from currently undeveloped
locations, new third party sources and permanently released locations on acreage
acquired from Amoco, plus additional gas from current suppliers. Gas developed
through the UPRC joint venture is not dedicated to a processing plant and will
significantly increase future volumes of gas available to be processed in the
Company's facilities.
The gas produced from the majority of the new Wattenberg wells drilled on
acreage acquired from Amoco is dedicated for the life of the lease to Amoco's
Wattenberg gas processing plant. If Amoco were unable to process Company
production at its plant for any reason, including a shut-down of the plant, it
would
20
<PAGE> 22
have a short-term adverse impact on the Company. The Company has expanded its
processing facilities in Wattenberg in order to process Company and third party
gas that is not dedicated to Amoco. The Company intends to continue to expand
its facilities during 1994 to handle additional gas developed through continued
drilling activity. These facilities will also enable the Company to partially
mitigate the effects of significant downtime at the Amoco plant.
At the Roggen plant, gas is processed to recover gas liquids, primarily
propane and a butane/gasoline mix, from gas supplied by the Company and third
parties. The liquids are then sold separately from the residue gas. The liquids
are marketed to local and regional distributors and the residue gas is sold to
utilities, independent marketers and end users through an intrastate system and
the Colorado Interstate Gas ("CIG") pipeline. A liquids line permits the direct
sale of Roggen's liquids products through an Amoco line to the major interchange
at Conway, Kansas. In addition, Phillips Petroleum began reactivation of an old
interconnect, which should be operational by the end of the second quarter of
1994, which will connect the Roggen plant to the Phillips Powder River liquids
pipeline.
The Company's Wattenberg gathering systems include over 600 miles of
pipeline that collect, compress and deliver gas from over 1,400 wells to the
Roggen plant. During 1993, the Company substantially increased the capacity of
its gathering systems through the expansion of existing facilities and the
acquisition of new facilities. The Company also completed the second phase of
the Enterprise system during 1993. Enterprise collects a portion of the
Company's gas produced from acreage acquired from Amoco and delivers it to the
Amoco Wattenberg plant. Enterprise includes 26 miles of 20" diameter trunk and
29 miles of associated lateral gathering lines connecting 20 of the Company's
existing central delivery points. As a result of the completion of the second
phase, the Enterprise system has the capacity to deliver 75 MMcf per day to the
Amoco Wattenberg plant.
During 1993, the Company also expanded its gathering system by constructing
a nine mile 16" pipeline loop on the western portion of its Energy Pipeline
system, which came on line in October 1993. This expansion provides pressure
relief and additional capacity for further development in the area. In addition,
the Company acquired a pipeline that expands its gathering capacity to the north
of the Roggen plant, which may be converted to a residue line allowing for the
delivery of residue gas from the tailgate of the Roggen plant to the Williams
Natural Gas System.
The Company has negotiated a transportation arrangement with CIG that, in
conjunction with the gathering fees to be charged on the Enterprise system,
allows the delivery of gas to the Amoco Wattenberg plant at a favorable rate. In
addition to reducing the Company's exposure to future escalation in gathering
costs applicable to the Company's production, Enterprise provides an enhanced
degree of operational control. Because the Enterprise system interconnects with
the Company's other Colorado facilities, the Roggen plant and other plants in
the area can serve as a backup for processing a portion of the Company's gas in
the event of any curtailment at the Amoco Wattenberg plant. While shut downs of
Amoco's plant reduce the Company's production, diversion of gas to the Roggen
plant and, to a lesser degree, two other plants in the area, enabled the Company
to produce significant volumes that would have otherwise been curtailed.
Given the continued expansion of the Company's drilling program in 1994 and
beyond and the potential for third party connections, the Company is continuing
to explore opportunities to expand its Wattenberg gas facilities. Subsequent to
yearend, the decision was made to double the Company's processing capacity
through the construction of a new plant on the west side of the field. The new
plant is scheduled to be operational in late 1994.
Wyoming Facilities. The Company operates two pipeline systems in Wyoming
that enhance its ability to market gas produced from its properties in the
Washakie Basin. Wyoming Gathering and Production Company ("WYGAP") gathers gas
produced from 53 operated wells in the Barrel Springs Unit. The system has a
capacity of 26 MMcf per day. Throughput averaged 10 MMcf and 14 MMcf per day
during 1992 and 1993, respectively. WYGAP delivers gas to Western Transmission
Corporation ("Westrans"), a Company-owned interstate pipeline system which
operates under FERC jurisdiction. At the beginning of 1993, the Company assumed
operations of CIG's Carbon County Blue Gap gathering system pursuant to a lease.
The Company has exercised an option to acquire the system subject to regulatory
approval. The Company also
21
<PAGE> 23
purchased Blue Gap gathering facilities formerly owned by Williams Field
Services. Both systems extend the Company's transportation capabilities to the
south.
The Westrans system consists of a 26-mile main pipeline, a smaller 9.2-mile
line and related gathering facilities. The system gathers and transports gas
under open access transportation service agreements on an interruptible basis.
The main line extends from the Washakie Basin area of Carbon County, Wyoming to
connections with Williams' and CIG's interstate pipelines in Sweetwater County,
Wyoming. Gas transported on Westrans also has access to California markets
through the Kern River Pipeline which was completed in February 1992 via
interconnects with CIG and Williams. Westrans is located near several other
interstate pipelines, providing the potential for additional interconnects that
offer alternative transportation routes to end markets. In addition to the gas
from WYGAP, which accounts for over 90% of its volumes, Westrans transports
volumes from other operated wells and third parties. The capacity of Westrans is
65 MMcf per day. Throughput volumes generally vary from 13 to 20 MMcf per day.
Daily throughput averaged 15 MMcf during 1992 and 1993. If the planned
acceleration of drilling in East Washakie occurs, volumes of gas on the
Company's gas pipeline in the area may be substantially increased. As the East
Washakie Project progresses, the Company expects to further expand its gathering
network in the area.
Other Facilities. The Company expanded its gathering system in southern
Nebraska during 1993 to gather gas produced from newly developed Cheyenne County
properties for delivery to various markets accessible through an interstate
pipeline. The Cheyenne system includes 9.5 miles of 4" to 6" trunkline and 6
miles of 3" lateral gathering lines. During the fourth quarter of 1993,
throughput averaged 3 MMcf per day of gas from 60 producing wells. Included in
the December 1992 acquisition of Wyoming properties was a gas processing plant
in Fremont County, Wyoming. The plant has a 20 MMcf per day capacity with
current throughput of 8 MMcf per day from the 28 producing wells in the Riverton
Dome Field.
In conjunction with the growing level of acquisition and development
activity in the Western Slope Project, the Company is actively exploring
alternatives to gather and transport future gas production, including the
possible construction of a Company-owned gathering and transportation line.
Traditionally, the lack of sufficient pipeline capacity has been a major
deterrent to development in the Piceance Basin.
INTERNATIONAL ACTIVITIES
The Company's strategy internationally is to develop projects that have the
potential for a major impact in the future. The Company attempts to structure
the projects to limit its financial exposure and mitigate political risk by
minimizing financial commitments in the early phases of a project and seeking
industry partners and investors to fund the majority of the equity capital. A
wholly owned subsidiary of the Company, SOCO International, Inc., is the holding
company for all the Company's international operations. During 1993, the Company
purchased from Edward T. Story, President of SOCO International, the 10% of SOCO
International held by him and canceled Mr. Story's option to purchase an
additional 20% of the company. In connection with the purchase, the Company
granted Mr. Story an option to purchase 10% of the currently outstanding shares
of SOCO International, which is financed primarily by Company loans, through
April 1998 for $600,000. The option price is subject to adjustment in certain
circumstances.
Russian Joint Venture. In early 1993, the Company formed Permtex, a joint
drilling venture with Permneft, a Russian oil and gas company, to develop four
major proven oil fields located in the Volga-Urals Basin of the Perm Region of
Russia, approximately 800 miles east of Moscow. During 1993, Permtex was
registered by the Russian authorities, representing governmental approval of the
terms of the joint venture and authorization for Permtex to commence business.
In early 1994, the Company executed a finance and insurance protocol with OPIC,
an agency of the United States government that provides financing and political
risk insurance for American investment in developing countries, related to the
financing of Permtex.
Permtex holds exploration and development rights to over 300,000 acres in
the Volga-Urals Basin. The contract area contains four major fields and four
minor fields as well as a number of prospects. The Company estimates that the
four major fields could ultimately produce 115 million barrels of oil. The major
fields have been delineated through 45 previously drilled wells, none of which
had been placed on production as of yearend 1993. It is anticipated that 25 of
the existing wells will be placed on production, of which four should
22
<PAGE> 24
go on stream in the first half of 1994, and that 400 additional development
wells will be drilled over the next five to ten years. The joint venture will
primarily utilize Russian personnel and equipment and Western technology under
joint Russian/American management.
As of March 1, 1994, the Company holds a 28.1% interest in Permtex, after
giving effect to the purchases by each of Command, the Company's Australian
affiliate, and Holland Sea Search NV ("HSSH"), a Dutch affiliate of Command, of
6.25% interests in Permtex. Recently, a major Japanese trading company has also
committed to purchase a 10 to 20% interest in Permtex, which would reduce the
Company's interest to 20.6% if the full amount is purchased.
Command Petroleum Holdings NL. In May 1993, the Company purchased 42.8% of
the outstanding shares of Command for approximately $18.2 million. At the time
of the purchase, Thomas J. Edelman, President of the Company, Edward T. Story,
President of SOCO International, and two other designees were elected to
Command's eight-person board of directors. Command is an exploration and
production company based in Sydney, Australia and listed on the Australian Stock
Exchange. Following a private placement of equity securities in early 1994,
Command had working capital of $35 million and no debt. Its current market
capitalization approximates US$150 million. Command currently holds interests in
more than 20 exploration permits and production licenses primarily in the
Southwestern Pacific Rim including Australia and Papua New Guinea. Until
recently, Command held a 28.7% interest in HSSH, a publicly traded Dutch
exploration and production company whose primary asset is an interest in the
North Sea's Markham gas field. After yearend 1993, Command increased its
position in HSSH to nearly 48%. Recently, Command purchased a 6.25% interest in
Permtex, acquired an interest in an offshore Tunisian permit operated by
Marathon Oil Company and acquired an 11.4% interest in the East Shabwa Contract
Area in Yemen. Command funded the expenditures with a portion of a $16.4 million
privately placed equity offering which reduced the Company's ownership to 35.7%.
If as expected, all of Command's warrants expiring in November 1994 are
exercised, the Company's ownership would be decreased to 29.6%.
The Company believes that Command's exploration expertise, experienced
technical staff and inventory of prospects complement the Company's acquisition
and development expertise and position the Company to play a larger role in
overseas development of oil and gas reserves. In addition, Command and HSSH
provide access to international capital markets which could provide additional
sources of financing for international projects.
Mongolia. The Company further expanded its international efforts by
entering into a production sharing agreement with Mongol Petroleum Company, the
national oil company of Mongolia. The Company believes this agreement is the
first such contract ever awarded by Mongolia. The agreement covers 11,400 square
kilometers, or approximately 2.8 million gross acres, in the Tamstag Basin of
northeastern Mongolia. In addition, the Company received a right of first
refusal from Mongol Petroleum for the adjacent block which covers 11,130 square
kilometers. As a consequence, the Company controls over 5 million acres in this
basin which, although previously unexplored and remote from existing markets, is
highly prospective. These concessions offset the Hailar Basin of China, a
portion of which is included in the China National Petroleum Corporation's round
of invitations for bidding in 1994. During 1993, the Company initiated seismic
work to broadly define the subsurface and this work is expected to continue into
1995.
Tunisia. During 1993 the Company completed its 400 kilometer seismic
acquisition program in the Fejaj Permit area of central Tunisia. The permit area
encompasses approximately 1.2 million gross acres and is predominately onshore,
with a small portion extending into the Gulf of Gabes. After the Company
integrates the newly acquired seismic work with over 1,400 kilometers of
reprocessed data and extensive geological field information, the Company will
seek industry partners for a 1995 exploratory well.
23
<PAGE> 25
PRODUCTION, REVENUE AND PRICE HISTORY
The following table sets forth information regarding net production of
crude oil and liquids and natural gas, revenues and expenses attributable to
such production and to natural gas transportation, processing and marketing and
certain price and cost information for the five years ended December 31, 1993.
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
1989 1990 1991 1992 1993
------- ------- ------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PRICE AND PER BARREL EXPENSES)
<S> <C> <C> <C> <C> <C>
PRODUCTION
Oil (MBbl)............................... 277 1,049 1,487 1,776 3,451
Gas (MMcf)............................... 4,027 12,769 18,382 23,090 35,080
MBOE(a).................................. 948 3,497 4,937 5,989 9,297
REVENUES
Oil production........................... $ 5,069 $24,806 $30,667 $ 33,512 $ 53,174
Gas production(b)........................ 7,410 24,997 34,677 43,851 71,467
------- ------- ------- -------- --------
Subtotal......................... 12,479 49,803 65,344 77,363 124,641
------- ------- ------- -------- --------
Transportation, processing and
marketing............................. 10,885 29,442 21,459 38,611 94,839
Interest and other....................... 3,179 2,928 5,698 4,198 10,405
------- ------- ------- -------- --------
Total............................ $26,543 $82,173 $92,501 $120,172 $229,885
------- ------- ------- -------- --------
------- ------- ------- -------- --------
OPERATING EXPENSES
Production............................... $ 4,930 $18,088 $24,882 $ 28,057 $ 44,901
Transportation, processing and
marketing............................. 9,168 24,103 14,202 30,469 84,840
------- ------- ------- -------- --------
$14,098 $42,191 $39,084 $ 58,526 $129,741
------- ------- ------- -------- --------
------- ------- ------- -------- --------
GROSS MARGIN............................... $12,445 $39,982 $53,417 $ 61,646 $100,144
------- ------- ------- -------- --------
------- ------- ------- -------- --------
PRODUCTION DATA
Average sales price(c)
Oil (Bbl)............................. $ 18.30 $ 23.65 $ 20.62 $ 18.87 $ 15.41
Gas (Mcf)(a)(b)....................... 1.65 1.69 1.68 1.74 1.94
BOE(a)................................ 12.97 14.18 13.24 12.92 13.41
Average operating expense/BOE............ $ 5.20 $ 5.17 $ 5.04 $ 4.68 $ 4.83
</TABLE>
- ---------------
(a) Gas production is converted to oil equivalents at the rate of 6 Mcf per
barrel except for Thomasville production which through 1992 was converted
based on its price equivalency to the Company's other gas. Average gas
prices exclude Thomasville production. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
(b) Sales of natural gas liquids are included in gas revenues. Gas revenues for
the year ended December 31, 1989 and 1990 include nonrecurring receipts of
$183,000 and $219,000, respectively, in settlement of contract claims, which
have been excluded from average sales price computations.
(c) The Company estimates that its composite net wellhead prices at December 31,
1993 were approximately $2.11 per Mcf of gas and $11.49 per barrel of oil.
24
<PAGE> 26
DRILLING RESULTS
The following table sets forth information with respect to wells drilled
during the past three years. The information should not be considered indicative
of future performance, nor should it be assumed that there is necessarily any
correlation between the number of productive wells drilled, quantities of
reserves found or economic value. Productive wells are those that produce
commercial quantities of hydrocarbons whether or not they produce a reasonable
rate of return.
<TABLE>
<CAPTION>
1991 1992 1993
----- ----- -----
<S> <C> <C> <C>
Development wells
Productive
Gross.................................................. 143.0 241.0 382.0
Net.................................................... 117.2 207.5 316.0
Dry
Gross.................................................. 3.0 6.0 10.0
Net.................................................... 2.8 2.7 5.5
Exploratory wells
Productive
Gross.................................................. 5.0 -- 2.0
Net.................................................... 1.8 -- 2.0
Dry
Gross.................................................. 5.0 -- 6.0
Net.................................................... 1.5 -- 3.3
</TABLE>
As of December 31, 1993, the Company had 61 gross (50.9 net) development
wells in progress. Between yearend and February 28, 1994, the Company spudded
118 wells. At that date 135 gross (116.7 net) wells, including wells in progress
at yearend, had been completed, two wells (1.5 net) had been abandoned and 42
gross (36.3 net) development wells were in progress.
FIELD OPERATIONS
In its capacity as operator, the Company supervises day-to-day field
activities, generally employing a combination of its personnel and contract
pumpers. The Company maintains eight district field offices and one division
office.
As operator, the Company charges overhead fees to all working interest
owners according to the applicable operating agreements. As of the end of 1991,
1992 and 1993, respectively, the Company operated 1,442, 1,745 and 2,176 wells.
The Company received overhead reimbursements for operations and drilling of
$10.1 million, $12.9 million and $15.5 million during 1991, 1992 and 1993,
respectively (including reimbursements attributable to the Company's interest).
The increase in reimbursements is attributable to the increase in operated
drilling and producing wells and contractual escalations. Based on the time
allocated to operations, these reimbursements in aggregate generally have
exceeded the costs of such activities.
PROPERTIES
The Company's reserves are concentrated in several major producing areas.
These include the Wattenberg Field in Colorado, central and southern Wyoming,
the Piceance and Uinta Basins in the Western Slope of Colorado and Utah, the
Giddings area in South Texas, the Spraberry Trend in West Texas, waterflood
units in Texas, and the Appalachian Basin in eastern Ohio and Pennsylvania.
At December 31, 1993, the Company had interests in 5,122 gross (2,187 net)
producing oil and gas wells located in 15 states and in the Gulf of Mexico. As
of December 31, 1993, estimated proved reserves totalled 31.9 million barrels of
oil and 430.1 Bcf of gas. In addition to its oil and gas reserves, the Company
holds interests in nine gas transportation and processing facilities. See
"-- Gas Management."
25
<PAGE> 27
Significant Properties. Although the Company's properties are widely
dispersed geographically, emphasis has been placed on establishing hubs in
certain producing basins. Interests in five producing areas accounted for
approximately 90% of Pretax PW10% Value at December 31, 1993. This concentration
of assets results in economic efficiencies in the management of assets and
permits identification of complementary acquisition candidates. Summary
information regarding the five most significant properties is set forth below.
<TABLE>
<CAPTION>
PROVED RESERVE
QUANTITIES PRETAX PW10% VALUE
------------------------ ------------------------
CRUDE OIL NATURAL
AND LIQUIDS GAS AMOUNT PERCENT
----------- -------- -------------- -------
(MBBL) (MMCF) (IN THOUSANDS)
<S> <C> <C> <C> <C>
DJ Basin (CO, NE).......................... 16,984 242,155 $245,617 62.9%
East Washakie (WYO)........................ 1,334 72,871 41,903 10.7
Central Wyoming (WYO)...................... 7,207 28,913 30,905 7.9
Western Slope (CO & UT).................... 439 41,070 22,113 5.7
Giddings Field (TX)........................ 752 7,987 10,960 2.8
----------- -------- -------------- -------
Subtotal......................... 26,716 392,996 351,498 90.0
Other...................................... 5,214 37,093 38,911 10.0
----------- -------- -------------- -------
Total............................ 31,930 430,089 $390,409 100.0%
----------- -------- -------------- -------
----------- -------- -------------- -------
</TABLE>
Proved Reserves. The following table sets forth estimated yearend proved
reserves for the three years ended December 31, 1993.
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1991 1992 1993
------- ------- -------
<S> <C> <C> <C>
Crude oil and liquids (MBbl)
Developed........................................... 9,094 21,116 18,032
Undeveloped......................................... 10,584 11,086 13,898
------- ------- -------
Total....................................... 19,678 32,202 31,930
------- ------- -------
------- ------- -------
Natural gas (MMcf)
Developed........................................... 136,229 194,621 268,349
Undeveloped......................................... 110,940 93,037 161,740
------- ------- -------
Total....................................... 247,169 287,658 430,089
------- ------- -------
------- ------- -------
Total MBOE (a).............................. 66,641 84,393 103,612
------- ------- -------
------- ------- -------
</TABLE>
- ---------------
(a) Natural gas reserves are converted to oil equivalents at the rate of 6 Mcf
per barrel, except Thomasville gas reserves prior to 1993. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
The following table sets forth pretax future net revenues from the
production of proved reserves and the Pretax PW10% Value of such revenues.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
-----------------------------------------
DEVELOPED UNDEVELOPED(A) TOTAL
--------- -------------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
1994............................................ $ 81,401 $(24,109) $ 57,292
1995............................................ 59,421 1,220 60,641
1996............................................ 47,148 8,472 55,620
Remainder....................................... 286,510 228,209 514,719
--------- -------------- --------
Total................................. $ 474,480 $213,792 $688,272
--------- -------------- --------
--------- -------------- --------
Pretax PW10% Value.............................. $ 297,638 $ 92,771 $390,409(b)
--------- -------------- --------
--------- -------------- --------
</TABLE>
- ---------------
(a) Net of estimated capital costs, including estimated costs of $68.9 million
during 1994.
(b) The after tax PW10% value of proved reserves totalled $340.5 million at
yearend 1993.
26
<PAGE> 28
The quantities and values in the preceding tables are based on prices in
effect at December 31, 1993, averaging $11.49 per barrel of oil and $2.11 per
Mcf of gas. Price reductions decrease reserve values by lowering the future net
revenues attributable to the reserves and will reduce the quantities of reserves
that are recoverable on an economic basis. Price increases have the opposite
effect. Any significant decline in prices of oil or gas could have a material
adverse effect on the Company's financial condition and results of operations.
Proved developed reserves are proved reserves that are expected to be
recovered from existing wells with existing equipment and operating methods.
Proved undeveloped reserves are proved reserves that are expected to be
recovered from new wells drilled to known reservoirs on undrilled acreage for
which the existence and recoverability of such reserves can be estimated with
reasonable certainty, or from existing wells where a relatively major
expenditure is required to establish production.
Future prices received for production and future production costs may vary,
perhaps significantly, from the prices and costs assumed for purposes of these
estimates. There can be no assurance that the proved reserves will be developed
within the periods indicated or that prices and costs will remain constant. With
respect to certain properties that historically have experienced seasonal
curtailment, the reserve estimates assume that the seasonal pattern of such
curtailment will continue in the future. There can be no assurance that actual
production will equal the estimated amounts used in the preparation of reserve
projections.
The present values shown should not be construed as the current market
value of the reserves. The 10% discount factor used to calculate present value,
which is specified by the Securities and Exchange Commission ("SEC"), is not
necessarily the most appropriate discount rate, and present value, no matter
what discount rate is used, is materially affected by assumptions as to timing
of future production, which may prove to be inaccurate. For properties operated
by the Company, expenses exclude the Company's share of overhead charges. In
addition, the calculation of estimated future net revenues does not take into
account the effect of various cash outlays, including, among other things,
general and administrative costs and interest expense.
There are numerous uncertainties inherent in estimating quantities of
proved reserves and in projecting future rates of production and timing of
development expenditures. The data in the above tables represent estimates only.
Oil and gas reserve engineering must be recognized as a subjective process of
estimating underground accumulations of oil and gas that cannot be measured in
an exact way, and estimates of other engineers might differ materially from
those shown above. The accuracy of any reserve estimate is a function of the
quality of available data and engineering and geological interpretation and
judgment. Results of drilling, testing and production after the date of the
estimate may justify revisions. Accordingly, reserve estimates are often
materially different from the quantities of oil and gas that are ultimately
recovered.
Netherland, Sewell & Associates, Inc. ("NSAI"), independent petroleum
consultants, prepared estimates of or audited the Company's proved reserves
which collectively represent more than 80% of Pretax PW10% Value as of December
31, 1993. Approximately 38% of the yearend Pretax PW10% Value was estimated
internally by the Company and 62% was estimated independently by NSAI. No
estimates of the Company's reserves comparable to those included herein have
been included in reports to any federal agency other than the SEC.
Producing Wells. The following table sets forth certain information at
December 31, 1993 relating to the producing wells in which the Company owned a
working interest. The Company also held royalty interests in 240 producing
wells. Wells are classified as oil or gas wells according to their predominant
production stream.
<TABLE>
<CAPTION>
AVERAGE
PRINCIPAL GROSS NET WORKING
PRODUCT STREAM WELLS WELLS INTEREST
----------------------------------------------------- ----- ----- -------
<S> <C> <C> <C>
Crude oil and liquids................................ 3,026 1,297 43%
Natural gas.......................................... 2,096 890 42%
----- ----- -------
Total...................................... 5,122 2,187 43%
----- ----- -------
----- ----- -------
</TABLE>
27
<PAGE> 29
CUSTOMERS AND MARKETING
The Company's oil and gas production is principally sold to refiners and
others having pipeline facilities near its properties. Where there is no access
to gathering systems, crude oil is trucked to storage facilities. In 1992 and
1993, Amoco accounted for approximately 27% and 12% of revenues, respectively,
as the result of the contractual dedication, which terminated at the end of
1993, of a portion of the Company's natural gas and natural gas liquids produced
from certain of its Wattenberg acreage. Historically, this arrangement provided
for average prices in excess of spot due to participation in certain fixed price
contracts, many of which are expected to expire over the next two years. The
Company exercised its option to release its natural gas and natural gas liquids
and began marketing its production beginning January 1, 1994. The Company
believes, however, that it can obtain pricing comparable to that which would
have been obtainable through Amoco. The marketing of oil and gas by the Company
can be affected by a number of factors that are beyond its control and whose
future effect cannot be accurately predicted. The Company does not believe,
however, that the loss of any of its customers would have a material adverse
effect on its operations.
In addition to marketing a significant portion of its own gas, in 1992 the
Company initiated an effort to supplement its cash flow through the purchase and
resale of gas owned by third parties. Gross margins during 1992 and 1993 from
third party marketing activities was $.6 million and $1.2 million, respectively,
as average third party volumes increased from 58.7 to 89.9 MMcf per day. The
Company expects to continue increasing its role in third party gas marketing.
In June 1991, the Company entered into a contract to supply gas to a
cogeneration facility through August 2004. The contract calls for the Company to
supply 10,000 MMBtu per day. This plant, which requires up to 24,500 MMBtu per
day of gas, began operations in 1989 and is located at a manufacturing facility
in Oklahoma City. The facility has firm fifteen-year sales agreements with a
utility company for electricity and with a tire manufacturer for steam. The
effect of this contract depends on market prices for gas and its choice of
alternative sources of gas (including the spot market) to meet its supply
commitments. Gross margin generated from the contract was approximately $1.5
million for both 1991 and 1992. A contractual limitation of the contract sales
price and rising gas purchase costs resulted in a net loss of $267,000 on the
contract during 1993. At present gas price levels, the Company foresees
continued negative or breakeven margins for this contract through July 1994. At
that time, a change in the pricing formula should result in improved margins.
DESCRIPTION OF SIRENS
The SIRENs are to be issued under an Indenture to be dated as of April 1,
1994 (the "Indenture"), between the Company, as issuer, and Texas Commerce Bank
National Association, as trustee (the "Trustee"), a copy of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
terms of the Indenture are governed by certain provisions contained in the Trust
Indenture Act of 1939, as amended. The following summaries of certain provisions
of the Indenture do not purport to be complete, and where particular provisions
of the Indenture are referred to, such provisions, including definitions of
certain terms capitalized in this Prospectus, are incorporated by reference as a
part of such summaries, which are qualified in their entirety by reference to
the provisions of the Indenture. The section ("Section") and article ("Article")
references appearing below are to sections and articles of the Indenture.
GENERAL
The SIRENs will be unsecured subordinated obligations of the Company, will
mature on March 31, 2001, and will be in the aggregate principal amount of
$100,000,000 ($115,000,000 aggregate principal amount if the Underwriters'
over-allotment option is exercised in full). The SIRENs will bear interest at
the rate of percent per annum from the date of issuance to and including
March 31, 1997 and will bear interest at the rate of percent per annum from
and including April 1, 1997 to maturity or earlier redemption. Interest will be
payable semi-annually on March 31 and September 30 of each year, commencing
September 30, 1994, to the persons in whose names such SIRENs (or any
predecessor SIRENs) are registered at the close of business on the March 15 or
September 15 preceding such Interest Payment Date
28
<PAGE> 30
(Sections 301 and 307). The SIRENs will be treated for tax purposes as being
issued with original issue discount. See "Certain Federal Income Tax
Considerations -- Original Issue Discount."
The Indenture does not limit the incurrence of additional indebtedness,
including Senior Indebtedness, by the Company.
FORM, DENOMINATION AND REGISTRATION
The statements set forth herein under "Form, Denomination and Registration"
and "Definitive Form of SIRENs" include summaries of certain rules and operating
procedures of The Depository Trust Company ("DTC") which affect transfers of
interests in the Global Note (as hereinafter defined).
Although DTC has agreed to the procedures described below in order to
facilitate transfers of SIRENs among participants of DTC, DTC is under no
obligation to perform or continue to perform such procedures and such procedures
may be discontinued at any time. Neither the Company nor the Security Registrar
or the Trustee will have any responsibility for the performance by DTC
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
The SIRENs will be issued in the form of one or more global securities
(collectively, the "Global Note") registered in the name of Cede & Co. ("Cede"),
as nominee of DTC. The Global Note will be held by the Security Registrar, as
custodian for DTC. The SIRENs will be issued only in fully registered form,
without coupons, in denominations of $1,000 and any integral multiple thereof
(Section 302).
Except as set forth below, the Global Note may be transferred, in whole or
in part, only to another nominee of DTC or to a successor of DTC or its nominee.
Beneficial interests in the Global Note will be represented through
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants in DTC. Investors may hold SIRENs directly
through DTC if they are participants in DTC or indirectly through organizations
that are participants in DTC.
DTC may grant proxies or otherwise authorize DTC participants (or persons
holding beneficial interests in the SIRENs through such DTC participants) to
exercise any rights of a holder or take any other actions a holder is entitled
to take under the Indenture. Under its usual procedures, DTC will mail an
omnibus proxy to the Company assigning Cede's consenting or voting rights to
those DTC participants to whose accounts the SIRENs are credited on a record
date as soon as possible after such record date.
Persons who are not DTC participants may beneficially own SIRENs held by
DTC only through direct or indirect participants in DTC. So long as Cede, as the
nominee of DTC, is the registered owner of the Global Note, Cede for all
purposes will be considered the sole holder of the SIRENs under the Indenture.
Except as provided below under "Definitive Form of SIRENs," holders of
beneficial interests in the Global Note will not be entitled to have SIRENs
registered in their names, will not receive or be entitled to receive physical
delivery of SIRENs in definitive form, and will not be considered the holders
thereof under the Indenture.
Because DTC can only act on behalf of DTC participants, who in turn act on
behalf of indirect DTC participants and certain banks, the ability of a holder
of a beneficial interest in the Global Note to pledge such interest to persons
or entities that do not participate in the DTC system, or otherwise take actions
in respect of such interest, may be limited by the lack of a physical
certificate for such interest.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). DTC was created to hold
securities for its participants and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical movement of certificates. DTC participants include securities brokers
and dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Underwriters. Indirect access to the
29
<PAGE> 31
DTC system also is available to indirect DTC participants such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a DTC participant, either directly or indirectly.
PAYMENT
Payment of principal of and interest on the Global Note will be made to
Cede, the nominee for DTC, as the registered owner. The principal of and
interest on the SIRENs will be payable in U.S. dollars or in such other coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Upon receipt of any payment of interest on the Global Note, DTC shall
immediately credit DTC participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amounts
of the Global Note as shown on the records of DTC. Payments by DTC participants
to owners of beneficial interests in the Global Note held through such
participants will be the responsibility of such participants, as is now the case
with securities held for the accounts of customers registered in "street name."
Neither the Company nor the Security Registrar or 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 the Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
DEFINITIVE FORM OF SIRENS
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 90 days, the Company
will issue SIRENs in definitive form in exchange for the Global Note (Section
305).
CONVERSION RIGHTS
The SIRENs will be convertible, in whole or from time to time in part (in
denominations of $1,000 or integral multiples thereof), at the option of the
holder thereof, into Common Stock of the Company, initially at the conversion
price stated on the cover page hereof, at any time prior to maturity, unless
previously redeemed by the Company. In the case of SIRENs called for redemption,
conversion rights will terminate at the close of business on the fifth business
day preceding the Redemption Date. Notwithstanding anything to the contrary in
the foregoing, the SIRENs will not be convertible at any time when payments on
the SIRENs are prohibited under the subordination provisions of the Indenture as
described under "-- Subordination of SIRENs" (Section 1201).
The SIRENs may be presented for conversion at the office or agency
maintained by the Company for such purpose, which will initially be the office
of the Trustee located at 80 Broad Street, Fourth Floor, New York, New York
10004 (Section 1202).
If the Company, by dividend or otherwise, declares or makes a distribution
on its Common Stock of the type referred to in clause (iv) or (v) below, the
holder of each SIREN, upon the conversion thereof subsequent to the close of
business on the date fixed for the determination of stockholders entitled to
receive such distribution and prior to the effectiveness of the conversion price
adjustment in respect of such distribution pursuant to clause (iv) or (v) below,
will be entitled to receive for each share of Common Stock into which such SIREN
is converted the portion of the evidences of indebtedness, shares of capital
stock, cash and other assets so distributed applicable to one share of Common
Stock; provided, however, that the Company may, with respect to all holders so
converting, in lieu of distributing any portion of such distribution not
consisting of cash or securities of the Company, pay such holder cash in an
amount equal to the fair market value thereof, as determined in good faith by
the Board of Directors (Section 1201).
The conversion price will be subject to adjustment in certain events
including: (i) dividends (and other distributions) payable in Common Stock on
any class of capital stock of the Company; (ii) the issuance to all holders of
Common Stock of rights, warrants or options entitling them to subscribe for or
purchase Common Stock at less than the current market price (as provided in the
Indenture); provided, however, that if such
30
<PAGE> 32
rights, warrants or options are only exercisable upon the occurrence of certain
triggering events, then the conversion price will not be adjusted until such
triggering events occur; (iii) subdivisions and combinations of Common Stock;
(iv) distributions to all holders of Common Stock of evidences of indebtedness
of the Company, shares of any class of capital stock, cash or other assets
(including securities, but excluding those dividends, rights, warrants, options
and distributions referred to in clauses (i) and (ii) above and excluding
dividends and distributions exclusively paid in cash up to the greater of (x)
retained earnings of the Company on the date such distribution or dividend was
declared or (y) Net Income (as defined below) of the Company during the four
full fiscal quarters preceding the date such distribution or dividend was
declared, and other than in connection with a tender offer or other negotiated
purchase made by the Company or any Subsidiary for all or a portion of the
Common Stock); provided, however, that if any rights, warrants or options in
respect of which an adjustment is provided for in this clause (iv) are only
exercisable upon the occurrence of certain triggering events, then the
conversion price will not be adjusted until such triggering events occur; (v)
distributions consisting exclusively of cash (specifically including
distributions paid in cash up to the greater of (x) retained earnings of the
Company on the date such distribution or dividend was declared or (y) Net Income
of the Company during the four full fiscal quarters preceding the date such
distribution or dividend was declared, but excluding any cash distributions for
which an adjustment has been made pursuant to a preceding clause of this
paragraph) to all holders of Common Stock in an aggregate amount that, together
with (A) other all-cash distributions made within the preceding 12 months not
triggering a conversion price adjustment and (B) all Excess Tender Payments (as
defined below) in respect of each tender or exchange offer by the Company or any
Subsidiary for Common Stock concluded within the preceding 12 months not
triggering a conversion price adjustment, exceeds an amount equal to 20% of the
Company's deemed market capitalization on the date fixed for the determination
of stockholders entitled to receive such distribution (calculated as set forth
in the Indenture); (vi) issuances of Common Stock to an Affiliate for a net
consideration per share less than the current market price per share (other than
issuances of Common Stock under certain management benefit plans); and (vii)
payment of an Excess Tender Payment in respect of a tender or exchange offer by
the Company or any Subsidiary for Common Stock, if the aggregate amount of such
Excess Tender Payment, together with (A) the aggregate amount of any all-cash
distributions made within the preceding 12 months not triggering a conversion
price adjustment and (B) all Excess Tender Payments in respect of each tender or
exchange offer by the Company or any Subsidiary for Common Stock concluded
within the preceding 12 months not triggering a conversion price adjustment,
exceeds an amount equal to 20% of the Company's deemed market capitalization on
the expiration of such tender offer (calculated as set forth in the Indenture)
(Section 1204). For purposes of these conversion price adjustments, the term (i)
"Excess Tender Payment" means the excess of (A) the aggregate of the cash and
value of other consideration paid by the Company with respect to the shares
acquired in the tender or exchange transaction over (B) the market value of such
acquired shares after the completion of the tender or exchange offer (calculated
as set forth in the Indenture) and (ii) "Net Income" of any Person means the net
income of such Person net of non-cash charges taken as a result of accounting
changes required to be made by the Financial Accounting Standards Board after
the date of the Indenture.
No adjustments in the conversion price are required for any dividend or
distribution referred to above if the holders may participate in the dividend or
distribution (on a basis determined in good faith to be fair by the Board of
Directors) and receive the same consideration they would have received if they
had converted the SIRENs (Section 1213).
No adjustment of the conversion price will be required to be made until
cumulative adjustments amount to 1% or more of the conversion price as last
adjusted. In addition to the foregoing adjustments, the Company will be
permitted to make such reductions in the conversion price as it considers to be
advisable in order that any event treated for federal income tax purposes as a
dividend of stock or stock rights will not be taxable to the holders of the
Common Stock (Section 1204).
Subject to any applicable right of the holders to receive the Change of
Control Purchase Price (as described below), in the case of certain
consolidations or mergers to which the Company is a party or the transfer or
lease of the Company's properties or assets substantially as an entirety, each
holder has the right to convert each SIREN only into the kind and amount of
securities, cash and other property receivable upon the
31
<PAGE> 33
consolidation, merger, transfer or lease by a holder of the number of shares of
Common Stock into which such SIREN might have been converted immediately prior
to such consolidation, merger, transfer or lease (assuming such holder of Common
Stock is not a Constituent Person and such holder failed to exercise any rights
of election and received per share the kind and amount of consideration received
per share by a plurality of non-electing shares) (Section 1211).
Fractional shares of Common Stock will not be issued upon conversion, but,
in lieu thereof, the Company will pay a cash adjustment based upon the market
price of a share of Common Stock (Section 1203). Except as provided below, no
adjustment will be made upon a conversion of SIRENs for interest accrued
thereon. The Company's delivery to the holder of the fixed number of shares of
Common Stock into which the SIREN is convertible will be deemed to satisfy the
Company's obligation to pay the principal amount of the SIREN and all accrued
interest and original issue discount that has not previously been paid. The
Common Stock is treated as issued first in payment of accrued interest and
original issue discount and then in payment of principal. Thus accrued interest
and original issue discount, if any, will be treated as paid rather than
canceled, extinguished or forfeited. If a SIREN is surrendered for conversion
during the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the close of business on any Interest
Payment Date, then notwithstanding such conversion, interest payable in respect
of the SIREN so surrendered will be paid in cash to the person in whose name
such SIREN is registered at the close of business on such Regular Record Date,
and (except in the case of SIRENs with a Maturity Date prior to such Interest
Payment Date) when so surrendered for conversion, such SIREN must be accompanied
by payment of a amount equal to the interest thereon which the registered holder
as of the close of business on such Regular Record Date is to receive (Sections
307 and 1202).
SUBORDINATION OF SIRENS
The payment of the principal of and premium, if any, and interest on the
SIRENs is, to the extent set forth in the Indenture, subordinated in right of
payment to the prior payment in full of all Senior Indebtedness, whether now
outstanding or incurred in the future (Section 1301). Upon any payment or
distribution of assets of the Company to creditors upon any liquidation,
dissolution, winding up, assignment for the benefit of creditors or marshalling
of assets and liabilities or any bankruptcy, insolvency, receivership,
liquidation, reorganization or similar proceedings of the Company, the holders
of all Senior Indebtedness will first be entitled to receive payment in full of
all amounts due or to become due thereon before the holders of the SIRENs will
be entitled to receive any payment (other than any payment in the form of
Permitted Junior Securities) on account of the principal of or premium, if any,
or interest on the SIRENs, including payment of the Redemption Price and the
Change of Control Purchase Price of the SIRENs, and before the SIRENs may be
converted into Common Stock (Section 1302).
No payment (other than any payment in the form of Permitted Junior
Securities) on account of principal of and premium, if any, or interest on the
SIRENs, including payment of the Redemption Price and the Change of Control
Purchase Price on the SIRENs, may be made, and the SIRENs may not be converted
into Common Stock, if a Payment Event of Default shall have occurred and be
continuing. In addition, no payment (other than any payment in the form of
Permitted Junior Securities) on account of principal of or premium, if any, or
interest on the SIRENs, including payment of the Redemption Price and the Change
of Control Purchase Price on the SIRENs, may be made, and the SIRENs may not be
converted into Common Stock, if a Non-payment Event of Default shall have
occurred and be continuing, for the period (a "Payment Blockage Period")
commencing on receipt of notice of such event of default by the Trustee from a
holder of any Designated Senior Indebtedness (or any trustee or other
representative therefor) and ending on the earlier of (i) the date such
Non-payment Event of Default has been cured or waived or has ceased to exist or
any acceleration of such Designated Senior Indebtedness has been rescinded or
annulled or such Designated Senior Indebtedness shall have been discharged and
(ii) the date 176 days after such receipt of notice. Any number of such notices
may be given; provided, however, that, during any 360-day period, the aggregate
Payment Blockage Periods shall not exceed 176 days and there shall be a period
of at least 184 consecutive days when no Payment Blockage Period is in effect.
No default existing or continuing when a Payment Blockage Period begins may be
the basis for any subsequent Payment Blockage Period unless such default has
32
<PAGE> 34
been cured for a period of at least 90 consecutive days. In the event that,
notwithstanding the restrictions described in the preceding sentences, the
Company makes any payment to the Trustee or a holder of SIRENs prohibited by any
such restriction, with such Trustee or holder, as the case may be, knowing of
such contravention before receipt thereof, then such payment will be required to
be paid over and delivered forthwith to the Company to the extent necessary to
pay in full all such Senior Indebtedness (Section 1303).
The subordination rights of holders of Senior Indebtedness will not be
prejudiced or impaired by any acts or failures to act by the Company or by any
such holder (Section 1308). The subordination of the SIRENs set forth above will
not prevent the occurrence of any Event of Default under the Indenture.
Furthermore, the subordination of the SIRENs as set forth above will not impair,
as between the Company, the holders of the SIRENs and creditors of the Company
other than holders of Senior Indebtedness, the obligations of the Company to
make payments on the SIRENs in accordance with their terms. In certain
circumstances, as set forth in the Indenture, the holders of SIRENs will be
subrogated to certain rights of the holders of Senior Indebtedness upon payment
in full of all Senior Indebtedness (Section 1302).
By reason of such subordination, in the event of insolvency of the Company,
the holders of Senior Indebtedness (as well as other creditors of the Company
who are holders of indebtedness that is not subordinated to the Senior
Indebtedness) may recover more, ratably, than the holders of the SIRENs.
The SIRENs will also be effectively subordinated to all liabilities,
including trade payables and capitalized lease obligations, if any, of the
Company's subsidiaries. Any right of the Company to receive the assets of any of
its subsidiaries upon their liquidation or reorganization (and the consequent
right of the holders of the SIRENs to participate in those assets) will be
subject to the prior payment of claims of that subsidiary's creditors (including
trade creditors), except to the extent that the Company is itself a creditor of
such subsidiary, in which case the claims of the Company would still be subject
to the prior payment of claims secured by security interests in the assets of
such subsidiary and any other indebtedness of such subsidiary senior to that
held by the Company.
Immediately following the sale of the SIRENs offered hereby and application
of the proceeds therefrom, the sum of the Company's Senior Indebtedness and the
indebtedness of the Company's subsidiaries will total approximately $34 million.
There are no restrictions in the Indenture on the creation of Senior
Indebtedness (or any other indebtedness). The agreements under which Senior
Indebtedness may be outstanding in the future could contain provisions which may
require repayment of such respective Senior Indebtedness prior to repayment of
the SIRENs upon, among other things, a Change of Control. If the Company is
unable to obtain the requisite consents under its Senior Indebtedness to enable
it to repurchase the SIRENs or is unable to repay all Senior Indebtedness, there
would be both an Event of Default under the SIRENs and an event of default under
such Senior Indebtedness, as a result of which events the Company would be
prohibited by the subordination terms of the Indenture from repurchasing SIRENs
or making other payments in respect thereof. Furthermore, the exercise by the
holders of their right to require the Company to repurchase the SIRENs could
cause a default under the Designated Senior Indebtedness of the Company, even if
the Change of Control itself does not, due to the financial effect of such
repurchase on the Company. As a result, the repurchase of the SIRENs could be
blocked pursuant to the subordination terms of the Indenture. Finally, the
Company's ability to pay cash to the holders of SIRENs upon a repurchase may be
limited by the Company's then existing financial resources. Failure of the
Company to pay the Change of Control Purchase Price will create an Event of
Default with respect to the SIRENs, whether or not such repurchase is permitted
by the subordination terms of the Indenture. See " -- Repurchase of SIRENs at
the Option of the Holder Upon a Change of Control."
"Bank Credit Facility" means the Company's existing bank credit facility
and any renewals, amendments, extensions, supplements, modifications,
refinancings or replacements thereof (Section 101).
"Designated Senior Indebtedness" means (i) all Senior Indebtedness under
the Bank Credit Facility if the sum of the amounts outstanding under the Bank
Credit Facility and the amounts available for borrowing thereunder is equal to
or greater than $25,000,000 and (ii) all other Senior Indebtedness having an
outstanding principal amount equal to or greater than $25,000,000 (provided,
however, that the agreements, indentures or other instruments evidencing any
Senior Indebtedness referred to in this clause (ii) specifically
33
<PAGE> 35
state that such Senior Indebtedness shall be classified as "Designated Senior
Indebtedness" for purposes of the Indenture) (Section 101).
"Indebtedness" of any Person means, without duplication, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or similar instruments, including
obligations incurred in connection with the acquisition of property, assets or
businesses; (iii) every obligation of such Person under conditional sale or
other title retention agreements relating to assets or property purchased by
such Person or issued or assumed as the deferred purchase price of property,
assets or services (but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business that are not overdue by more than 90
days or are being contested by such Person in good faith); (iv) every Capital
Lease Obligation of such Person; (v) every obligation of such Person with
respect to any Sale and Leaseback Transaction to which such Person is a party;
(vi) every obligation of such Person with respect to letters of credit, bankers
acceptances or similar facilities issued for the account of such Person; (vii)
the maximum fixed redemption or repurchase price of outstanding Redeemable Stock
of such Person; (viii) every obligation of such Person with respect to
performance, surety or similar bonds; (ix) every obligation of such Person under
interest rate, commodity or foreign currency swap, cap, hedge, exchange or
similar agreements; (x) every obligation of the type referred to in clauses (i)
through (ix) and clause (xi) of another Person the payment of which such Person
has Guaranteed or is otherwise responsible for or liable for, directly or
indirectly, as obligor, Guarantor or otherwise; and (xi) every amendment,
modification, renewal and extension of an obligation of the type referred to in
clauses (i) through (x) (Section 101).
"Non-payment Event of Default" means any event (other than a Payment Event
of Default) the occurrence of which entitles any one or more persons to
accelerate the maturity of any Designated Senior Indebtedness (Section 101).
"Payment Event of Default" means any default in the payment of principal of
or premium, if any, or interest on any Designated Senior Indebtedness when due
(whether at maturity, upon acceleration or otherwise) (Section 101).
"Permitted Junior Securities" means subordinated debt securities of the
Company or any successor obligor with respect to the Senior Indebtedness
provided for by a plan of reorganization or readjustment that are subordinated
in right of payment to all Senior Indebtedness that may be outstanding to
substantially the same extent as, or to a greater extent than, the SIRENs are
subordinated as provided in the Indenture (Section 101).
"Senior Indebtedness" means all obligations of the Company for Indebtedness
(other than Indebtedness described in clause (vii) of the definition of
Indebtedness), whether now existing or hereafter incurred or assumed; provided
that, Senior Indebtedness shall not include (A) any obligation owed to a
Subsidiary or an Affiliate or Related Person of the Company, (B) any obligation
that by its terms is not superior in right of payment to the SIRENs, (C) any
obligation in respect of the Company's 8% Convertible Subordinated Debentures
and 6% Convertible Subordinated Debentures, if and when issued, for which the
Company's existing preferred stock is exchangeable (the SIRENs not being senior
in right of payment to such debentures) or (D) any obligation constituting a
trade account payable (Section 101).
34
<PAGE> 36
REDEMPTION
The SIRENs will be redeemable, at the Company's option, as a whole or from
time to time in part, at any time on or after March 31, 1997, upon not less than
20 nor more than 60 days notice mailed to the registered holders thereof, at the
redemption prices (expressed as a percentage of the principal amount thereof)
set forth below if redeemed during the 12-month period beginning March 31 of the
years indicated:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
----- ----------
<S> <C>
1997.............................................. %
1998.............................................. %
1999.............................................. %
2000.............................................. %
2001.............................................. %
</TABLE>
together, in each case, with accrued interest to the Redemption Date (subject to
the right of holders of record on the relevant record date to receive interest
due on an Interest Payment Date that is on or prior to the Redemption Date)
(Sections 203, 1101, and 1107).
If less than all the SIRENs are to be redeemed, the SIRENs to be redeemed
shall be selected by the Trustee in such manner as the Trustee shall deem
appropriate and fair (Section 1104).
The Company's existing bank credit facility prohibits the Company from
redeeming any SIRENs unless (i) such redemption is permitted under the
restricted payment covenant contained in such bank credit facility and (ii) at
the time of such redemption and after giving effect thereto, no default shall
have occurred under such bank credit facility.
REPURCHASE OF SIRENS AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL
In the event of any Change of Control (as defined below) with respect to
the Company which constitutes a Repurchase Event (as defined below), each holder
of SIRENs will have the right, at such holder's option, subject to the terms and
conditions of the Indenture, to require the Company to repurchase all or any
part (provided that the principal amount must be $1,000 or an integral multiple
thereof) of the holder's SIRENs on the date (the "Change of Control Purchase
Date") that is 60 days after the date the Company's Change of Control Notice (as
defined below) is mailed (or such later date as is required by law), at a cash
price equal to 100% of the principal amount plus accrued interest to the Change
of Control Purchase Date (the "Change of Control Purchase Price"). The Change of
Control Purchase Price may be less than the fair market value of the SIRENs on
the Change of Control Purchase Date. Promptly, but in any event within 29 days
following any Change of Control, the Company is required, with respect to any
Senior Indebtedness that would prohibit the repurchase of SIRENs by the Company
in the event of such Change of Control, either to repay all such Senior
Indebtedness in full or obtain the requisite consents under such Senior
Indebtedness to permit the repurchase of the SIRENs as provided below. The
Company first is required to comply with the covenants in the preceding sentence
before it is required to repurchase SIRENs pursuant to a Change of Control. The
foregoing will in no way limit the occurrence of an Event of Default, including
an Event of Default arising from a default under the covenants of the second
sentence of this paragraph (Section 1401 and 1402).
Within 29 days after a Change of Control which constitutes a Repurchase
Event, the Company is obligated to mail to the Trustee and to all holders of
SIRENs at their addresses shown in the register of the Security Registrar (and
to beneficial owners as required by applicable law) a notice (the "Change of
Control Notice") regarding the Change of Control. The Change of Control Notice
will describe: (i) the events causing the Change of Control; (ii) the Change of
Control Purchase Price; (iii) the Change of Control Purchase Date; (iv)
information regarding the conversion rights of the SIRENs; and (v) the
procedures for withdrawing a Change of Control Purchase Notice. The Change of
Control Notice will also state whether or not the Company has satisfied its
obligations regarding Senior Indebtedness referred to in the preceding paragraph
(Section 1401).
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<PAGE> 37
To exercise the right to have SIRENs repurchased following a Change of
Control, a holder must deliver a Change of Control Purchase Notice to the Paying
Agent at its office maintained for such purpose, prior to the close of business
on the Change of Control Purchase Date. The Change of Control Purchase Notice
shall state: (i) the certificate numbers of the SIRENs to be delivered by the
holder thereof for purchase by the Company; (ii) the portion of the principal
amount of SIRENs to be repurchased, which portion must be $1,000 or an integral
multiple thereof; and (iii) that such SIRENs are to be repurchased by the
Company pursuant to the applicable provision of the Indenture (Section 1401). A
holder of record of SIRENs shall be entitled to deliver a Change of Control
Purchase Notice with respect to any or all SIRENs held by it; provided, however,
that such holder may be required to provide evidence satisfactory to the Company
that, with respect to each beneficial holder of the SIRENs to be delivered to
the Company, such beneficial holder is exercising the right to require the
repurchase of all of the SIRENs in which it has a beneficial interest.
Any Change of Control Purchase Notice may be withdrawn by the holder by a
written notice of withdrawal delivered to the Paying Agent prior to the close of
business on the Change of Control Purchase Date. The notice of withdrawal shall
state the principal amount and the certificate numbers of the SIRENs as to which
the withdrawal notice relates and the principal amount, if any, which remains
subject to a Change of Control Purchase Notice (Sections 1401 and 1402).
Payment of the Change of Control Purchase Price for SIRENs for which a
Change of Control Purchase Notice has been delivered and not withdrawn is
conditioned upon delivery of such SIRENs (together with necessary endorsements)
to the Paying Agent at its office maintained for such purpose, at any time
(whether prior to, on, or after the Change of Control Purchase Date) after the
delivery of such Change of Control Purchase Notice. Payment of the Change of
Control Purchase Price for such SIRENs will be made promptly following the later
of the Change of Control Purchase Date and the time of delivery of such SIRENs
(Sections 1401 and 1402).
"Change of Control" shall occur when: (i) all or substantially all of the
Company's assets are sold as an entirety to any person or related group of
persons; (ii) there shall be consummated any consolidation or merger of the
Company (A) in which the Company is not the continuing or surviving corporation
(other than a consolidation or merger with a wholly-owned subsidiary of the
Company in which all shares of Common Stock outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for the same consideration)
or (B) pursuant to which the Common Stock would be converted into cash,
securities or other property, in each case, other than a consolidation or merger
of the Company in which the holders of the Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority of the
Common Stock of the continuing or surviving corporation immediately after such
consolidation or merger; or (iii) any person or any persons acting together
which would constitute a "group" for purposes of Section 13(d) of the Exchange
Act (other than the Company, any Subsidiary, any employee stock purchase plan,
stock option plan or other stock incentive plan or program, retirement plan or
automatic dividend reinvestment plan or any substantially similar plan of the
Company or any Subsidiary or any person holding securities of the Company for or
pursuant to the terms of any such employee benefit plan), together with any
affiliates thereof, shall Beneficially Own, directly or indirectly, at least 50%
of the total Voting Stock of the Company (Section 1401). As noted above, one of
the events that constitutes a Change of Control is a sale of all or
substantially all of the assets of the Company as an entirety to any person or
related group of persons. The Indenture will be governed by New York law, and
there is no established quantitative definition under New York law of
"substantially all" of the assets of a corporation. This uncertainty may make it
more difficult for a holder of SIRENs to determine whether a Change of Control
has occurred in the event that the Company were to engage in a transaction in
which it sold less than all of its assets.
A Change of Control as described above shall constitute a Repurchase Event
unless (i) the closing price per share of the Common Stock on the five
consecutive Trading Days selected by the Company out of the 10 consecutive
Trading Days ending immediately after the later of the Change of Control or the
public announcement of the Change of Control (in the case of a Change of Control
under clauses (i) or (ii) of the definition of Change of Control) or ending
immediately before the Change of Control (in the case of a Change of Control
under clause (iii) of the definition of Change of Control) is at least equal to
105% of the conversion price of the SIRENs in effect immediately preceding the
time of such Change of Control, or
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<PAGE> 38
(ii) all of the consideration (excluding cash payments for fractional shares) in
the transaction giving rise to such Change of Control to the holders of Common
Stock consists of shares of common stock that are, or immediately upon issuance
will be, listed on a national securities exchange or quoted in the Nasdaq
National Market, and as a result of such transaction the SIRENs become
convertible solely into such Common Stock and neither Moody's Investors Service,
Inc. nor Standard & Poor's principally as a result of the Change of Control, has
downgraded the rating on the SIRENs by one or more gradations below the rating
of the SIRENs on the original issuance date thereof within 90 days after the
date of the public announcement of the Change of Control (which period shall be
extended so long as the rating of the SIRENs is under publicly announced
consideration for possible downgrade by any of the rating agencies), or (iii)
the consideration in the transaction giving rise to such Change of Control to
the holders of Common Stock consists of cash, securities that are, or
immediately upon issuance will be, listed on a national securities exchange or
quoted in the Nasdaq National Market, or a combination of cash and such
securities, and the aggregate fair market value of such consideration (which, in
the case of such securities, shall be equal to the average of the daily closing
prices of such securities on the five consecutive Trading Days selected by the
Company out of the 10 consecutive Trading Days following consummation of such
transaction) is at least 105% of the conversion price of the SIRENs in effect on
the date immediately preceding the closing date of such transaction (Section
1401).
The Company, to the extent applicable and if required by law, will comply
with the provisions of Rule 13e-4 and any successor or similar provision under
the Exchange Act which may then be applicable and will file a Schedule 13E-4 or
any successor or similar schedule required thereunder in connection with any
offer by the Company to purchase SIRENs at the option of holders upon a Change
of Control (Section 1405). The Change of Control purchase feature of the SIRENs
may in certain circumstances make more difficult or discourage a takeover of the
Company and, thus, the removal of incumbent management. The Change of Control
purchase feature, however, is not the result of management's knowledge of any
specific effort to accumulate shares of Common Stock or to obtain control of the
Company by means of a merger, tender offer, solicitation or otherwise, or part
of any plan by management to adopt a series of anti-takeover provisions.
Instead, the Change of Control purchase feature is a result of negotiations
between the Company and the Underwriters. Management has no present intention to
engage in a transaction involving a Change of Control, although it is possible
that the Company would decide to do so in future. Subject to the limitation on
mergers discussed below, the Company could, in the future, enter into certain
transactions, including certain recapitalizations, sales of assets, or the
liquidation of the Company, that would not constitute a Change of Control under
the Indenture, but that would increase the amount of Senior Indebtedness (or any
other indebtedness) outstanding at such time or substantially reduce or
eliminate the Company's assets. There are no restrictions in the Indenture on
the creation of additional Senior Indebtedness (or any other indebtedness), and,
under certain circumstances, the incurrence of significant amounts of additional
indebtedness could have an adverse effect on the Company's ability to service
its indebtedness, including the SIRENs. If a Change of Control were to occur,
there can be no assurance that the Company would have sufficient funds to pay
the Change of Control Purchase Price for all SIRENs tendered by the holders
thereof.
No SIREN may be purchased pursuant to the Change of Control provisions if
there has occurred and is continuing an Event of Default described under
" -- Events of Default" (Section 1402).
The Company's existing bank credit facility prohibits the Company from
repurchasing any SIRENs unless (i) such repurchase is permitted under the
restricted payment covenant contained in such bank credit facility and (ii) at
the time of such repurchase and after giving effect thereto, no default shall
have occurred under such bank credit facility. In addition, the agreements under
which Senior Indebtedness may be outstanding in the future could contain
provisions which may require repayment of such respective Senior Indebtedness
prior to repayment of the SIRENs upon, among other things, a Change of Control.
If the Company is unable to obtain the requisite consents under its Senior
Indebtedness to enable it to repurchase the SIRENs or is unable to repay all
Senior Indebtedness, there would be both an Event of Default under the SIRENs
and an event of default under such Senior Indebtedness, as a result of which
events the Company could be prohibited by the subordination provisions of the
Indenture from repurchasing SIRENs or making other payments in respect thereof.
Furthermore, the exercise by the holders of their right to require the
37
<PAGE> 39
Company to repurchase the SIRENs could cause a default under the Senior
Indebtedness of the Company, even if the Change of Control itself does not, due
to the financial effect of such repurchase on the Company. As a result, the
repurchase of the SIRENs could be blocked pursuant to the subordination terms of
the Indenture. Finally, the Company's ability to pay cash to the holders of
SIRENs upon a repurchase may be limited by the Company's then existing financial
resources. Failure of the Company to pay the Change of Control Purchase Price
will be a default under the Indenture and could result in an Event of Default
with respect to the SIRENs, whether or not such repurchase is permitted by the
subordination provisions. See "-- Events of Default."
LIMITATION ON MERGERS
The Company may, without the consent of the holders of the SIRENs,
consolidate with or merge into any other entity or convey, transfer or lease its
properties and assets substantially as an entirety to any person, provided that:
(1) the entity formed by such consolidation or into which the Company is merged
or the person that acquires by conveyance or transfer, or which leases the
properties and assets of the Company substantially as an entirety, must be a
corporation, partnership or trust organized and existing under the laws of the
United States, any state thereof or the District of Columbia; (2) the successor
entity expressly assumes, by a supplemental indenture executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of and premium, if any and interest on all SIRENs and the
performance of every covenant of the Indenture on the part of the Company to be
performed or observed and provides for conversion rights in accordance with the
Indenture; and (3) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing (Section 801).
Upon compliance with these provisions by a successor entity, the Company (except
in the case of a lease) would be relieved of its obligations under the Indenture
and the SIRENs (Section 802).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture, with certain exceptions, may
be made by the Company and the Trustee, only with the consent of the holders of
not less than a majority in aggregate principal amount of the SIRENs at the time
outstanding, and holders of not less than a majority in aggregate principal
amount of the SIRENs at the time outstanding may waive compliance by the Company
with certain provisions of the Indenture; provided, however, that no such
modification, amendment or waiver may, without the consent of the holder of each
outstanding SIREN affected thereby, (i) change the Stated Maturity of the
principal of or the due date of any installment of interest on any SIREN, (ii)
reduce the principal amount of, or the rate of interest on, or any premium
payable upon redemption of, any SIREN, (iii) change the currency of payment of
principal of, or premium, if any, or interest on, any SIREN, (iv) impair the
right to institute suit for the enforcement of any payment on or with respect to
any SIREN on or after the Stated Maturity, or the Redemption Date in case of the
redemption of any SIREN, (v) adversely affect the right of a holder to convert
SIRENs, (vi) modify the provisions of the Indenture with respect to the
subordination of the SIRENs in a manner adverse to the holders, (vii) reduce the
above-stated percentage of outstanding SIRENs necessary to modify or amend the
Indenture, or (viii) reduce the percentage in aggregate principal amount of
outstanding SIRENs necessary for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults (Sections 902 and 1009).
The holders of a majority in aggregate principal amount of the outstanding
SIRENs may waive any past default under the Indenture except, among other
things, a default in the payment of principal of or premium, if any, or interest
on any SIREN, including the Redemption Price, or a default with respect to right
of holders to convert the SIRENs (Section 513).
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture: (i) failure to
pay principal of, premium, if any, or Redemption Price when due on any SIREN,
whether or not such payment is prohibited by the subordination provisions of the
indenture; (ii) failure to pay any interest on any SIREN 30 days after payment
38
<PAGE> 40
is due, whether or not such payment is prohibited by the subordination
provisions of the Indenture; (iii) failure to perform any other covenant of the
Company in the Indenture, and such failure continues for 60 days after written
notice by the Trustee or the holders of at least 25% in principal amount of the
outstanding SIRENs as provided in the Indenture; (iv) default under any
mortgage, indenture or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness of the Company in excess of
an aggregate of $10,000,000 either for borrowed money or representing any Senior
Indebtedness (other than indebtedness which is nonrecourse to the Company beyond
the property securing such indebtedness) resulting in the acceleration of such
indebtedness prior to its express maturity (provided however, that the Event of
Default under this clause (iv) shall be automatically deemed remedied and cured
if the default under such accelerated indebtedness is remedied or cured by the
Company or waived by the holder of such indebtedness); and (v) certain events of
bankruptcy, insolvency or reorganization of the Company (Section 501).
Notwithstanding the 60-day period and notice requirement referred to in
clause (iii) above, with respect to a default under the Change of Control
provisions, (1) the 60-day period referred to in clause (iii) above will be
deemed to have begun as of the date the Change of Control Notice is required to
be sent in the event the Change of Control Notice indicates (or would, if sent,
indicate) that the Company has not complied with its obligation to either repay
or obtain the requisite consents under any Senior Indebtedness that would
prohibit the repurchase of the SIRENs, and either (a) the holders duly elect to
have at least 25% in principal amount of outstanding SIRENs repurchased, or (b)
the holders of at least 25% in principal amount of the outstanding SIRENs or the
Trustee thereafter gives the Notice of Default to the Company and, if
applicable, the Trustee, and (2) if the breach or default is a result of a
default in the payment when due of the Change of Control Purchase Price on the
Change of Control Purchase Date, such default shall arise on the Change of
Control Purchase Date, provided that either the holders of at least 25% in
principal amount of the SIRENs or the Trustee thereafter gives the Notice of
Default to the Company and, if applicable, the Trustee (Section 501).
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, 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 (Sections 601 and 603).
Subject to such provisions for the indemnification of the Trustee, the holders
of a majority in aggregate principal amount of the outstanding SIRENs 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 (Section 512).
If an Event of Default shall occur and be continuing, other than an event
of bankruptcy, insolvency or reorganization of the Company, either the Trustee
or the holders of at least 25% of the principal amount of the outstanding SIRENs
may accelerate the maturity of all SIRENs upon the earlier of (1) five business
days after notice of such acceleration is received by the Company (and the
Trustee if given by holders) and (2) a payment default under or acceleration of
any Senior Indebtedness or such other earlier time as the final maturity date
for such Senior Indebtedness occurs. If an Event of Default shall occur and be
continuing which is an event of bankruptcy, insolvency or reorganization of the
Company, the maturity of all SIRENs shall immediately accelerate without any act
on the part of the Trustee or any holder. If an Event of Default shall occur and
be continuing as a result of an acceleration of indebtedness of the type
described in clause (iv) above, a declaration of acceleration under the
Indenture shall automatically be annulled if the holders of the accelerated
indebtedness described in clause (iv) above have rescinded their declaration of
acceleration within 90 days thereof and no other Event of Default has occurred
during such 90-day period which has not been cured or waived. After acceleration
upon the Event of Default, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of
outstanding SIRENs may, under certain circumstances, rescind and annul such
acceleration if, among other things, all Events of Default, other than the
non-payment of accelerated principal, have been cured or waived as provided in
the Indenture (Section 502). For information as to waiver of defaults, see
" -- Modification and Waiver."
No holder of any SIREN will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default, the holders of at least 25% in aggregate principal amount of the
outstanding SIRENs shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such
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<PAGE> 41
proceeding as trustee, the Trustee shall not have received from the holders of a
majority in aggregate principal amount of the outstanding SIRENs a direction
inconsistent with such request and the Trustee shall have failed to institute
such proceeding within 60 days after such notice (Section 507). However, such
limitations do not apply to a suit instituted by a holder of a SIREN for the
enforcement of payment of the principal of or premium, if any, or interest on
such SIREN or the Redemption Price on or after the respective due dates
expressed in such SIREN or of the right to convert such SIREN in accordance with
the Indenture (Section 508).
The Company will be required annually to furnish to the Trustee a statement
as to any default in its performance of certain of its obligations under the
Indenture (Section 1004).
DISCHARGE OF INDENTURE; DEFEASANCE
The Company may terminate substantially all obligations under the Indenture
at any time by delivering all outstanding SIRENs to the Trustee for cancellation
and paying any other sums payable under the Indenture (Article IV).
The Indenture also provides that the Company may elect:
(a) to defease and be discharged from any and all obligations with
respect to the SIRENs and that the provisions of the Indenture (including
the provisions described under " -- Subordination of SIRENs") will no
longer be in effect with respect to the SIRENs (except for the obligations
to register the transfer or exchange of the SIRENs, to replace temporary or
mutilated, destroyed, lost or stolen SIRENs, to maintain an office or
agency in respect of SIRENs and to hold monies for payment in trust)
("Defeasance"); or
(b) to be released from its obligations with respect to the SIRENs
under certain restrictive covenants of the Indenture, and that the event of
the type described under the clause (iv) under " -- Events of Default" will
not be deemed to be an Event of Default under the indenture and that the
provisions described under " -- Subordination of SIRENs" will not apply
("Covenant Defeasance").
Such Defeasance or Covenant Defeasance will take effect only upon the
deposit with the Trustee (or other qualifying trustee), in trust for such
purpose, of money or U.S. Government Obligations that, through the payment of
principal and interest in accordance with their terms, will provide money, in an
amount sufficient to pay the principal of and premium, if any, and interest on
the SIRENs on the dates such payments are due, which may include one or more
Redemption Dates designated by the Company (other than in connection with a
Change of Control occurring after such Defeasance or Covenant Defeasance), in
accordance with the terms of the SIRENs (Article XV).
Such a trust may be established with respect to the SIRENs only if, among
other things: (i) such Defeasance or Covenant Defeasance will not result
(whether immediately or with notice or lapse of time or both) in an Event of
Default under the Indenture; (ii) such deposit will not be prohibited by the
provisions of any agreement or instrument to which the Company is a party or is
bound; (iii) such deposit will not cause the Trustee to have any conflicting
interest with respect to other securities of the Company; (iv) the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the holders of
the SIRENs will not recognize income, gain or loss for federal income tax
purpose as a result of such Defeasance or Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Defeasance or Covenant Defeasance
had not occurred; and (v) the Company has delivered an Officers' Certificate and
an Opinion of Counsel, each to the effect that all conditions precedent relating
to such Defeasance or Covenant Defeasance have been satisfied. Such Opinion of
Counsel, in the case of Defeasance, must refer to and be based upon a ruling of
the Internal Revenue Service or a change in applicable federal income tax law
occurring after the issue date (Article XV).
If the Company omits to comply with its remaining obligations under the
Indenture after Covenant Defeasance in respect of the SIRENs issued thereunder
and the SIRENs are declared due and payable because of the occurrence of an
Event of Default, the amount of money or U.S. Government Obligations on deposit
with the Trustee may be insufficient to pay amounts due on the SIRENs at the
time any acceleration
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<PAGE> 42
of the maturity thereof resulting from such Event of Default. However, the
Company will remain liable in respect of such payments (Article XV).
GOVERNING LAW
The Indenture and the SIRENs will be governed by and construed in
accordance with the laws of the State of New York.
THE TRUSTEE
Texas Commerce Bank National Association is the Trustee under the
Indenture. In the ordinary course of business the Company maintains other
commercial relationships with the Trustee and its affiliates. If the Trustee
shall acquire any conflicting interest (as defined in Section 301(b) of the
Trust Indenture Act of 1939, as amended) after a default under the Indenture,
the Trustee either shall eliminate such conflicting interest or resign as
Trustee.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The Company's authorized capital stock consists of 75,000,000 shares of
common stock, par value $.01 per share (the "Common Stock"), of which 23,259,658
were issued and outstanding at December 31, 1993, and 10,000,000 shares of
preferred stock, par value $.01 per share (the "Preferred Stock"), of which
2,221,005 were issued and outstanding as of December 31, 1993.
COMMON STOCK
All shares of Common Stock have equal rights to participate in dividends
and, in the event of liquidation, assets available for distribution to
stockholders, subject to any preference established with respect to Preferred
Stock. Each holder of Common Stock is entitled to one vote for each share held
on all matters submitted to a vote of stockholders, and voting rights for the
election of directors are noncumulative. Shares of Common Stock carry no
conversion, preemptive or subscription rights, and are not subject to
redemption. All outstanding shares of Common Stock are, and any shares of Common
Stock issued upon conversion of convertible securities will be, validly issued,
fully paid and nonassessable. The Company pays dividends on Common Stock when,
as and if declared by the Board of Directors. Dividends may be declared in the
discretion of the Board of Directors from funds legally available therefor,
subject to restrictions under agreements related to Company indebtedness.
The transfer agent for the Common Stock is Society National Bank, 3200
Renaissance Tower, 1201 Elm Street, Dallas, Texas 75270.
PREFERRED STOCK
The Preferred Stock is issuable in one or more series or classes, any or
all of which may have such voting powers, full or limited, or no voting powers,
and such designations, preferences and related, participating, optional or other
special rights and qualifications, limitations or restrictions thereof, as are
set forth in the Company's Certificate of Incorporation, as amended, or in the
resolution or resolutions providing for the issue of such stock adopted by the
Board, which is expressly authorized to set such terms for any such issue.
In November 1991, the Company issued 1,200,000 shares of $4.00 Exchangeable
Convertible Preferred Stock, of which 1,186,005 shares were outstanding on
December 31, 1993. Holders of such Preferred Stock are entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends at an annual rate of $4.00 per share, payable
quarterly in arrears. Upon liquidation, such holders are entitled to receive a
preference of $50.00 per share, plus accrued and unpaid dividends to the payment
date. Each share of such Preferred Stock is convertible into 5.51 shares of
Common Stock at any time prior to redemption (subject to adjustment), equivalent
to a conversion price of $9.07 for each share of
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<PAGE> 43
Common Stock. The Company has the right to exchange the shares of such Preferred
Stock for the Company's 8% Convertible Subordinated Debentures due 2006 on any
dividend payment date and, subject to certain restrictions, the right to redeem
such Preferred Stock beginning January 1, 1995.
In April 1993, the Company issued 1,035,000 shares (represented by
4,140,000 depositary shares) of $6.00 Exchangeable Convertible Preferred Stock,
all of which were outstanding on December 31, 1993. Holders of such Preferred
Stock are entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available therefor, cash dividends at an annual
rate of $6.00 per share ($1.50 per depositary share), payable quarterly in
arrears. Upon liquidation, such holders are entitled to receive a preference of
$100.00 per share ($25.00 per depositary share), plus accrued and unpaid
dividends to the payment date. Each share of such Preferred Stock is convertible
into 4.762 shares of Common Stock at any time prior to redemption (subject to
adjustment), equivalent to a conversion price of $21.00 for each share of Common
Stock. The Company has the right to exchange the shares of such Preferred Stock
for the Company's 6% Convertible Subordinated Debentures due 2008 on any
dividend date payment on or after March 31, 1994 and the right to redeem such
Preferred Stock beginning March 31, 1996.
The existing series of Preferred Stock rank prior to the Common Stock, and
on a parity with each other, as to dividends and upon liquidation, dissolution
or winding up.
FACTORS AFFECTING ACQUISITIONS OF CONTROL
The Company's Certificate of Incorporation, as amended, provides that the
Board of Directors, in its discretion, may establish one or more class or series
of Preferred Stock having such number of shares, designations, relative voting
rights, dividend rates, liquidation and other rights, preferences and
limitations as may be fixed by the Board of Directors without any further
stockholder approval. Such rights, preferences, privileges and limitations could
have the effect of impeding or discouraging the acquisition of control of the
Company.
The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law (the "DGCL"). In general, Section 203 prevents
an "interested stockholder" (defined generally as a person owning 15% or more of
a corporation's outstanding voting stock) from engaging in a "business
combination" (as defined) with a Delaware corporation for three years following
the date such person became an interested stockholder unless (i) before such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination; (ii) upon
consummation of the transaction that resulted in the interested stockholder's
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the corporation and by employee stock plans that do not provide employees
with the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer); or (iii) following the
transaction in which such person became an interested stockholder, the business
combination is approved by the board of directors of the corporation and
authorized at a meeting of stockholders by the affirmative vote of the holders
of two-thirds of the outstanding voting stock of the corporation not owned by
the interested stockholder. Under Section 203, the restrictions described above
also do not apply to certain business combinations proposed by an interested
stockholder following the announcement or notification of one of certain
extraordinary transactions involving the corporation and a person who had not
been an interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of the corporation's
directors, if such extraordinary transaction is approved or not opposed by a
majority of the directors who were directors prior to any person's becoming an
interested stockholder during the previous three years or who were recommended
for election or elected to succeed such directors by a majority of such
directors.
DIRECTORS' LIABILITY
The Company's Certificate of Incorporation, as amended, also provides for
the elimination of directors' liability for monetary damages for a breach of
certain fiduciary duties and for the indemnification of directors,
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<PAGE> 44
officers, employees or agents as permitted by the DGCL. These provisions cannot
be amended without the affirmative vote of the holders of at least a majority in
interest of the outstanding shares entitled to vote.
The Company has entered into indemnification agreements with all directors
and executive officers and may, in the future, enter into such agreements with
employees and agents. Such indemnification agreements provide generally that
such persons will be indemnified, to the extent permitted by applicable law, for
expenses (including attorneys' fees), judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by such persons in
connection with any proceeding (including, to the extent permitted by law, any
derivative action) to which such persons are, or are threatened to be made, a
party by reason of their status in such positions. Such indemnification
agreements do not change the basic legal standards for indemnity under
applicable law or as set forth in the Certificate of Incorporation.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain federal income tax
considerations relevant to the purchase, ownership and disposition of SIRENs
that are acquired in this Offering. The summary is based on the Internal Revenue
Code of 1986, as amended through the date hereof (the "Code"), existing
regulations, and judicial and administrative determinations, all of which are
subject to change at any time, possibly on a retroactive basis. The summary
relates only to SIRENs, or Common Stock received upon conversion thereof, that
are held as "capital assets" within the meaning of Section 1221 of the Code by
persons who are citizens or residents of the United States or domestic
corporations or domestic partnerships. No information is provided herein with
respect to state, local or foreign tax consequences, nor does this summary
discuss tax consequences to categories of holders that are subject to special
rules such as foreign persons, tax-exempt organizations, insurance companies,
banks, and dealers in stocks and securities. Tax consequences may vary depending
on the particular status of an investor. No rulings will be sought from the
Internal Revenue Service ("IRS") with respect to the federal income tax
consequences of holding and disposing of the SIRENs.
THIS SUMMARY DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO AN INVESTOR'S DECISION TO PURCHASE SIRENS. EACH
INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR CONCERNING THE APPLICATION OF
THE FEDERAL INCOME TAX LAWS AND OTHER TAX LAWS TO ITS PARTICULAR SITUATION
BEFORE DETERMINING WHETHER TO PURCHASE SIRENS.
QUALIFIED STATED INTEREST ON THE SIRENS
Interest constituting "qualified stated interest" paid on a SIREN will be
taxable to a holder as ordinary interest income at the time it accrues or is
received, in accordance with the holder's usual method of accounting for federal
income tax purposes.
In general, "qualified stated interest" is stated interest that is
unconditionally payable in cash or in property (other than debt instruments of
the issuer), at least annually during the entire term of the debt instrument, at
a single fixed rate of interest (which rate reflects accrual periods of
different lengths, if any). Because interest on the SIRENs will be fixed for the
period from and including the date of issuance through March 31, 1997 at a rate
of % per annum, which will be lower than the rate of % per annum that
will be fixed thereafter, only interest computed at the initial stated interest
rate will be treated as qualified stated interest. The additional interest that
accrues on the SIRENs beginning April 1, 1997 in excess of interest computed at
the initial stated interest rate (the "Additional Interest") will not be treated
as qualified stated interest but, instead, will be included in the original
issue discount ("OID") on the SIRENs, reportable in the holder's income under
the rules described under " -- Original Issue Discount."
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<PAGE> 45
ORIGINAL ISSUE DISCOUNT
SIRENs will be issued with OID within the meaning of Section 1273(a) of the
Code.
The application of the OID rules will cause holders of SIRENs to recognize
the Additional Interest that is payable on the SIRENs after March 31, 1997 as
ordinary income (on a constant yield to maturity basis) over the term of the
SIRENs beginning on the date of issuance of the SIRENs. As a result, the amount
of taxable interest and OID income recognized by a holder of a SIREN from the
date of issuance through March 31, 1997 will exceed the actual cash interest
payments for such period. For the period from April 1, 1997 to maturity,
however, cash interest payments on the SIRENs will exceed the amount of OID and
interest income recognized by the holder.
The amount of OID on the SIRENs will equal the excess of their "redemption
price" over their "issue price." The "redemption price" will equal the stated
principal amount of the SIRENs, plus the Additional Interest payable after March
31, 1997. The "issue price" of the SIRENs will equal the initial offering price
to the public at which a substantial amount of the SIRENs are sold.
A holder of a SIREN must generally include in gross income for federal
income tax purposes the sum of the daily portions of OID for each day during the
taxable year or portion thereof during which the holder holds the SIREN, whether
or not the holder actually receives a payment relating to OID in such year. The
daily portion is determined by allocating to each day of the relevant "accrual
period" (as defined below) a pro rata portion of an amount equal to (a) the
product of (i) the "adjusted issue price" (as defined below) of the SIREN at the
beginning of each accrual period, and (ii) the constant yield to maturity of the
SIREN (taking into account the length of the particular accrual period), less
(b) the sum of any qualified stated interest payments allocable to the accrual
period. The "accrual period" for a SIREN will generally be the six month period
(or, in the case of the initial period, the shorter period) ending on March 31
and September 30 of each calendar year. The "adjusted issue price" of a SIREN at
the beginning of any accrual period is its issue price, plus all accrued OID for
prior accrual periods, less all prior cash payments other than qualified stated
interest payments.
The right to convert SIRENs into Common Stock is ignored for purposes of
computing the amount and accrual of OID. Moreover, since an early redemption of
the SIRENs would result in a higher yield to maturity than that determined by
reference to the stated maturity date of the SIRENs, the possibility of early
redemption is ignored for purposes of computing the amount and accrual of OID.
A holder's initial tax basis in a SIREN will generally equal the price paid
therefor, and will be increased by the amount of OID included in the holder's
income and reduced by the amount of all payments on the SIREN other than
qualified stated interest payments.
CONVERSION OF SIRENS
A holder of SIRENs generally will not recognize gain or loss upon the
conversion of the SIRENs into Common Stock, except as follows. A holder
receiving cash in lieu of a fractional share will recognize capital gain or loss
in an amount equal to the difference between the amount of cash received and the
amount of basis in the converted SIREN allocable to the fractional share. In
addition, a holder of SIRENs who converts the SIRENs into Common Stock between
interest payment dates may be obligated to recognize as ordinary income the
qualified stated interest accruing for the short period from the last interest
payment date to the conversion date and will be required to recognize the OID
accruing before the conversion date. A holder's aggregate tax basis in shares of
Common Stock received upon conversion will be equal to the holder's tax basis in
the SIRENs converted, less the portion of such basis that is allocated to any
cash received in lieu of a fractional share of Common Stock, plus the amount of
qualified stated interest recognized as ordinary income for the period ending on
the conversion date. The holding period for the shares of Common Stock received
upon conversion will include the holding period of the SIREN converted, except
the holding period of Common Stock, if any, allocable to accrued qualified
stated interest or accrued OID will commence on the day following the date of
conversion.
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<PAGE> 46
MARKET DISCOUNT
The market discount rules may affect resale of the SIRENs. If a person
purchases a SIREN at a market discount and thereafter recognizes gain upon
disposition of the SIREN (or the Common Stock into which it is converted), such
gain will be taxable as ordinary interest income to the extent of the market
discount that accrued during the period the purchaser held the SIREN. Generally,
market discount will exist on the purchase of a SIREN if the purchase price is
less than the adjusted issue price of the SIREN (i.e., the issue price of the
SIREN, as defined in "-- Original Issue Discount," plus the OID accrued thereon
prior to such purchase, less the amount of payments other than qualified stated
interest payments made on the SIREN). Thus, market discount will not exist on
SIRENs that are purchased in the Offering, except for those SIRENs (if any) that
are purchased for less than the issue price.
SALE, EXCHANGE OR REDEMPTION
Upon the sale, exchange or redemption (excluding conversion) of a SIREN or
upon a sale or exchange of Common Stock, a holder generally will recognize gain
or loss in an amount equal to the difference between the amount received
(exclusive of any amount received for qualified stated interest in the case of a
SIREN) and the holder's adjusted tax basis in the property sold. Such gain or
loss will be capital gain or loss, and will be long term capital gain or loss if
the property sold has been held for more than one year at the time of the sale,
exchange or redemption. In addition, in the case of a SIREN, the holder will
recognize ordinary interest income in an amount equal to the portion of the
amount realized on the sale, exchange or other disposition that is attributable
to qualified stated interest on the SIREN that accrued from the last interest
payment date.
CONSTRUCTIVE DIVIDEND
If at any time the Company makes a distribution of property to shareholders
which would be taxable to such shareholders as a dividend (e.g., a distribution
of cash or other assets or evidence of indebtedness of the Company but not a
stock dividend or right to subscribe for Common Stock), the conversion price for
the SIRENs may be adjusted pursuant to the anti-dilution provisions applicable
to the SIRENs. Such adjustment may be deemed to be a taxable dividend payment to
holders or beneficial owners of the SIRENs for federal income tax purposes. The
Company may make such reductions in the conversion price as it considers to be
advisable in order to prevent a taxable dividend resulting from the adjustment
in the conversion price.
BACKUP WITHHOLDING
Under the Code, a holder of a SIREN or Common Stock may be subject, under
certain circumstances, to "backup withholding" at a 31% rate with respect to
payments of interest and OID on the SIREN, payments of dividends on the Common
Stock, or gross proceeds from the disposition of either, unless the holder (i)
provides evidence that it is a corporation or that it is within certain other
exempt categories or (ii) provides a correct taxpayer identification number,
certifies as to no loss of exemption from backup withholding, and otherwise
complies with the applicable requirements of the backup withholding rules. Any
amount withheld from a payment to a holder under the backup withholding rules is
allowable as a credit against such holder's federal income tax liability.
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<PAGE> 47
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") among the Company, CS First Boston Corporation,
PaineWebber Incorporated, Petrie Parkman & Co., Inc. and Smith Barney Shearson
Inc., as underwriters (the "Underwriters"), the Company has agreed to sell to
each of the Underwriters, and each of the Underwriters has severally agreed to
purchase, the principal amount of SIRENs set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
CS First Boston Corporation............................................ $
PaineWebber Incorporated...............................................
Petrie Parkman & Co., Inc..............................................
Smith Barney Shearson Inc..............................................
------------
Total........................................................ $100,000,000
------------
------------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the SIRENs offered hereby if
any are purchased.
The Company has been advised by the Underwriters that they propose to offer
the SIRENs to the public initially at the public offering price set forth on the
cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of % of the principal amount per SIREN; that the
Underwriters and such dealers may allow a discount not in excess of % of
such principal amount on sales to certain other dealers; and that after the
initial public offering, the public offering price, concession and discount may
be changed.
The Company has granted to the Underwriters an option, exercisable within
30 days after the date of this Prospectus, to purchase up to an additional
$15,000,000 aggregate principal amount of the SIRENs at the public offering
price set forth on the cover page of this Prospectus less the underwriting
discount. The Underwriters may only exercise such option to cover
over-allotments, if any, in the sale of the initial $100,000,000 aggregate
principal amount of SIRENs offered hereby.
The Company and each of John C. Snyder, Thomas J. Edelman and John A.
Fanning, the Chairman, President and Executive Vice President, respectively, of
the Company, have agreed that, for a period of 90 days after the date of this
Prospectus, they will not, without the prior written consent of CS First Boston
Corporation, directly or indirectly, sell, agree to sell, contract to sell, or
otherwise dispose of any shares of the Company's Common Stock or Preferred Stock
or any other security convertible into or exchangeable for Common Stock other
than upon conversion of convertible securities outstanding on the date hereof or
pursuant to employee benefit plans (including, but not limited to, stock option
plans).
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments the Underwriters may be required to make in respect
thereof.
Each of the Underwriters has provided during the past 12 months and may
provide in the future investment banking services to the Company for which they
have received or may receive customary fees.
The SIRENs are a new issue of securities with no established trading
market, and the Company has no present intention to list the SIRENs on a
national securities exchange. The Underwriters have advised the Company that
each of them currently intends to make a market in the SIRENs, but they are not
obligated to do so and may discontinue any such market making at any time
without notice. No assurance can be given that an active market will develop for
the SIRENs or as to the liquidity thereof.
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<PAGE> 48
LEGAL OPINIONS
The validity of the SIRENs and the Common Stock issuable upon conversion of
the SIRENs will be passed upon by Peter E. Lorenzen, Vice President -- General
Counsel of the Company. Mr. Lorenzen owns 7,000 shares of Common Stock and holds
options to purchase 67,800 shares of Common Stock. Kelly, Hart & Hallman (a
professional corporation), Fort Worth, Texas, special tax counsel to the
Company, will pass on "Certain Federal Income Tax Considerations." Certain legal
matters in connection with this Offering will be passed upon for the
Underwriters by Baker & Botts, L.L.P., Dallas, Texas.
EXPERTS
The audited financial statements and schedules incorporated in this
Prospectus by reference have been audited by Arthur Andersen & Co., independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing.
The information appearing in this Prospectus and incorporated herein by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993 regarding proved reserves and related future net revenues and
the present value thereof is derived, as and to the extent described herein and
therein, from reserve reports and reserve report audits prepared by NSAI,
independent oil and gas consultants, and, to such extent, are included and
incorporated by reference herein in reliance upon the authority of such firm as
experts with respect to the matters contained in such reports and audits.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). Such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the SEC at Judiciary Plaza, Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549; at Suite 1400, Northwestern Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661; and at 7 World Trade
Center, New York, New York 10048. Copies of such material may also be obtained
by mail at prescribed rates from the Public Reference Section of the SEC,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
the Common Stock is traded on the NYSE, and such reports, proxy statements and
other information may be inspected at the NYSE, 20 Broad Street, New York, New
York 10005.
The Company has filed with the SEC a Registration Statement on Form S-3
(together with any amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended, with respect to the SIRENs offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits thereto. For further information
with respect to the Company and the SIRENs, reference is made to the
Registration Statement and the exhibits thereto. Copies of the Registration
Statement are available from the SEC in the manner provided above. Statements
contained in this Prospectus concerning the provisions of documents filed with
the Registration Statement as exhibits are necessarily summaries of such
documents, and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed with the SEC.
47
<PAGE> 49
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document heretofore filed by the Company with the SEC
pursuant to Section 13 of the Exchange Act is incorporated herein by reference:
The Company's Annual Report on Form 10-K for the year ended December 31,
1993.
All documents filed by the Company pursuant to Section 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 SIRENs shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained 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 other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY A
REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS).
REQUESTS SHOULD BE ADDRESSED TO SNYDER OIL CORPORATION, 1625 BROADWAY, SUITE
2200, DENVER, COLORADO 80202, ATTENTION: INVESTOR RELATIONS, (303) 592-8638.
48
<PAGE> 50
APPENDIX
(GRAPHIC IMAGE OMITTED ON PAGE 2 OF THE PROSPECTUS IS DESCRIBED AS: MAP OF THE
UNITED STATES SHOWING THE LOCATIONS OF THE COMPANY'S MAJOR GAS FACILITIES,
CORPORATE OFFICES, FIELD OFFICES AND MAJOR PRODUCING PROPERTIES)
<PAGE> 51
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES OFFERED HEREBY, OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE SECURITIES OFFERED BY THIS PROSPECTUS, IN ANY JURISDICTION OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary...................... 3
Use of Proceeds......................... 8
Capitalization.......................... 8
Price Range of Common Stock and
Dividends............................. 9
Selected Historical Financial
Information........................... 10
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 11
Business and Properties................. 15
Description of SIRENs................... 28
Description of Capital Stock............ 41
Certain Federal Income Tax
Considerations........................ 43
Underwriting............................ 46
Legal Opinions.......................... 47
Experts................................. 47
Available Information................... 47
Incorporation of Certain Documents by
Reference............................. 48
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SOCO LOGO)
Snyder Oil Corporation
$100,000,000
% Step-up Convertible
Subordinated Notes Due 2001
(Step-up Income Redeemable
Equity Notes(TM) -- SIRENs(TM))
---------------------------
PROSPECTUS
---------------------------
CS First Boston
PaineWebber Incorporated
Petrie Parkman & Co.
Smith Barney Shearson Inc.
(TM)Trademark of CS First Boston Corporation
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 52
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this Registration
Statement shall have the meanings assigned to them in the Prospectus which forms
a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the Registration Fee and the NASD Filing Fee, the following
itemized table sets forth estimates of those expenses payable by the Company in
connection with the offer and sale or exchange of the securities offered hereby:
<TABLE>
<S> <C>
Registration Fee......................................................... $39,656
NASD Filing Fee.......................................................... 12,000
Printing and Engraving Expenses.......................................... *
Legal Fees and Expenses.................................................. *
Blue Sky Fees and Expenses............................................... *
Accountants' Fees and Expenses........................................... *
Engineers' Fees and Expenses............................................. *
Rating Agency Fees....................................................... *
Miscellaneous Fees and Expenses.......................................... *
-------
Total.......................................................... $ *
-------
-------
---------------
* To be supplied by amendment
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated in Delaware. Under Section 145 of the DGCL,
a Delaware corporation has the power, under specified circumstances, to
indemnify its directors, officers, employees and agents in connection with
actions, suits or proceedings brought against them by a third party or in the
right of the corporation, by reason of the fact that they were or are such
directors, officers, employees or agents, against expenses and liabilities
incurred in any such action, suit or proceeding so long as they acted in good
faith and in a manner that they reasonably believed to be in, or not opposed to,
the best interests of such corporation, and with respect to any criminal action,
that they had no reasonable cause to believe their conduct was unlawful. With
respect to suits by or in the right of such corporation, however,
indemnification is generally limited to attorneys' fees and other expenses and
is not available if such person is adjudged to be liable to such corporation
unless the court determines that indemnification is appropriate. A Delaware
corporation also has the power to purchase and maintain insurance for such
persons. Article Ninth of the Certificate of Incorporation of the Registrant
provides for mandatory indemnification of directors and officers to the fullest
extent permitted by Section 145 of the DGCL. Reference is made to the
Certificate of Incorporation of the Registrant.
Reference is also made to the indemnification provisions of Section 7 of
the Underwriting Agreement, the form of which has been filed as Exhibit 1.1
hereto, under which the Underwriters have agreed to indemnify the Registrant,
its directors and officers and certain other persons against liabilities,
including liabilities under the Securities Act of 1933, with respect to
information furnished in writing to the Registrant for use in this Registration
Statement.
The Registrant has entered into indemnification agreements with each of its
officers and directors and may in the future enter into such indemnification
agreements with its directors, officers, employees and agents. Such
indemnification agreements are intended to provide a contractual right to
indemnification, to the extent permitted by law, for costs, expenses (including
attorneys' fees and disbursements), judgments, penalties, fines and amounts paid
in settlement actually and reasonably incurred by the person to be indemnified
in connection with any proceeding (including, to the extent permitted by law,
any derivative action) to which they are, or are
II-1
<PAGE> 53
threatened to be made, a party by reason of their status or decisions or actions
in such positions. Such indemnification agreements do not change the basic legal
standards for indemnification set forth in DGCL or the Certificate of
Incorporation of the Registrant. Such provisions are intended to be in
furtherance, and not in limitation of, the general right to indemnification
provided in the certificate of incorporation and Bylaws of the Registrant.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided that such provision may not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the DGCL or
(iv) for any transaction from which the director derived an improper personal
benefit. Article Tenth of the Registrant's Certificate of Incorporation contains
such a provision.
The above discussion of the Registrant's Certificate of Incorporation and
Sections 102(b)(7) and 145 of the DGCL is not intended to be exhaustive and is
qualified in its entirety by such Certificate of Incorporation and statutes.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1.1 -- Form of Underwriting Agreement.*
4.1.1 -- Certificate of Incorporation of Registrant -- incorporated by
reference from Exhibit 3.1 to the Registrant's Registration Statement
on Form S-4 (Registration No. 33-33455).
4.1.2 -- Certificate of Amendment to Certificate of Incorporation of
Registrant filed February 9, 1990 -- incorporated by reference from
Exhibit 3.1.1 to the Registrant's Registration Statement on Form S-4
(Registration No. 33-33455).
4.1.3 -- Certificate of Amendment to Certificate of Incorporation of
Registrant filed May 22, 1991 -- incorporated by reference from
Exhibit 3.1.2 to the Registrant's Registration Statement on Form S-1
(Registration No. 33-43106).
4.1.4 -- Certificate of Amendment to Certificate of Incorporation of
Registrant filed May 24, 1993 -- incorporated by reference from
Exhibit 3.1.5 to the Registrant's Form 10-Q for the quarter ended
June 30, 1993 (File No. 1-10509).
4.1.5 -- Certificate of Designations, Powers, Preferences and Rights of the
Registrant's $4.00 Convertible Exchangeable Preferred
Stock -- incorporated by reference from Exhibit 3.1.3 to the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1991 (File No. 1-10509).
4.1.6 -- Certificate of Designations of the Registrant's $6.00 Convertible
Exchangeable Preferred Stock -- incorporated by reference from
Exhibit 3.1.4 to the Registrant's Form 10-Q for the quarter ended
June 30, 1993 (File No. 1-10509).
4.2 -- By-Laws of Registrant -- incorporated by reference from Exhibit 3.2
to the Registrant's Registration Statement on Form S-4 (Registration
No. 33-33455).
4.3 -- Form of Indenture.**
4.4 -- Form of Note (included in Exhibit 4.3).
5.1 -- Opinion of Peter E. Lorenzen, Vice President and General Counsel of
the Registrant, as to legality of the securities registered hereby.**
8.1 -- Opinion of Kelly, Hart & Hallman as to certain federal income tax
consequences.**
12.1 -- Computation of Ratio of Earnings to Fixed Charges.***
23.1 -- Consent of Kelly, Hart & Hallman to use of their opinion filed as
Exhibit 8.1 (set forth in their opinion filed as Exhibit 8.1).
23.2 -- Consent of Arthur Andersen & Co.***
</TABLE>
II-2
<PAGE> 54
<TABLE>
<S> <C>
23.3 -- Consent of Netherland, Sewell, & Associates, Inc.***
23.4 -- Consent of Peter E. Lorenzen, Esq., Vice President and General
Counsel, to the use of his opinion filed as Exhibit 5.1 (set forth in
his opinion filed as Exhibit 5.1).
24.1 -- Powers of attorney (set forth on the signature page hereof).
25.1 -- Statement of Eligibility of Trustee on Form T-1.*
99.1 -- Report of Netherland, Sewell & Associates, Inc. dated February 10,
1994 relating to certain of the Registrant's property
interests -- incorporated by reference from Exhibit 28.1 to the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1993 (File No. 1-10509).
99.2 -- Report of Netherland, Sewell & Associates, Inc. dated February 11,
1994 relating to their audit of reserve estimates -- incorporated by
reference from Exhibit 28.2 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1993 (File No. 1-10509).
</TABLE>
- ---------------
* Filed herewith
** To be filed by amendment
*** Previously filed
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, 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 of 1933, each posteffective 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.
(b) The undersigned Registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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 of 1933 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 SEC such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling persons 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 Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 55
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Fort Worth, State of Texas, on March 31, 1994.
SNYDER OIL CORPORATION
By /s/ PETER E. LORENZEN
Peter E. Lorenzen,
Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
* Director and Chairman March 31, 1994
John C. Snyder (Principal Executive Officer
of Registrant)
* Director and President March 31, 1994
Thomas J. Edelman (Principal Financial Officer
of Registrant)
* Director and Executive Vice March 31, 1994
John A. Fanning President
* Director March 31, 1994
Roger W. Brittain
* Director March 31, 1994
John A. Hill
* Director March 31, 1994
B. J. Kellenberger
* Director March 31, 1994
John H. Lichtblau
* Director March 31, 1994
James E. McCormick
* Director March 31, 1994
Alfred M. Micallef
* Vice President and Controller March 31, 1994
James H. Shonsey (Principal Accounting
Officer)
*By /s/ PETER E. LORENZEN
Peter E. Lorenzen, Attorney-in-Fact
</TABLE>
II-4
<PAGE> 1
EXHIBIT 1.1
$100,000,000 PRINCIPAL AMOUNT
SNYDER OIL CORPORATION
% STEP-UP CONVERTIBLE SUBORDINATED NOTES DUE 2001
(STEP-UP INCOME REDEEMABLE EQUITY NOTES(TM) -- SIRENS(TM))
UNDERWRITING AGREEMENT
April __, 1994
CS FIRST BOSTON CORPORATION
PAINEWEBBER INCORPORATED
PETRIE PARKMAN & CO., INC.
SMITH BARNEY, SHEARSON INC.
c/o CS First Boston Corporation
Park Avenue Plaza
New York, N.Y. 10055
Dear Sirs:
1. Introductory. Snyder Oil Corporation, a Delaware corporation
("Company"), proposes to issue and sell $100,000,000 aggregate principal
amount of its % Step-up Convertible Subordinated Notes Due 2001 (Step-up
Income Redeemable Equity Notes(TM)--SIRENs(TM)) (the "Firm Securities") to
be issued under an indenture, dated as of April 1, 1994 ("Indenture"),
between the Company and Texas Commerce Bank National Association, as
trustee (the "Trustee"). The Company also proposes to issue and sell not
more than $15,000,000 aggregate principal amount of such securities (the
"Optional Securities") if and to the extent that the right to purchase such
Optional Securities is exercised as herein described. The Firm Securities
and the Optional Securities are hereinafter collectively referred to as the
"Securities." The
- -------------------------
(TM) Trademark of CS First Boston Corporation
<PAGE> 2
Securities are convertible into shares of the Company's common stock, par
value $.01 per share ("Common Stock"), at any time prior to the maturity of
the Securities, unless the Securities have been previously redeemed or
otherwise acquired by the Company, upon the terms and subject to the
conditions set forth in the Indenture. The shares of Common Stock issuable
upon conversion of the Securities are hereinafter referred to as the
"Shares." The Company hereby agrees with the several Underwriters named in
Schedule A hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"), and a registration
statement (No. 33-52807) on such Form, including a form of prospectus
relating to the Securities and the Shares, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has
been declared effective under the Act and is not proposed to be amended
or (ii) is proposed to be amended by amendment or post-effective
amendment. If the Company does not propose to amend such registration
statement and if any post-effective amendment to such registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent such amendment has been
declared effective by the Commission. For purposes of this Agreement,
"Effective Time" means (i) if the Company has advised you that it does
not propose to amend such registration statement, the date and time as
of which such registration statement, or the most recent post-effective
amendment thereto (if any) filed prior to the execution and delivery of
this Agreement, was declared effective by the Commission, or (ii) if the
Company has advised you that it proposes to file an amendment or post-
effective amendment to such registration statement, the date and time as
of which such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. "Effective Date" means the date of the Effective Time.
Such registration statement, as amended at the Effective Time, including
all material incorporated by reference therein and information (if any)
deemed to be a part of such registration statement as of the Effective
Time pursuant to Rule 430A(b) under the Act, is hereinafter referred to
as the "Registration Statement," and the form of prospectus relating to
the Securities and the Shares, as first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the
Act or (if no such filing is required) as included in the Registration
Statement, including all material incorporated by reference in such
prospectus, is hereinafter referred to as the "Prospectus."
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<PAGE> 3
(b) If the Effective Time is prior to the execution and delivery
of this Agreement: (i) on the Effective Date, the Registration
Statement conformed in all material respects to the requirements of the
Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission ("Rules and
Regulations") and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) on the
date of this Agreement and at the time of filing of the Prospectus
pursuant to Rule 424(b), the Registration Statement conforms, and will
conform, in all material respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and does not include,
and will not include, any untrue statement of a material fact and does
not omit, and will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading and (iii) at the time of filing of the Prospectus pursuant to
Rule 424(b), the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations and will not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
If the Effective Time is subsequent to the execution and delivery of
this Agreement: on the Effective Date, the Registration Statement and
the Prospectus will conform in all material respects to the requirements
of the Act, the Trust Indenture Act and the Rules and Regulations, the
Registration Statement will not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
the Prospectus will not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The two preceding sentences do not apply to
statements in or omissions from the Registration Statement or Prospectus
based upon written information furnished to the Company by any
Underwriter through you specifically for use therein or contained in the
Statement of Eligibility and Qualification on Form T-1 furnished by the
Trustee and filed as an exhibit to the Registration Statement.
(c) The documents which are incorporated by reference in the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, when they were filed with the Commission or were or
hereafter are last amended, complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Rules and Regulations promulgated under the
Exchange Act, and when read together with the information in the
Prospectus, no such document, when it was filed with the
-3-
<PAGE> 4
Commission or was or hereafter is last amended, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(d) All the outstanding shares of Common Stock of the Company
have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights. The
Shares have been duly authorized and reserved for issuance upon the
conversion of the Securities and, if and when issued upon such
conversion in accordance with the provisions of the Indenture, will be
validly issued, fully paid, nonassessable and free of any preemptive or
other similar rights. The capital stock of the Company conforms to the
description thereof contained in the Registration Statement and the
Prospectus in all material respects. There are no outstanding options,
warrants or other rights to acquire from the Company any capital stock
except pursuant to the stock option plans and agreements referred to and
otherwise described in the Registration Statement or the Prospectus.
(e) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, and
is duly registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify will
not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the
Company and the Subsidiaries (as hereinafter defined) taken as a whole.
(f) All the Company's subsidiaries that are required to be
listed in an exhibit to the Registration Statement or to any document
incorporated by reference therein are so listed (collectively, the
"Subsidiaries"). Each Subsidiary is a corporation or limited
partnership duly organized, validly existing and in good standing in the
jurisdiction of its organization, and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or
place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure to
so register or qualify will not have a material adverse effect on the
condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole. All the outstanding shares of capital stock of, or other equity
interests in, each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and are owned by the
Company directly, or indirectly through one of the other Subsidiaries,
free and clear of any lien, adverse claim,
-4-
<PAGE> 5
security interest, equity or other encumbrance, except for the lien
granted pursuant to the bank credit facility referenced in the
Registration Statement.
(g) The Company and the Subsidiaries have all requisite
corporate power and authority, and have obtained all necessary
authorizations, approvals, orders, licenses, franchises, certificates
and permits of and from all governmental regulatory officials and bodies
("Permits"), to own, lease and operate their respective properties and
conduct their respective businesses as described in the Registration
Statement and the Prospectus, except where the failure to obtain such
Permits will not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole. Each
of the Company and the Subsidiaries has fulfilled and performed all its
current material obligations with respect to such Permits and no event
has occurred which allows, or after notice or lapse of time, or both,
would allow, revocation or termination thereof or result in any other
material impairment of the rights of the holder of any such Permit,
subject in each case to such qualification as may be set forth in the
Registration Statement and the Prospectus and except where the failure
to do so will not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole. Except
as described in the Registration Statement and the Prospectus and as is
customary in the oil and gas industry or in the areas where the
properties of the Company or the Subsidiaries are located, such Permits
contain no restrictions that are materially burdensome to the Company
and the Subsidiaries taken as a whole. The Company and the Subsidiaries
own, or possess adequate rights to use, all trademarks, service marks
and other rights necessary for the conduct of their business as
presently conducted and described in the Registration Statement and the
Prospectus, and neither the Company nor any of the Subsidiaries has
received any notice of conflict with the asserted rights of others in
any such respect that would materially adversely affect their business
and neither the Company nor any Subsidiary knows of any basis therefor.
The property and business of the Company and the Subsidiaries taken as a
whole conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(h) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened, against the Company or any
of the Subsidiaries, or to which the Company or any of the Subsidiaries,
or to which any of their respective properties, is subject that are
required to be described in the Registration Statement or the Prospectus
but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are
-5-
<PAGE> 6
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement that are not
described or filed as required by the Act.
(i) Neither the Company nor any of the Subsidiaries is (i) in
violation of any term or provision of its certificate or articles of
incorporation or bylaws, or other organizational documents, or of any
law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries or of any
franchise, license, permit, judgment or any decree of any court or
governmental agency or body having jurisdiction over the Company or any
of the Subsidiaries or (ii) in default (and no event has occurred that
with notice or lapse of time, or both, would constitute a default) in
any respect in the due performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence
of indebtedness or in any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound,
which default would have a material adverse effect on the condition
(financial or other) business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(j) Neither the execution, delivery or performance of this
Agreement or the Indenture by the Company, the issuance, offer, sale or
delivery of the Securities, or the issuance of the Shares, nor the
consummation by the Company of the transactions contemplated by this
Agreement or the Indenture (i) requires any consent, approval,
authorization or other order of, or registration or filing with, any
court, regulatory body, administrative agency or other governmental
body, agency or official (other than (A) the registration of the
Securities and the Shares under the Act, (B) qualification of the
Indenture under the Trust Indenture Act and (C) compliance with the
securities or Blue Sky laws of various jurisdictions, all of which will
be, or have been, effected in accordance with this Agreement) or
conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the
Company or any of the Subsidiaries or (ii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under,
any agreement, indenture, lease or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound, or violates or will violate
any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of the Subsidiaries or any of
their respective properties or (iii) results or will result in the
creation or imposition of any lien, charge or
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<PAGE> 7
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to
which any of them is a party or by which any of them may be bound or to
which any of the property or assets of any of them is subject.
(k) Arthur Andersen & Co., the accountants for the Company who
have certified the financial statements and the related financial
statement schedules included in the Company's most recent Annual Report
on Form 10-K, which is incorporated by reference in the Prospectus, are
independent public accountants with respect to the Company and the
Subsidiaries as required by the Act.
(l) Netherland, Sewell & Associates, Inc. ("Netherland Sewell"),
whose reserve reports and audits are filed as exhibits to the Company's
most recent Annual Report on Form 10-K, are independent petroleum
engineers with respect to the Company and the Subsidiaries.
(m) The consolidated financial statements, together with related
schedules and notes, included in or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
consolidated financial position, results of operations and cash flows of
the Company and the Subsidiaries on the basis stated in the Company's
most recent Annual Report on Form 10-K at the respective dates or for
the respective periods to which they apply. Such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein. The reserve reports and
audits of Netherland Sewell present the proved reserves, future net
revenues therefrom and discounted present value thereof in compliance
with the applicable Rules and Regulations, and all of the information
furnished by the Company to Netherland Sewell and used in connection
with the preparation of such reports and audits (including, but not
limited to, information regarding working interests, net revenue
interests and pricing) was true and correct in all material respects as
of the applicable effective date of such reports and audits and
conformed with the applicable Rules and Regulations. The other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus are accurately presented and
prepared on a basis consistent with such financial statements or reserve
reports or audits and the books and records of the Company.
(n) The Company has all corporate power and authority necessary
to execute and deliver this Agreement and the Indenture to perform its
obligations under this Agreement and the Indenture. The execution and
delivery of, and the
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<PAGE> 8
performance by the Company of its obligations under, this Agreement has
been duly and validly authorized by the Company, and this Agreement has
been duly executed and delivered by the Company and constitutes a valid
and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws relating to or
affecting creditors' rights generally and by general equitable
principles. The Indenture and the Securities, the execution and
delivery by the Company of the Indenture and the Securities and the
consummation of the transactions contemplated by the Indenture and the
Securities have been duly authorized by the Company. If the Securities
are issued in accordance with the provisions of the Indenture (when the
Indenture has been executed and delivered by the Company and assuming
due authorization, execution and delivery by the Trustee), the
Securities and the Indenture will be valid and legally binding
obligations of the Company enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general
equitable principles.
(o) The respective forms of the Indenture and the Securities
filed as exhibits to the Registration Statement conform, and, if and
when executed by the Company, the Indenture and the Securities so
executed will conform, to the respective descriptions thereof contained
in the Prospectus in all material respects.
(p) Except as disclosed in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which such
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of the Subsidiaries has incurred any
liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that is material to
the Company and the Subsidiaries taken as a whole, and there has not
been any material change in the capital stock, or material increase in
the short-term debt or long-term debt, of the Company or any of the
Subsidiaries, or any material adverse change, or any development
involving or which may reasonably be expected to involve a prospective
material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(q) Each of the Company and the Subsidiaries, except with
respect to its respective interests in oil and gas leases, has good and
marketable title in fee
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<PAGE> 9
simple to all material real property owned by it, valid and defensible
title to all material personal property owned by it and valid and
enforceable interests in leases of all material real and personal
property leased by it, in each case free and clear of all security
interests, mortgages, pledges, liens, encumbrances, charges and defects
(collectively, "encumbrances"), except for those encumbrances granted to
secure indebtedness specified in the Registration Statement and those
that do not materially and adversely affect the value of such property
or materially interfere with the intended use of such property by it.
Each of the Company and the Subsidiaries has good and defensible title
to all of its respective interests in oil and gas leases, free and clear
of any encumbrances, except encumbrances granted to secure the
indebtedness specified in the Registration Statement, subject only to
liens for taxes or charges of mechanics or materialmen not yet due and
to encumbrances under gas sales contracts, operating agreements,
unitization and pooling agreements and other similar agreements
customarily found in connection with comparable drilling and producing
operations and to title defects that are, singly and in the aggregate,
not material in amount and do not interfere with its use or enjoyment of
its oil and gas properties. Each of the Company and the Subsidiaries
has conducted such title investigations and has acquired its respective
interests in oil and gas leases in such manner as is customary in the
oil and gas industry. Each of the Company and the Subsidiaries has
complied in all material respects with the terms of the oil and gas
leases in which it purports to own an interest, and all of such leases
are in full force and effect (except where the failure so to comply or
to be in full force and effect would not have a material adverse effect
on the condition (financial or other), business, properties, net worth
or results of operations of the Company and its Subsidiaries taken as a
whole).
(r) The Company has not distributed and, prior to the latest to
occur of (i) the First Closing Date (as defined below), (ii) the Second
Closing Date (as defined below) and (iii) the completion of the
Company's distribution of the Securities, will not distribute any
offering material in connection with the offering and sale of the
Securities other than the Registration Statement, the Prospectus or
other materials permitted by the Act.
(s) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(t) To the Company's knowledge, neither the Company nor any of
the Subsidiaries nor any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
rule or regulation, which payment,
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<PAGE> 10
receipt or retention of funds is of a character required to be disclosed
in the Prospectus.
(u) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Act.
(v) Neither the Company nor any of the Subsidiaries is involved
in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.
(w) Each of the Company and the Subsidiaries has filed all
federal, state and local tax returns that are required to be filed or
has obtained extensions thereof, and has paid all taxes shown on such
returns and all assessments received by it to the extent that the same
have become due or is contesting such taxes in good faith by appropriate
proceedings.
(x) Except for the shares of capital stock of each of the
Subsidiaries, neither the Company nor any of the Subsidiaries owns any
share of stock or any other securities of any corporation or has any
equity interest in any firm, partnership, association or other entity
material in amount in relation to the net assets of the Company and the
Subsidiaries taken as a whole, other than as disclosed in the Prospectus
or as reflected in the consolidated financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus.
(y) The Company has complied with all of the provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida statutes,
and all regulations promulgated thereunder relating to issuers doing
business with the Government of Cuba or with any person or any affiliate
located in Cuba.
(z) The Company has caused each of John C. Snyder, Thomas J.
Edelman and John A. Fanning to enter into an agreement with the
Underwriters providing that for a period of 90 days after the effective
date of the Registration Statement they will not without the prior
written consent of CS First Boston Corporation sell, contract to sell,
cause or in any way permit to be sold, or
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<PAGE> 11
otherwise dispose of any shares of Common Stock or any shares of
preferred stock, par value $.01 per share ("Preferred Stock"), of the
Company or any depositary shares representing an interest in Preferred
Stock (or any securities convertible into or exercisable for any such
shares of Common Stock or Preferred Stock or depositary shares), except
that each such person may dispose of Common Stock with a value not to
exceed in the aggregate $100,000 owned by such person on the date hereof
as a gift.
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements contained herein, but subject to
the terms and conditions set forth herein, the Company agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of 100% of the principal
amount thereof, plus accrued interest, if any, from ___________ ___, 1994
to the First Closing Date (as defined below), the respective principal
amounts of Firm Securities set forth opposite the name of such Underwriter
in Schedule A hereto.
The Company will deliver the Firm Securities to you at the office of
CS First Boston Corporation, Park Avenue Plaza, 55 East 52nd Street, New
York, New York, 10055 or such other place as you and the Company determine,
against payment of the purchase price, by certified or official bank check
or checks payable in New York Clearing House (next day) funds drawn to the
order of the Company, at the above office of CS First Boston Corporation,
at 10:00 A.M., New York time, on April ___, 1994, or at such other place
and at such other time not later than seven full business days thereafter
as you and the Company determine, such time being hereinafter referred to
as the "First Closing Date." The Firm Securities will be represented by
one or more global securities registered in the name of Cede & Co., as
nominee of the Depository Trust Company, Inc. ("DTC"). Such certificates
will be made available for checking and packaging at the above office of CS
First Boston Corporation or such other place as you and the Company
determine at least 24 hours prior to the First Closing Date.
In addition, upon written notice from you given to the Company not
more than 30 days subsequent to the date of the initial public offering of
the Firm Securities, the Underwriters may purchase all or less than all of
the Optional Securities at a purchase price of 100% of the principal amount
thereof, plus accrued interest, if any, from April __, 1994, to the Second
Closing Date (as defined below). The Company agrees to sell to the
Underwriters the principal amount of Optional Securities specified in such
notice and the Underwriters agree, severally and not jointly, to purchase
such Optional Securities. Such Optional Securities shall be purchased from
the Company for the account of each Underwriter in the same proportion as
the principal amount of Firm
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<PAGE> 12
Securities set forth opposite such Underwriter's name in Schedule A hereto
bears to the total principal amount of Firm Securities (subject to
adjustment by you to round purchases to the nearest $1,000 principal
amount) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities, or any portion
thereof, may be surrendered and terminated at any time upon notice by you
to the Company.
The time for the delivery of and payment for the Optional Securities,
being hereinafter referred to as the "Second Closing Date" (which may be
the First Closing Date), shall be determined by you but shall not be later
than 10 days after written notice of election to purchase the Optional
Securities is given. The Company will deliver the Optional Securities to
you at the above office of CS First Boston Corporation or such other place
as you and the Company determine, against payment of the purchase price
therefor by certified or official bank check or checks in New York Clearing
House (next day) funds drawn to the order of the Company at the above
office of CS First Boston Corporation or such other place you and the
Company determine. The certificates for the Optional Securities will be
represented by one or more global securities registered in the name of Cede
& Co., as nominee of DTC. Such certificates will be made available for
checking and packaging at the above office of CS First Boston Corporation
or such other place as you and the Company determine at least 24 hours
prior to the Second Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set
forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time is prior to the execution and delivery
of this Agreement, the Company will file the Prospectus with the
Commission pursuant to and in accordance with subparagraph (1) (or, if
applicable and if consented to by you, subparagraph (3) or (4)) of
Rule 424(b) not later than the earlier of (i) the second business day
following the execution and delivery of this Agreement or (ii) the fifth
business day after the Effective Date. The Company will advise you
promptly of any such filing pursuant to Rule 424(b).
(b) The Company will advise you promptly of any proposal to
amend or supplement the registration statement as filed or the related
prospectus or the
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<PAGE> 13
Registration Statement or the Prospectus and will not effect any such
amendment or supplementation to which you shall reasonably object after
being so advised or which is not in compliance with the Rules and
Regulations. So long as a prospectus relating to the Securities is
required to be delivered under the Act, the Company will not file any
information, documents or reports pursuant to the Exchange Act without
delivering a copy of such information, documents or reports to you prior
to or concurrently with such filings. The Company will also advise you
promptly of the effectiveness of the Registration Statement (if the
Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of the Registration
Statement or the Prospectus and of the institution by the Commission of
any stop order proceedings in respect of the Registration Statement and
will make every reasonable effort to prevent the issuance of any such
stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance. Neither your consent
to, nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its security holders an earnings statement covering a period of at least
12 months beginning after the Effective Date which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act. For
the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes the Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to you copies of the Registration
Statement (five of which will be signed and will include all exhibits),
each related preliminary prospectus, the Prospectus and all amendments
and supplements to
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<PAGE> 14
such documents (including any document filed under the Exchange Act and
deemed to be incorporated by reference therein), in each case as soon as
available and in such quantities as you reasonably request.
(f) The Company will arrange for the registration and
qualification of the Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as you
may reasonably designate and will continue such qualifications in effect
so long as required for the distribution.
(g) During the period of three years hereafter, the Company will
furnish to you, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and the
Company will furnish to you (i) as soon as available, a copy of each
report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to stockholders, and
(ii) from time to time, such other information concerning the Company as
you may reasonably request.
(h) The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing and filing
with the Commission of the Registration Statement (including financial
statements and schedules and exhibits thereto) and the Prospectus, and
each amendment or supplement to either of them, (ii) the printing and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement,
the Prospectus, and all amendments or supplements to either of them as
may be reasonably requested for use in connection with the offering and
sale of the Securities, (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, and, if and
when issued, the Shares, including any stamp taxes and any transfer
agent's, trustee's or registrar's fees and expenses payable in
connection with the original issuance of any of the foregoing, (iv) the
printing and delivery of the Indenture, the preliminary and supplemental
Blue Sky Memoranda and all other agreements, memoranda, correspondence
and other documents printed and delivered in connection with the
offering of the Securities, (v) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of
the several states as provided in Section 5(f) (including the reasonable
fees, expenses and disbursements of Baker & Botts, L.L.P. relating to
the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration
and qualification), (vi) the filing fees and the fees and expenses of
Baker & Botts, L.L.P. in connection with any filings required to be made
with the National
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<PAGE> 15
Association of Securities Dealers, Inc. in connection with the offering,
(vii) the fees and expenses of the Company's accountants and petroleum
engineers and the fees and expenses of counsel (including local and
special counsel) for the Company, (viii) any fees charged by any rating
agency in connection with a rating of the Securities, (ix) the
registration of the Securities under the Exchange Act and the fees and
expenses of listing the Shares on the New York Stock Exchange and
(x) the performance by the Company of its other obligations under this
Agreement, including the fees of the Trustee.
(i) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of its
capital stock or debt securities to facilitate the sale or resale of the
Securities.
(j) The Company will reserve and keep available at all times,
free of any preemptive or other similar rights, a sufficient number of
shares of Common Stock to provide for the issuance of such shares upon
conversion of the Securities.
(k) The Company will use its best efforts to cause the Shares,
if and when issued, to be listed on the New York Stock Exchange as
promptly as possible.
(l) For a period of 90 days after the date of the commencement
of the public offering of the Securities by you, the Company will not
issue, sell, contract to sell, grant any option for the sale of or
otherwise dispose of, directly or indirectly, any capital stock,
including, but not limited to, any Common Stock or Preferred Stock or
any depositary shares representing an interest in Preferred Stock (or
any securities convertible into or exercisable for any such shares of
Common Stock or Preferred Stock or depositary shares), other than the
Securities or the Shares (if any are issued upon conversion of the
Securities), without the prior written consent of CS First Boston
Corporation, except that the Company may sell or issue, or grant options
with respect to, shares of the Common Stock in connection with the
Company's stock option plans or other outstanding options or with the
conversion of its outstanding convertible instruments.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities on the
Second Closing Date will be subject to the accuracy of the representations
and warranties on the part of the Company herein, to the accuracy of the
statements of the Company's officers made pursuant to the
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<PAGE> 16
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) You shall have received a letter, dated the date of delivery
thereof (which, if the Effective Time is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this
Agreement or, if the Effective Time is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the
amendment or post-effective amendment to the registration statement to
be filed shortly prior to the Effective Time), of Arthur Andersen & Co.
confirming that they are independent public accountants with respect to
the Company within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that:
(i) in their opinion the financial statements and
schedules examined by them and incorporated by reference in the
Registration Statement comply in form in all material respects with
the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of officials
of the Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than five days prior to the date of this Agreement, there was any
change greater than five percent in the consolidated capital
stock or the consolidated long-term debt of the Company or any
decrease greater than five percent in consolidated working
capital or net long-term assets, as compared with amounts shown
on the latest balance sheet included in the Prospectus; or
(B) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such
accountants, or to the subsequent specified date referred to in
clause (A), there were any decreases greater than five percent,
as compared with the period of corresponding length ended the
date of the latest income statement included in the Prospectus,
in consolidated oil and gas sales revenues or increases greater
than five percent in consolidated direct operating expenses;
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<PAGE> 17
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statement (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records
by analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
For purposes of this subsection, if the Effective Time is subsequent to
the execution and delivery of this Agreement, "Registration Statement"
shall mean the registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to the
Effective Time, and "Prospectus" shall mean the prospectus included in
the Registration Statement. All financial statements and schedules
included in material incorporated by reference into the Prospectus shall
be deemed included in the Registration Statement for purposes of this
subsection.
(b) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not
later than 10:00 P.M., New York time, on the date of this Agreement or
such later date as shall have been consented to by you. If the
Effective Time is prior to the execution and delivery of this Agreement,
the Prospectus shall have been filed with the Commission in accordance
with the Rules and Regulations and Section 5(a) of this Agreement.
Prior to such Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or you, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the
business or properties of the Company or its subsidiaries which, in the
judgment of a majority in interest of the
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<PAGE> 18
Underwriters, materially impairs the investment quality of the
Securities; (ii) any downgrading in the rating of any debt securities or
Preferred Stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or Preferred
Stock of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Company on any exchange
or in the over-the-counter market; (iv) any banking moratorium declared
by Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for
the Securities.
(d) You shall have received an opinion, dated such Closing Date,
of Peter E. Lorenzen, General Counsel for the Company, to the effect
that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus, and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify will not have a
material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the
Company and the Subsidiaries taken as whole;
(ii) Each of the Subsidiaries is a corporation or limited
partnership duly organized and validly existing in good standing
under the laws of the jurisdiction of its organization, with full
corporate or partnership power and authority to own, lease and
operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus, and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of
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<PAGE> 19
its business requires such registration or qualification, except where
the failure so to register or qualify will not have a material adverse
effect upon the Company and the Subsidiaries taken as a whole; and all of
the outstanding shares of capital stock of, or other equity securities
in, each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and
clear of any perfected security interest, or, to the best knowledge of
such counsel, any other security interest, lien, adverse claim, equity or
other encumbrance except for the lien granted pursuant to the bank credit
facility referenced in the Registration Statement;
(iii) The authorized and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
Prospectus; the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus under the caption "Description of Capital
Stock;" and the Securities, the Shares and the Indenture conform in
all material respects to the respective descriptions thereof
contained in the Prospectus under the captions "Description of
SIRENs" and "Description of Capital Stock;"
(iv) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid and nonassessable;
(v) The Securities have been duly authorized and executed
by the Company and, when certificates for the Securities are issued
and delivered to you against payment therefor in accordance with the
terms hereof, will be valid and legally binding obligations of the
Company, enforceable in accordance with the provisions thereof
(except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles), and will entitle the holders thereof to the rights
specified therein and in the Indenture; and, to the best knowledge of
such counsel, there are no preemptive or similar rights that entitle
any person to acquire any Securities upon the issuance thereof by the
Company;
(vi) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid and legally binding
obligation of the Company, enforceable in accordance with the
provisions thereof (except as such enforceability may be limited by
bankruptcy, insolvency, reorganization,
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<PAGE> 20
moratorium and other laws relating to or affecting creditors' rights
generally and by general equitable principles);
(vii) The Shares have been duly authorized by the Company
and reserved for issuance upon conversion of the Securities and, if
and when issued upon such conversion, will be validly issued, fully
paid and nonassessable; and, to the best knowledge of such counsel,
there are no preemptive or similar rights that will entitle any
person to acquire any Shares upon the issuance thereof by the
Company.
(viii) The form of certificate for the Securities
contemplated by the Indenture conforms to the requirements of New
York law; and the form of certificate for the Shares conforms to the
requirements of the Delaware General Corporation Law;
(ix) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by
the Commission;
(x) The Indenture (A) conforms in all material respects to
the applicable requirements of the Trust Indenture Act and (B) has
been duly qualified under the Trust Indenture Act;
(xi) The Company has full corporate power and authority to
enter into this Agreement and to perform its obligations (including
the sale and delivery of the Securities) hereunder, and this
Agreement has been duly authorized, executed and delivered by the
Company and is a valid, legal and binding agreement of the Company,
enforceable in accordance with its terms, except as rights to
indemnification and contribution hereunder may be limited by
applicable securities laws and except as the enforceability of the
Company's obligations hereunder may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles;
(xii) To the best knowledge of such counsel, neither the
Company nor any of the Subsidiaries (A) is in violation of its
certificate or articles of incorporation or bylaws, or other
organizational documents, (B) is in breach of, or in default (nor has
an event occurred that with notice, lapse
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<PAGE> 21
of time or both would constitute such a default) under, any indenture,
mortgage, deed of trust, note, bond, debenture, bank loan or credit
agreement, or any other evidence of indebtedness, agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which
any of them or any of their property is or may be bound or affected, (C)
is in violation of any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or any of the Subsidiaries
or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries or (D) has
received any notice of conflict with the asserted rights of others in
respect of trademarks, service marks or other rights necessary for the
conduct of their business, in each case in which such breach, default,
violation or conflict would have a material adverse effect on the
business, properties or operations of the Company and the Subsidiaries
taken as a whole;
(xiii) None of the execution, delivery or performance of
this Agreement or the Indenture, the offer, sale or delivery of the
Securities, the issuance of the Shares upon conversion of the
Securities, compliance by the Company with all provisions hereof or
consummation by the Company of the transactions contemplated hereby
(A) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default (or an event that with notice or lapse of
time, or both, would constitute a default) under, the certificate or
articles of incorporation or bylaws, or other organizational
documents, of the Company or any of the Subsidiaries or, to the best
knowledge of such counsel, any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party
or by which any of them or any of their respective properties is
bound, or any of the documents or agreements that are included or
incorporated by reference as exhibits to the Registration Statement;
(B) will, to the best knowledge of such counsel, result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries; or
(C) will result in any violation of any existing law, statute,
regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws) or, to the best knowledge of such
counsel, any existing judgment, injunction, order or decree of any
court or of any federal, state or other regulatory authority or other
governmental body having jurisdiction over the Company, any of the
Subsidiaries or any of their respective properties;
(xiv) No consent, approval, authorization or other order of,
or registration or filing with, any court, regulatory body,
administrative agency
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<PAGE> 22
or other governmental body, agency, or official is required on the part
of the Company for the valid issuance and delivery of the Securities to
you pursuant to this Agreement or the issuance of the Shares upon
conversion of the Securities, other than (A) the registration of the
Securities and the Shares, under the Act, (B) qualification of the
Indenture under the Trust Indenture Act, and (C) compliance with the
securities or Blue Sky laws of various jurisdictions;
(xv) The Registration Statement and the Prospectus (except
for the financial statements and the notes thereto and the schedules
and other financial and statistical data contained therein, as to
which such counsel need not express any opinion) comply as to form in
all material respects with the requirements of the Act;
(xvi) To the best knowledge of such counsel, (A) other than
as described in the Registration Statement and the Prospectus there
are no legal or governmental proceedings pending or threatened
against the Company or any of the Subsidiaries, or to which the
Company or any of the Subsidiaries or any of their respective
properties is subject, that are required to be described in the
Registration Statement or Prospectus and (B) there are no agreements,
contracts, indentures, leases or other documents or instruments, that
are required to be described in the Registration Statement or the
Prospectus, or filed as an exhibit to the Registration Statement,
that are not described or filed as required;
(xvii) To the best knowledge of such counsel, each of the
Company and the Subsidiaries holds all necessary governmental
authorizations, approvals, orders, licenses, certificates, franchises
and permits of and from all governmental regulatory officials and
bodies for the conduct of the material businesses in which it is
engaged and owns, or possesses adequate rights to use, all material
rights necessary for the conduct of such businesses, and to such
counsel's knowledge, none of the Company or the Subsidiaries has
received any notice of conflict with the asserted rights of others in
respect thereto, except where the failure to hold, or the conflict
with the asserted rights of others with respect to, such
authorizations, approvals, orders, licenses, certificates, franchises
or permits, would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole;
-22-
<PAGE> 23
(xviii) To the best knowledge of such counsel, there are no
statutes or regulations relating to the exploration for, development,
production and marketing of oil and gas that are required to be
described in the Registration Statement or Prospectus that are not
described as required;
(xix) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements
or other legal documents, are accurate in all material respects and
present fairly the information required to be shown;
(xx) Except as described in the Prospectus, such counsel
knows of no outstanding option, warrant or other right calling for
the issuance of, and such counsel knows of no commitment, plan or
arrangement to issue, any share of capital stock of the Company or
any security convertible into or exchangeable or exercisable for
capital stock of the Company; and except as described in the
Prospectus, such counsel does not know of any holder of any
securities of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to issue to such
holder or such person, or permit such holder or such person to
underwrite the sale of, any shares of capital stock of the Company
upon and as the result of the issuance and sale of the Securities to
you hereunder or the right to require registration under the Act of
an offering of shares of capital stock of the Company as a result of
the filing of the Registration Statement; and
(xxi) Although such counsel is not passing upon and does not
assume any responsibility for the accuracy or completeness of the
statements contained in the Registration Statement and Prospectus
(except with respect to paragraphs (iii), (xv) and (xix) above), such
counsel advises you that, on the basis of his participation in
conferences with other officers and employees of the Company,
representatives of the independent accountants and independent
petroleum consultants of the Company and representatives of the
Underwriters at which the contents of the Registration Statement and
the Prospectus and related matters were discussed (relying as to
materiality to a large extent upon other officers and representatives
of the Company), no facts have come to his attention that lead him to
believe that the Registration Statement or any amendment thereof
(other than the financial statements and the notes thereto and the
schedules and other financial, statistical and engineering data or
information included therein and the exhibits thereto), at the time
it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the
-23-
<PAGE> 24
statements therein not misleading or that the Prospectus or any
supplement thereto (other than the financial statements and the notes
thereto and the schedules and other financial, statistical and
engineering data or information included therein), as of its date, the
First Closing Date or Second Closing Date, as the case may be, contains
an untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
In rendering his opinion as aforesaid, such counsel may rely upon an
opinion or opinions, each dated such Closing Date, of other counsel
retained by him or the Company as to federal energy regulatory matters or
as to laws of any jurisdiction other than the United States, the State of
Texas, the State of New York and the corporate laws of the State of
Delaware, provided that (1) each such local counsel is acceptable to you,
(2) such reliance is expressly authorized by each opinion so relied upon
and a copy of each such opinion is delivered to you and is in form and
substance satisfactory to you, and (3) such counsel shall state in his
opinion that he believes that he and you are justified in relying thereon.
(e) You shall have received from Kelly, Hart & Hallman, a
professional corporation, special counsel for the Company, an opinion
dated such Closing Date to the effect that the statements in the
Prospectus under the caption "Certain Federal Income Tax Considerations"
are accurate and complete in all material respects.
(f) You shall have received from Baker & Botts, L.L.P., counsel
for the Underwriters, such opinion or opinions, dated such Closing Date,
with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as you may require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) You shall have received a certificate on behalf of the
Company, dated such Closing Date, of the President or any Vice President
and a principal financial or accounting officer of the Company in which
such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to such Closing Date,
that no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the best of such officer's knowledge,
no proceedings for that purpose
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<PAGE> 25
have been instituted or are contemplated by the Commission and that,
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial
position or results of operations of the Company and the Subsidiaries
except as set forth in or contemplated by the Prospectus or as described
in such certificate.
(h) You shall have received a letter, dated such Closing Date,
of Arthur Andersen & Co. which meets the requirements of subsection (a)
of this Section, except that the specified date referred to in such
subsection will be a date not more than five days prior to such Closing
Date for the purposes of this subsection.
(i) You shall have received a letter addressed to you and dated
the date hereof from Netherland Sewell, independent petroleum
consultants, substantially in the form heretofore approved by you.
(j) The Securities and the Shares shall have been qualified or
registered for offering and sale by you or dealers under the securities
or Blue Sky laws of such jurisdictions as you shall have requested prior
to the date hereof, and no order suspending the sale of the Securities
in any such jurisdiction shall have been issued as of or on the Closing
Date, and no proceedings for that purpose shall have been instituted or,
to your knowledge or to the knowledge of the Company, shall be
contemplated.
(k) You shall have received copies of the agreements between the
Underwriters and each of John C. Snyder, Thomas J. Edelman and John A.
Fanning specified in Section 2(z).
The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
7. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will
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<PAGE> 26
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you specifically for use therein; and
provided, further, that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus,
the indemnity agreement contained in this subsection (a) shall not inure to
the benefit of any Underwriter (or any person who controls such
Underwriter) from whom the person asserting any such losses, claims,
damages or liabilities purchased the Securities concerned, to the extent
that any such loss, claim, damage or liability of such Underwriter results
from the fact that there was not sent or given to such person, at or prior
to the written confirmation of the sale of such Securities to such person,
a copy of the Prospectus if the Company had previously furnished copies
thereof to such Underwriter and such untrue statement or omission or
alleged untrue statement or omission made in a preliminary prospectus was
corrected in the Prospectus.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of
the commencement thereof; but the omission so to
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<PAGE> 27
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation unless (i) the employment of separate counsel has been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party has failed to assume the defense and employ counsel
reasonably satisfactory to the indemnified party within a reasonable time
after commencement of such action or (iii) the named parties to any such
action (including any impleaded parties) include an indemnified and an
indemnifying party and the indemnified party has been advised in writing by
separate counsel that there may be one or more legal defenses available to
such indemnified party that are different from or additional to those
available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action or proceeding
on behalf of the indemnified party). In no event shall the indemnifying
party be liable for fees and expenses of more than one counsel for all
indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on any claims that are the
subject matter of such action.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above
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<PAGE> 28
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (e) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
the public was offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion
to their respective underwriting obligations and not joint.
(f) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange Act;
and the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each director
of the Company, to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act.
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<PAGE> 29
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Securities hereunder on either the
First Closing Date or Second Closing Date and the aggregate principal
amount of Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total principal
amount of Securities that the Underwriters are obligated to purchase on
such Closing Date, you may make arrangements satisfactory to the Company
for the purchase of such Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Securities that
such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate
principal amount of Securities with respect to which such default or
defaults occurs exceeds 10% of the total principal amount of Securities
that the Underwriters are obligated to purchase on such Closing Date, and
arrangements satisfactory to you and the Company for the purchase of such
Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 9
(provided that if such default occurs with respect to Optional Securities
after the First Closing Date, this Agreement will not terminate as to the
Firm Securities). As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section.
Nothing herein will relieve a defaulting Underwriter from liability for its
default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters
set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Company or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Securities. If
this Agreement is terminated pursuant to Section 8 or if for any reason the
purchase of the Securities by the Underwriters is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed
by it pursuant to Section 5 and the respective obligations of the Company
and the Underwriters pursuant to Section 7 shall remain in effect, and if
any Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Securities by the Underwriters is
not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event
specified in clause (iii), (iv) or (v) of Section 6(c), the Company will
reimburse the Underwriters for all out-of-pocket
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<PAGE> 30
expenses (including fees and disbursements of counsel) reasonably incurred
by them in connection with the offering of the Securities.
10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to you, c/o CS First Boston Corporation, Park Avenue Plaza,
55 East 52nd Street, New York, N.Y. 10055, Attention: Investment Banking
Department -- New Issue Processing Group, or, if sent to the Company, will
be mailed, delivered or telegraphed and confirmed to it at 777 Main Street,
Suite 2500, Fort Worth, Texas 76102, Attention: Peter E. Lorenzen, General
Counsel; provided, however, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7,
and no other person will have any right or obligation hereunder.
12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
* * * * *
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<PAGE> 31
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
SNYDER OIL CORPORATION
By:_______________________________________
President
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first
above written.
CS FIRST BOSTON CORPORATION
PAINEWEBBER INCORPORATED
PETRIE PARKMAN & CO., INC.
SMITH BARNEY SHEARSON INC.
BY: CS FIRST BOSTON CORPORATION
By:____________________________________
Vice President
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<PAGE> 32
SCHEDULE A
PRINCIPAL
UNDERWRITER AMOUNT
----------- ---------
CS First Boston Corporation . . . . . . . . . .
PaineWebber Incorporated . . . . . . . . . . .
Petrie Parkman & Co., Inc. . . . . . . . . . .
Smith Barney Shearson Inc. . . . . . . . . . . ______________
Total . . . . . . . . . . . . . . . . . . $100,000,000
A-1
<PAGE> 1
Registration No.________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
F O R M T-1
Statement of Eligibility and Qualification Under The Trust Indenture Act of 1939
Of A Corporation Designated To Act As Trustee
____________________
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
ORGANIZED UNDER THE LAWS OF
THE UNITED STATES OF AMERICA 74-0800980
(State of incorporation if not (I.R.S. employer
national bank) identification no.)
600 TRAVIS 77002
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
____________________
SNYDER OIL CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 75-2306158
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
777 MAIN STREET, SUITE 2500
FT. WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
______% STEP-UP CONVERTIBLE SUBORDINATED NOTES DUE 2001
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. General Information.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
NAME ADDRESS
---------- -------------
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank Dallas, Texas
Federal Deposit Insurance Corporation Washington, D.C.
National Bank Examiners Dallas, Texas
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of
eligibility:
Exhibit 1. A copy of the Articles of Association of the Trustee as
now in effect.
Exhibit 2. A copy of the certificate of authority of the Trustee
to commence business.
Exhibit 3. A copy of the authorization of the Trustee to exercise
corporate trust powers.
Exhibit 4. A copy of the existing bylaws of the Trustee.
Exhibit 5. Not Applicable.
Exhibit 6. The consents of the United States institutional
trustees required by Section 321(b) of the Trustee
Indenture Act of 1939.
Exhibit 7. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
Exhibit 8. Not Applicable.
Exhibit 9. Not Applicable.
The answer to Item 2 is based in part on information provided or
confirmed by the obligor. The accuracy and completeness of such information is
hereby disclaimed by the Trustee.
1
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Texas Commerce Bank National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Dallas, and State of Texas, on the ___th day of March, 1994.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/ GREG DICKEY
Name: Greg Dickey
Title: Assistant Vice President
2
<PAGE> 4
EXHIBIT 1
<PAGE> 5
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
FIRST: The title of this Association shall be TEXAS COMMERCE BANK
NATIONAL ASSOCIATION.
SECOND: The main office of the Association shall be in Houston, County
of Harris, State of Texas. The general business of the Association shall be
conducted at its main office and its branches.
THIRD: The Board of Directors of this Association shall consists of not
less than five nor more than twenty-five qualified persons, the exact number of
Directors within such minimum and maximum limits to fixed and determined from
time to time by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any annual or special meeting thereof.
Unless otherwise provided by the laws of the United States, any vacancy in the
Board of Directors for any reason, including an increase in the number thereof,
may be filled by action of the Board of Directors.
FOURTH: The annual meeting of the shareholders for the election of
Directors and the transaction of whatever other business may be brought before
said meeting shall be held at the main office or such other place as the Board
of Directors may designate, on the day of each year specified therefor in the
Bylaws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law; and all elections shall be
held according to such lawful regulations as may be prescribed by the Board of
Directors.
Nominations for election to the Board of Directors may be made by the Board of
Directors or by any shareholder of any outstanding class of capital stock of
the Association entitled to vote for election of directors. Nominations, other
than those made by or on behalf of the existing management of the Association,
shall be made in writing and shall be delivered or mailed to the Chairman or
the President of the Association and to the Comptroller of the Currency,
Washington, D. C., not less than 14 days nor more than 50 days prior to any
meeting of shareholders called for the election of directors; provided,
however, that if less than 21 days notice of the meeting is given to the
shareholder, such nomination shall be mailed or delivered to the Chairman or
President of the Association and to the Comptroller of the Currency not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) the name
and address of each proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the total number of shares of capital stock of the
Association that will be voted for each proposed nominee; (d) the name and
residence address of the notifying shareholder; and (e) the number of shares of
capital stock of the Association owned by the notifying shareholder.
Nominations not made in accordance herewith may, in his discretion, be
disregarded by the Chairman of the meeting and, upon his instructions, the vote
tellers may disregard all votes for each such nominee.
FIFTH: The amount of authorized capital stock of this Association shall
be
<PAGE> 6
$612,895,000 divided into 61,289,500 shares of common stock of the par value
per share of Ten Dollars ($10.00), but said capital stock may be increased or
decreased from time to time, in accordance with the provisions of the laws of
the United States.
No holder of shares of the capital stock of any class of this Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of this Association, whether now or hereafter authorized, or to
any obligations convertible into stock of this Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.
The Association, at any time and from time to time, may authorize and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders.
SIXTH: The Board of Directors shall appoint one of its members President
of this Association, who shall be Chairman of the Board, unless the Board
appoints another director to be the Chairman. The Board of Directors shall
have the power to appoint one or more Vice Presidents and to appoint a Cashier
and such other officers and employees as may be required to transact the
business of this Association.
The Board of Directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all Bylaws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
SEVENTH: The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Houston, Texas, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency, and shall have the power to
establish or change the location of any branch or branches of the Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.
EIGHTH: The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH: The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than 25 percent of the stock of
this Association, may call a special meeting of shareholders at any time.
Unless otherwise provided by the laws of the United States, a notice of the
time, place and purpose of every annual and special meeting of the shareholders
shall be given by first class mail, postage prepaid, mailed at least ten days
prior to the date of such meeting to each shareholder of record at his address
as shown upon the books of this Association.
TENTH: No director of this Association shall be liable to this
Association or its
<PAGE> 7
shareholders for monetary damages for an act or omission in the director's
capacity as a director, except for liability for (i) a breach of a director's
duty of loyalty to this Association or its shareholders, (ii) an act or
omission not in good faith or that involves intentional misconduct or a knowing
violation of the law, (iii) a transaction from which a director received an
improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office, (iv) an act or omission for which
the liability of a director is expressly provided for by statute, or (v) an act
related to an unlawful stock repurchase or payment of a dividend. If the Texas
Business Corporation Act, the Texas Miscellaneous Corporation Laws Act or other
applicable state or federal banking law or regulation is amended after approval
by the shareholders of this article to authorize corporate action further
eliminating or limiting the liability of directors, then the liability of a
director of this Association shall be eliminated or limited to the fullest
extent permitted by the Texas Business Corporation Act, the Texas Miscellaneous
Corporation Laws Act or other applicable state law or Federal banking law or
regulation as so amended or enacted.
Any repeal or modification of the foregoing paragraph by the shareholders shall
not adversely affect any right or protection of a director existing at the time
of such repeal or modification.
ELEVENTH: These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.
<PAGE> 8
EXHIBIT 2
<PAGE> 9
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
SECRETARY'S CERTIFICATE
I, Susan E. Gross, hereby certify that I am an Assistant Secretary of Texas
Commerce Bank National Association (the "Bank") and in such capacity am
generally familiar with the Bank's corporate records and that:
1. The Bank is a national banking association duly and validly
existing under the laws of the United States of America, is duly
authorized to transact business as a national banking association
and is authorized to act in all fiduciary capacities pursuant to 12
U.S.C. 92a. The charter number of the Bank is 10225.
2. On September 15, 1993, the Bank purchased the stock of Ameritrust
Texas National Association, charter number 21665. Effective
September 15, 1993, the name of Ameritrust Texas National
Association was changed to Texas Commerce Trust Company, National
Association. Attached hereto as Exhibit A is a true and correct
copy of a letter from the Office of the Comptroller of the Currency
("OCC") evidencing such change of name.
3. Effective December 17, 1993, Texas Commerce Trust Company, National
Association was merged with and into the Bank. Attached hereto as
Exhibit B is a true and correct copy of a letter of OCC officially
certifying to such merger.
4. Attached hereto as Exhibit C is a true and correct of the Articles
of Association of the Bank in effect as of the date set forth
below.
IN WITNESS WHEREOF, the undersigned has executed this certificate this 14th day
of February, 1994, at Dallas, Texas.
Texas Commerce Bank National Association
By: /s/ SUSAN E. GROSS
Susan E. Gross
Assistant Secretary
<PAGE> 10
EXHIBIT "A"
(LOGO)
Comptroller of the Currency
Administrator of National Banks
Southwestern District Office
1600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3394
September 22, 1993
Annette L. Tripp
Texas Commerce Trust Company, N. A.
3400 Texas Commerce Tower
Houston, Texas 77002-3004
Re: Change in Corporate Title
Application Control No. 93-SW-04-012
Dear Ms. Tripp:
The Office of the Comptroller of the Currency (OCC) has received your letter
concerning the title change and the appropriate amendment to the articles of
association. The OCC has recorded that as of September 15, 1993, the title of
Ameritrust Texas National Association, charter number 21665, was changed to
Texas Commerce Trust Company, National Association.
As a result of the Garn-St Germain Depository Institutions Act of 1982, the OCC
is no longer responsible for the approval of national bank name changes or does
it maintain official records on the use of alternate titles. The use of other
titles or the retention of the rights to any previously used title is the
responsibility of the bank's board of directors. Legal counsel should be
consulted to determine whether or not the new title, or any previously used
title, could be challenged by competing institutions under the provisions of
federal or state law.
Should you have any questions concerning this matter, please contact Gladys
Langston, at (214) 720-7052.
Sincerely,
/s/ EDWARD M. GRAVES
Edward M. Graves
Director for Analysis
<PAGE> 11
EXHIBIT "B"
(LOGO)
Comptroller of the Currency
Administrator of National Banks
Southwestern District Office
1600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3394
December 21, 1993
Paul W. Bishop
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3400 Texas Commerce Tower
Houston, Texas 77002
Re: Application to merge Texas Commerce Trust Company, N.A. with
and into Texas Commerce Bank National Association
Application Control #93-SW-02-071
Dear Mr. Bishop:
This letter is the official certification of the Office of the Comptroller of
the Currency (OCC) to merge Texas Commerce Trust Company, N.A. with and into
Texas Commerce Bank National Association, Houston, Texas, effective as of
December 17, 1993. The resulting bank title is Texas Commerce Bank National
Association and the charter number 10225.
Sincerely,
/s/ EDWARD M. GRAVES
Edward M. Graves
Director for compliance and Analysis
<PAGE> 12
EXHIBIT 3
<PAGE> 13
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
SECRETARY'S CERTIFICATE
I, Susan E. Gross, Assistant Secretary of Texas Commerce Bank National
Association (the "Bank") hereby certify that on January 12, 1994, at a meeting
duly called and convened and at which a quorum was present, the Board of
Directors of the Bank adopted the resolutions set forth below, and such
resolutions are presently in full force and effect and have not been modified,
revoked or rescinded:
RESOLVED, that for the purposes of the following resolutions, the following
words shall have the meaning ascribed to them as follows:
"Bank" shall mean Texas Commerce Bank National Association.
"Trust Officer" shall mean any Corporate Trust Officer, any Real Estate Trust
Officer, any Petroleum Trust Officer, any Personal Trust Officer, and any Trust
Officer of the Bank.
"Senior Officer" shall mean the Chairman of the Board, the President, any Vice
Chairman, any Executive Vice President, any Senior Vice President, any Vice
President, the General Counsel, the Secretary, the Treasurer and the Cashier of
the Bank, and any Chairman, any Vice Chairman, any Executive Vice President,
any Senior Vice President and any Vice President of any region of the Bank.
"Senior Trust Officer" shall mean any Senior Corporate Trust Officer, any
Senior Real Estate Trust Officer, any Senior Petroleum Trust Officer, any
Senior Personal Trust Officer, and any Senior Trust Officer of the Bank.
RESOLVED, that the Chairman of the Board, the President, any Vice Chairman, any
Executive Vice President and Trust Officer, any Senior Vice President and Trust
Officer, any Vice President and Trust Officer, any Assistant Vice President and
Trust Officer, any Senior Trust Officer, and any Trust Officer of the Bank, and
any Chairman, President, Vice Chairman, Executive Vice President and Trust
Officer, Senior Vice President and Trust Officer, Vice President and Trust
Officer, Assistant Vice President and Trust Officer, Senior Trust Officer, or
Trust Officer of any region of the Bank be, and each of them hereby is,
authorized to execute and deliver for and on behalf of the Bank agreements
(including, but not limited to, agency agreements, transfer agency agreements,
paying agency agreements, exchange agreements, escrow agreements and other
similar agreements), indentures, mortgages, deeds, releases, conveyances,
assignments, transfers, leases, demands, proofs of debt, claims, discharges,
satisfactions, settlements, petitions, affidavits, receipts, instruments or
documents, powers of attorney, records, bonds, undertakings, proxies, other
agency powers, authentication certificates appearing on bonds and debentures,
registration certificates appearing on stock, bond or debentures certificates
and such other documents and instruments, other than secretary's certificates
or officer's certificates, as may be necessary and appropriate to carry out the
fiduciary or agency powers of the Bank.
<PAGE> 14
RESOLVED, that the Senior Officers, the Chief Financial Officer, the Chief
Administrative Officer, the Secretary, any Assistant Secretary, any Assistant
Vice President, any Senior Trust Officer, any Trust Officer, and any Assistant
Trust Officer of the Bank, and any Executive Vice President and Trust Officer,
Senior Vice President and Trust Officer, Vice President and Trust Officer,
Assistant Vice President and Trust Officer, Senior Trust Officer and Trust
Officer of any region of the Bank be, and each of them hereby is, authorized to
countersign, acknowledge or verify accounts, schedules, requisitions,
certifications and declarations, other than secretary's certificates or
officer's certificates, in connection with the exercise of the fiduciary or
agency powers of the Bank.
RESOLVED, that the power and authority conferred to any person pursuant to
these resolutions shall include, but not be limited to, the power to execute
any other documents and to do and perform such other acts and things as may be
necessary or appropriate to consummate the transactions so authorized or to
carry out the purposes and intent of such resolutions.
I also certify the Stephen Shrull is a duly elected and acting TCB-Metroplex -
Trust Officer of the bank.
EXECUTED effective as of the 14th day of February, 1994, at Dallas, Texas.
Texas Commerce Bank National Association
By: /s/ SUSAN E. GROSS
Susan E. Gross
Assistant Secretary
<PAGE> 15
EXHIBIT 4
<PAGE> 16
BYLAWS OF
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
__________
SECTION 1: MEETINGS OF SHAREHOLDERS
SECTION 1.1. ANNUAL MEETINGS. The annual meeting of the
shareholders of the Association for the election of directors and for the
transaction of such other business as properly may come before such meeting,
shall be held at the principal banking office of the Association in Houston,
Texas, or such other place authorized by the Board of Directors ("Board"), at
10:30 a.m. on the Wednesday before the third Tuesday in January or as soon
thereafter as practicable if, for any reason, the meeting cannot be held at
such time or on such date. The Chairman of the Board (hereinafter "Chairman")
and the Secretary of the Association shall act as Chairman and Secretary,
respectively, of the meeting.
SECTION 1.2. SPECIAL MEETINGS. Special meetings of the shareholders
of the Association may be called by the Chairman or upon the direction of a
majority of the Board.
SECTION 1.3. NOTICE. Unless otherwise provided by law or by the
Articles of Association, a notice of the time, place and purpose of every
annual and special meeting of the shareholders shall be given by first class
mail, postage prepaid, mailed at least ten days prior to the date of such
meeting to each shareholder of record at the shareholder's address as shown on
the books of the Association.
SECTION 1.4. PROXIES. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of the Association shall act as proxy. Proxies shall be valid only for the
meeting specified therein and any adjournments thereof.
SECTION 1.5. VOTING RIGHTS. Except as otherwise provided by law or
these Bylaws, each shareholder shall be entitled to one vote for each share of
stock held, and a majority of votes cast shall decide each matter submitted for
a vote.
SECTION 1.6 RECORD DATE. The record date for determining those
shareholders who shall have the right to receive notice of and to vote at
meetings of shareholders shall be set by the Board or, if the Board fails to
set such date, by the Chairman. The record date shall be not less than ten and
not more than fifty days prior to the date of the meeting.
Page 1 of 6
<PAGE> 17
SECTION 2: DIRECTORS
SECTION 2.1. NUMBER. Unless applicable law shall permit a greater
number, the Board of the Association shall consist of such persons, not less
than five nor more than twenty-five, as from time to time shall be fixed and
determined by a majority of the full Board or by resolution of a majority of
the outstanding shares of stock of the Association at the annual or any special
meeting of the shareholders.
SECTION 2.2. TERM. The directors of the Association shall hold
office until the annual meeting of shareholders next following their election
and until their successors have been elected and qualified unless removed
according to the provisions of the Articles of Association or these Bylaws.
SECTION 2.3. VACANCIES. Any vacancies occurring in the Board for
any reason may, subject to the provisions of Section 2.1. hereof, be filled by
a vote of a majority of the remaining directors, and any director so appointed
shall hold office until the next annual meeting of shareholders or until a
successor is elected.
SECTION 2.4. ANNUAL MEETINGS. Following the annual meeting of the
shareholders, the Chairman or the Secretary of the meeting shall notify the
directors-elect of their election, and they shall meet promptly for the
purposes of electing officers of the Association for the ensuing year and for
the transaction of such organizational and other business as properly may come
before the meeting.
SECTION 2.5. REGULAR MEETINGS. Regular meetings of the Board shall
be held without notice at 10:30 a.m. on the Wednesday before the third Tuesday
of each January, April, July and October. Regular meetings of the Board also
shall be held each June and December on such date and at such time as the
Chairman may prescribe, with notice of such meetings to be given to each member
of the Board by telegram, letter, telephone, telecopy or in person. Such
meetings shall be held at the principal office of the Association. If any
regular meeting of the Board shall fall upon a holiday, the meeting shall be
held at the time and place specified in this Section on the next banking
business day unless some other date shall be designated by a majority of the
Board. A special meeting may be held in lieu of a regular meeting in any given
calendar month.
SECTION 2.6. SPECIAL MEETINGS. Special meetings of the Board may be
called either by the Chairman, or in his absence, by the President, or in his
absence, by any of the Vice Chairmen of the Board, or at the request of three
or more directors. Each member of the Board shall be given notice by telegram,
letter, telephone, telecopy or in person stating the time, place and purpose of
each such meeting.
SECTION 2.7. QUORUM. For the transaction of business, a quorum of
the Board shall consist of not less than a majority of the entire Board then in
office. If, at the time fixed for any meeting, a quorum is not present, the
directors in attendance may adjourn the meeting from time to time until a
quorum is obtained. The majority of those directors present and voting at any
meeting of the Board shall decide each matter considered.
Page 2 of 6
<PAGE> 18
SECTION 2.8. ADVISORY DIRECTORS. The Board may appoint such
advisory directors as it may deem appropriate, each of whom shall hold office
until the next annual meeting of the directors following their elections. The
advisory directors of the Association shall have the right to attend the
meetings of the Board held each January, April, July and October and to advise
with the Board concerning the affairs of the Association, but advisory
directors shall not have the right to vote.
SECTION 2.9. RETIREMENT OF DIRECTORS. No person shall be elected
to serve as a director or an advisory director of the Association who has
attained 68 years of age at the time of such election except in accordance with
this Section. Notwithstanding the foregoing, any director or advisory director
of the Association who, at the time of the adoption of these Bylaws, is not
eligible under the foregoing provision to be elected to such office may be
elected to serve in such capacity for one additional term. Any director or
advisory director of the Association who, during his or her term of office,
ceases to be eligible under the foregoing provision to be elected to such
office may continue to serve the remainder of his or her term of office until
the next annual meeting of shareholders.
SECTION 3: OFFICERS
SECTION 3.1. CHAIRMAN. There shall be a Chairman, as designated by
the Board. The Chairman shall preside at all meetings of the Board. The
Chairman shall preside at all meetings of the Loan and Discount Committee at
which the Chairman is present, unless the Chairman shall elect to delegate this
duty and responsibility to another officer. The Chairman shall have
supervision over and exercise general executive and administrative powers
relating to all of the operations and business of the Association. The
Chairman shall from time to time assign all officers of this Association their
respective powers, duties and responsibilities and shall have and exercise such
other powers and duties as from time to time may be conferred upon the Chairman
or assigned to the Chairman of the Board.
SECTION 3.2. PRESIDENT. The President shall be a member of the
Board. The President shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice to the office of president or
imposed by these Bylaws. The President shall perform such executive and
administrative duties as may be assigned to the President by the Board, and in
the case of the absence or inability of the Chairman to act, the President
shall perform the duties of the Chairman during such absence or inability.
SECTION 3.3. VICE CHAIRMAN. The Board may appoint one or more of
its directors as Vice Chairmen. During the absence of the Chairman and the
President, the Vice Chairmen, in the order of their seniority as Vice Chairmen,
shall preside at the meetings of the Board. Each Vice Chairman shall perform
such executive and administrative duties as may be assigned to such Vice
Chairman by the Chairman.
Page 3 of 6
<PAGE> 19
SECTION 3.4. EXECUTIVE TRUST OFFICER. There shall be an Executive
Trust Officer of the Association, appointed by the Board, whose duties shall be
to manage, supervise and direct all of the activities of the Trust Department.
The Board may appoint other trust officers as it may deem appropriate with such
duties as may be designated by the Board or by the Executive Trust Officer.
SECTION 3.5. SECRETARY AND ASSISTANT SECRETARIES. The Board shall
appoint a Secretary, or other designated officer, who shall be secretary of the
Board and of the Association and shall keep accurate minutes of all meetings.
The Secretary shall attend to the giving of all notices required by these
Bylaws; shall be custodian of the corporate seal, records, documents and papers
of the Association; shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the office of secretary or
cashier, or imposed by these Bylaws; and also shall perform such duties as may
be assigned from time to time by the Board or the Chairman. The Board may
appoint one or more Assistant Secretaries and/or a Cashier, and each of the
Assistant Secretaries and Cashier so appointed shall have the same authority
provided by these Bylaws to the Secretary and such other duties as may be
assigned by the Board or the Chairman.
SECTION 3.6. OTHER OFFICERS. The Board may appoint one or more
Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice
Presidents, and such other officers with such titles as may from time to time
be deemed appropriate for the transaction of the business of the Association.
Each such officer shall have such duties as from time to time may be assigned
to such officer by the Chairman.
SECTION 3.7. TERM OF OFFICE. The Chairman, the Vice Chairmen and
the President shall hold their offices for the current year for which the
Board, of which they are members or advisory members, was elected unless they
shall resign, become disqualified or be removed. Such officers may be removed
by the Board with or without cause. Any vacancy occurring in such offices
shall be filled by the Board. All other persons shall hold the offices to
which they are elected subject to removal by the Chairman or by the Board.
SECTION 3.8. RECORDS OF THE ASSOCIATION. The Secretary shall be
responsible for the minute books of the Association, the organizational papers
of the Association, the Articles of Association, the returns of elections, the
Bylaws, the proceedings of regular and special meetings of the Board and of the
shareholders and the reports of the committees of the Board. The minutes of
each meeting shall be signed by either the Secretary or an Assistant Secretary
or the person acting in such capacity in the absence of the Secretary or an
Assistant Secretary and approved by the officer presiding at such meeting.
Page 4 of 6
<PAGE> 20
SECTION 4: COMMITTEES
SECTION 4.1. BOARD COMMITTEES. Each year at its annual
organizational meeting and at such other times as it deems necessary, the Board
shall appoint such committees, consisting of directors and/or advisory
directors, as it deems appropriate, specifying the authority and
responsibilities of each such committee. Such committees shall include at
least an Examining and Audit Committee, a Trust Audit Committee, a Trust
Committee and a Nominating Committee and any other committee required by law.
Any advisory director appointed to a committee shall have the right to attend
meetings of the committee and to advise the committee but shall not have the
right to vote.
SECTION 4.2. MANAGEMENT COMMITTEES. Not less than annually the
Chairman shall appointment a Loan and Discount Committee and such other
management committees and subcommittees, comprised of officers and/or employees
of the Association, as the Chairman deems appropriate, and those committees
shall have such powers and responsibilities, not inconsistent with these Bylaws
or any resolution of the Board, as the Chairman may specify.
SECTION 4.3. MINUTES. Each committee shall keep minutes of its
meetings, which shall be filed with the Secretary or an Assistant Secretary.
SECTION 4.4. QUORUM. At least half of the members of a committee
shall be required to constitute a quorum for the transaction of such
committee's business unless a greater number shall be specifically required in
the case of a Board committee by resolution or in the case of a management
committee by the Chairman.
SECTION 5: STOCK
SECTION 5.1. TRANSFER OF SHARES. The capital stock of the
Association shall be transferable on the stock certificate books of the
Association, and all such transfers shall be recorded therein.
SECTION 5.2. CERTIFICATES REPRESENTING SHARES. Certificates
representing shares of capital stock of the Association shall be in the form
approved by the Board and shall be signed manually or by facsimile signature by
the Chairman, the President, any Vice Chairman, Executive Vice President or
Senior Vice President, and by the Secretary, an Assistant Secretary, or the
Cashier. In case any officer who has signed or whose facsimile signature has
been placed upon the form of certificate shall have ceased to be such officer
before such certificate is issued, such certificate may be issued with the same
effect as if the officer were such officer at the date of issuance.
Page 5 of 6
<PAGE> 21
SECTION 6: SEAL
The seal of this Association shall be in such form as may be from time to
time prescribed by the Board. Each of the Secretary, the Assistant Secretaries
and such officers of the Association as the Board may direct shall have
authority to affix the corporate seal of this Association to any document
requiring such seal and to attest the same.
SECTION 7: EXECUTION OF INSTRUMENTS
All agreements, indentures, mortgages, deeds, conveyances, transfers,
certificates, declarations, receipts, discharges, releases, satisfactions,
settlements, petitions, schedules, accounts, affidavits, bonds, checks, drafts,
undertakings, proxies and other instruments or documents may be signed,
executed, acknowledged, verified, delivered or accepted in the name of and on
behalf of the Association by such officers as the Board may from time to time
direct or, if the Board has not directed, then by such officers as the Chairman
from time to time directs. The provisions of this Section 7 are supplementary
to any other provision of these Bylaws.
SECTION 8: BANKING HOURS
Except as otherwise provided by law, the Association shall be open for
business on such days of the week and during such hours as the Chairman or his
designee may direct.
SECTION 9: INDEMNIFICATION
The Association shall indemnify and advance expenses to all directors,
advisory directors, officers, employees and agents of the Association, and to
all persons who are or were serving at the request of the Association as a
director, advisory director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another corporation, association,
partnership, joint venture, sole proprietorship, trust, employee benefit plan
or other enterprise to the maximum extent allowed by the Texas Business
Corporation Act or other applicable state law, Federal banking law and/or
regulations.
SECTION 10: AMENDMENTS TO BYLAWS
These Bylaws may be amended, altered or repealed at any meeting of the
Board by a vote of a majority of the full Board. In addition, the
Association's shareholders may repeal, alter or amend these Bylaws even though
the Bylaws also may be amended or repealed by the Board.
Page 6 of 6
<PAGE> 22
EXHIBIT 6
Texas Commerce Bank National Association, as a condition to qualification
under the Trust Indenture Act of 1939, consents that reports of examinations by
federal, state, territorial, or district authorities may be furnished by such
authorities to the Securities and Exchange Commission of the United States upon
request of said Commission for said reports, as provided in Section 321 of said
Trust Indenture Act of 1939.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: /s/ GREG DICKEY
Title: Assistant Vice President
Dated: March ___, 1994
<PAGE> 23
EXHIBIT 7
<PAGE> 24
Board of Governors of the Federal Reserve System
OMB Number 7100-0036
Federal Deposit Insurance Corporation
OMB Number 3064-0052
Office of the Comptroller of the Currency
OMB Number 1557-0081
Expires February 28, 1995
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
(1)
Please refer to page i,
(LOGO) Table of Contents, for
the required disclosure
of estimated burden.
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICE -- FFIEC 031
(931231)
REPORT AT THE CLOSE OF BUSINESS DECEMBER 31, 1993 (RCRI 9999)
This report is required by law: 12 U.S.C. Section 324 (State member banks); 12
U.S.C Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Kenneth L. Tilton, EVP & Controller
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and are
true to the best of my knowledge and belief.
/s/ KENNETH L. TILTON
Signature of Officer Authorized to Sign Report
January 27, 1994
Date of Signature
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the appropriate Federal
Reserve District Bank.
STATE NONMEMBER BANKS: Return the original only in the special return address
envelope provided. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2139 Espey Court, Crofton, MD 21114.
This report form is to be filed by bank with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions. NOTE: These instructions may in
some cases differ from generally accepted accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
Marc J. Shapiro /s/ MARC J. SHAPIRO
Director (Trustee)
Alan R. Buckwalter, III /s/ ALAN R. BUCKWALTER, III
Director (Trustee)
Robert C. Hunter /s/ ROBERT C. HUNTER
Director (Trustee)
NATIONAL BANKS: Return the original only in the special return address
envelope, provided. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2139 Espey Court, Crofton, MD 21114.
FDIC Certificate Number 03263
(RCRI 9060)
CALL NO. 186 31 12-31-93
CERT: 03263 00373 STBK 48-3926
TEXAS COMMERCE BANK NATIONAL ASSOCIA
P.O. BOX 2558
HOUSTON, TX 77252
Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency
<PAGE> 25
FFIEC 031
Page
(2)
Consolidated Reports of Condition and Income for
A Bank With Domestic and Foreign Offices
TABLE OF CONTENTS
<TABLE>
<S> <C>
SIGNATURE PAGE Cover
REPORT OF INCOME
Schedule RI -- Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . RI-1, 2, 3
Schedule RI-A -- Changes in Equity Capital . . . . . . . . . . . . . . . . . . . RI-3
Schedule RI-B -- Charge-offs and Recoveries and Changes in
Allowance for Loan and Lease Losses . . . . . . . . . . . . . . . . . . . . . RI-4, 5
Schedule RI-C -- Applicable Income Taxes by
Taxing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RI-5
Schedule RI-D -- Income from International Operation . . . . . . . . . . . . . . RI-6
Schedule RI-E -- Explanations . . . . . . . . . . . . . . . . . . . . . . . . . . RI-7, 8
REPORT OF CONDITION
Schedule RC -- Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . RC-1, 2
Schedule RC-A -- Cash and Balances Due
From Depository Institutions . . . . . . . . . . . . . . . . . . . . . . . . . RC-3
Schedule RC-B -- Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . RC-4, 5
Schedule RC-C -- Loans and Lease Financing
Receivables:
Part I. Loans and Leases . . . . . . . . . . . . . . . . . . . . . . . . . . RC-6, 7
Part II. Loans to Small Business and Small Farms (included
in the forms for June 30 only) . . . . . . . . . . . . . . . . . . . . . . RC-7a, 7b
Schedule RC-D -- Assets Held in Trading Accounts in
Domestic Offices Only (to be completed only by banks
with $1 billion or more in total assets) . . . . . . . . . . . . . . . . . . . RC-8
Schedule RC-E -- Deposit Liabilities . . . . . . . . . . . . . . . . . . . . . . RC-9, 10
Schedule RC-F -- Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . RC-11
Schedule RC-G -- Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . RC-11
Schedule RC-H -- Selected Balance Sheet Items for
Domestic Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RC-12
Schedule RC-I -- Selected Assets and Liabilities
of IBFs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RC-12
Schedule RC-K -- Quarterly Averages . . . . . . . . . . . . . . . . . . . . . . . RC-13
Schedule RC-L -- Off-Balance Sheet Items . . . . . . . . . . . . . . . . . . . . RC-14, 15
Schedule RC-M -- Memoranda . . . . . . . . . . . . . . . . . . . . . . . . . . . RC-16, 17
Schedule RC-N -- Past Due and Nonaccrual Loans,
Leases, and Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . RC-18, 19
Schedule RC-O -- Other Data for Deposit
Insurance Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . RC-19, 20
Schedule RC-R -- Risk-Based Capital . . . . . . . . . . . . . . . . . . . . . . . RC-21, 22
Optional Narrative Statement Concerning the
Amounts Reported in the Reports of
Condition and Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RC-23
Special Report (to be completed by all banks)
Schedule RC--J -- Repricing Opportunities (sent only to
and to be completed only by savings banks)
</TABLE>
Disclosure of Estimated Burden
The estimated average burden associated with this information collection is
29.2 hours per respondent and is estimated to vary from 14.6 to 150 hours per
response, depending on individual circumstances. Burden estimates include the
time for reviewing instructions, gathering and maintaing data in the requiring
form, and completing the information collection, but exclude the time
for compiling and maintaining business records in the normal course of a
respondent's activities. Comments concerning the accuracy of this burden
estimate and suggestions for reducing this burden should be directed to the
Office of Information and Regulatory Affairs Office of Management and Budget,
Washington, D.C. 20503, and to one of the following:
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429
For information or assistance, national and state nonmember banks should
contact the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington
D.C. 20249, toll free on (800) 688-FDIC (3342), Monday through Friday between
8:00 a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District Bank.
<PAGE> 26
CALL NO. 186 31 12-31-93
CERT: 03263 00373 STBK 48-3926
TEXAS COMMERCE BANK NATIONAL ASSOCIA
P.O. BOX 2558
HOUSTON, TX 77252
FDIC OMB No. 3064-0074
Expiration Date: 7/31/96
Disclosure of Estimated Burden
The estimated average burden associated with this information collection is 2.5
hours per respondent. Burden estimates include the time for reviewing
instructions and completing the information collection, but exclude the time
for compiling and maintaining business records in the normal course of a
respondent's activities. Comments concerning the accuracy of this burden
estimate and suggestions for reducing this burden should be directed to the
Office of Management and Budget. Paperwork Reduction Project 93064- 0074),
Washington, D.C. 20503, and to the Assistant Executive Secretary
(Administration), Room F-400. Federal Deposit Insurance Corporation,
Washington, D.C. 20429.
Advance notification of planned rapid growth is required by Section 304.6 of
the Federal Deposit Insurance Corporation's Rules and Regulations (12 C.F.R.
304.6). Notices received will be treated as confidential by the FDIC.
NOTIFICATION OF PLANNED RAPID GROWTH
Does your bank intend to undertake any special funding plan or
arrangement (as defined below) designed to increase its assets by more
than 7.5 percent during the next three months?
YES / / If "YES is Marked:
File the completed notification form with the
appropriate FDIC Regional Director for
Supervision. A listing of FDIC Regional
Directors appears on the reverse side of this
form National banks should also file a copy
of this notification form with the
appropriate District Deputy Comptroller.
State member banks should also file a copy of
this notification form with the appropriate
Federal Reserve District Bank. Do not submit
this notification form with your completed
Reports of condition and income (Call
Reports).
NO /X/ If "NO" is marked:
Do not file this notification form with any
federal bank regulatory agency. The
notification form should be retained in your
bank's records and be available for examiner
inspection.
DEFINITION
A "special funding plan or arrangement" is any effort to increase the assets of
a bank through (a) the solicitation and acceptance of fully insured deposits
obtained from or through the mediation of brokers or affiliates, (b) the
solicitation of fully insured deposits outside your bank's normal trade area,
or (c) secured borrowings, including repurchase agreements.
Your bank may not implement any special funding plan or arrangement for 30 days
following the date on which your notification is mailed or placed in some other
delivery system for transmission to the appropriate FDIC Regional Director.
________________________________________
Question concerning the FDIC's rapid growth notification requirement should be
directed to your bank's primary federal bank regulatory agency.
/s/ KENNETH L. TILTON January 27, 1994
Signature of Authorized Officer Date
Kenneth L. Tilton, EVP & Controller (713) 216-5263
Name and Title of Authorized Officer Area Code/Telephone Number
FDIC 6331/01 (12-93)
<PAGE> 27
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-1
HOUSTON, TX 77252 (3)
FDIC CERTIFICATE NUMBER: 03263
CONSOLIDATED REPORT OF INCOME FOR THE PERIOD:
January 1, 1993 - December 31, 1993
ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE
BASIS IN THOUSANDS OF DOLLARS.
<TABLE>
<CAPTION>
|------------|
SCHEDULE RI-INCOME STATEMENT | I480 | <---
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD BIL Mil Thou |
- --------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. INTEREST INCOME: |//////////////////|
a. INTEREST AND FEE INCOME ON LOANS: |//////////////////|
(1) IN DOMESTIC OFFICES: |//////////////////|
(a) LOANS SECURED BY REAL ESTATE..............................................|4011 194,705 | 1.a.(1)(a)
(b) LOANS TO DEPOSITORY INSTITUTIONS..........................................|4019 530 | 1.a.(1)(b)
(c) LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER LOANS |//////////////////|
TO FARMERS................................................................|4024 4,140 | 1.a.(1)(c)
(d) COMMERCIAL AND INDUSTRIAL LOANS...........................................|4012 203,569 | 1.a.(1)(d)
(e) ACCEPTANCES OF OTHER BANKS................................................|4026 16 | 1.a.(1)(e)
(f) LOANS TO INDIVIDUALS FOR HOUSEHOLD, FAMILY, AND |//////////////////|
OTHER PERSONAL EXPENDITURES: |//////////////////|
(1) CREDIT CARDS AND RELATED PLANS.........................................|4054 9,818 | 1.a.(1)(f)(1)
(2) OTHER..................................................................|4055 91,267 | 1.a.(1)(f)(2)
(g) LOANS TO FOREIGN GOVERNMENTS AND OFFICIAL INSTITUTIONS....................|4056 18,578 | 1.a.(1)(g)
(h) OBLIGATIONS (OTHER THAN SECURITIES AND LEASES) OF STATES |//////////////////|
AND POLITICAL SUBDIVISIONS IN THE U.S.: |//////////////////|
(1) TAXABLE OBLIGATIONS....................................................|4503 0 | 1.a.(1)(h)(1)
(2) TAX-EXEMPT OBLIGATIONS.................................................|4504 24,527 | 1.a.(1)(h)(2)
(I) ALL OTHER LOANS IN DOMESTIC OFFICES.......................................|4058 105,705 | 1.a.(1)(i)
(2) IN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFS................|4059 14,864 | 1.a.(2)
b. INCOME FROM LEASE FINANCING RECEIVABLES: |//////////////////|
(1) TAXABLE LEASES...............................................................|4505 17,691 | 1.b.(1)
(2) TAX-EXEMPT LEASES............................................................|4307 0 | 1.b.(2)
c. INTEREST INCOME ON BALANCES DUE FROM DEPOSITORY INSTITUTIONS:(1) |//////////////////|
(1) IN DOMESTIC OFFICES..........................................................|4105 48 | 1.c.(1)
(2) IN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFs................|4106 314 | 1.c.(2)
d. INTEREST AND DIVIDEND INCOME ON SECURITIES: |//////////////////|
(1) U.S. TREASURY SECURITIES AND U.S. GOVERNMENT AGENCY AND |//////////////////|
CORPORATION OBLIGATIONS......................................................|4027 158,890 | 1.d.(1)
(2) SECURITIES ISSUED BY STATES AND POLITICAL SUBDIVISIONS |//////////////////|
IN THE U.S.: |//////////////////|
(a) TAXABLE SECURITIES........................................................|4506 3 | 1.d.(2)(a)
(b) TAX-EXEMPT SECURITIES.....................................................|4507 121 | 1.d.(2)(b)
(3) OTHER DOMESTIC DEBT SECURITIES ..............................................|3657 25,940 | 1.d.(3)
(4) FOREIGN DEBT SECURITIES .....................................................|3658 46 | 1.d.(4)
(5) EQUITY SECURITIES (INCLUDING INVESTMENTS IN MUTUAL FUNDS)....................|3659 2,664 | 1.d.(5)
e. INTEREST INCOME FROM ASSETS HELD IN TRADING ACCOUNTS............................|4069 2,530 | 1.e.
|------------------|
</TABLE>
- ---------------
(1) INCLUDES INTEREST INCOME ON TIME CERTIFICATES OF DEPOSIT NOT HELD IN
TRADING ACCOUNTS.
<PAGE> 28
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-2
HOUSTON, TX 77252 (4)
SCHEDULE RI-CONTINUED
<TABLE>
<CAPTION>
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou |
- -----------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. INTEREST INCOME (CONTINUED) |//////////////////|
f. INTEREST INCOME ON FEDERAL FUNDS SOLD AND SECURITIES PURCHASED |//////////////////|
UNDER AGREEMENTS TO RESELL IN DOMESTIC OFFICES OF THE BANK AND OF |//////////////////|
ITS EDGE AND AGREEMENT SUBSIDIARIES, AND IN IBFs.......................|4020 148,610 | 1.f.
g. TOTAL INTEREST INCOME (SUM OF ITEMS 1.a. THROUGH 1.f.).................|4107 1,024,576 | 1.g.
2. INTEREST EXPENSE: |//////////////////|
a. INTEREST ON DEPOSITS: |//////////////////|
(1) INTEREST ON DEPOSITS IN DOMESTIC OFFICES: |//////////////////|
(a) TRANSACTION ACCOUNTS (NOW ACCOUNTS, ATS ACCOUNTS, AND |//////////////////|
TELEPHONE AND PREAUTHORIZED TRANSFER ACCOUNTS)...................|4508 32,262 | 2.a.(1)(a)
(b) NONTRANSACTION ACCOUNTS: |//////////////////|
(1) MONEY MARKET DEPOSIT ACCOUNTS (MMDAs).........................|4509 29,942 | 2.a.(1)(b)(1)
(2) OTHER SAVINGS DEPOSITS........................................|4511 65,154 | 2.a.(1)(b)(2)
(3) TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE..............|4174 28,824 | 2.a.(1)(b)(3)
(4) ALL OTHER TIME DEPOSITS.......................................|4512 95,383 | 2.a.(1)(b)(4)
(2) INTEREST ON DEPOSITS IN FOREIGN OFFICES, EDGE AND AGREEMENT |//////////////////|
SUBSIDIARIES, AND IBFs..............................................|4172 10,598 | 2.a.(2)
b. EXPENSE OF FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER |//////////////////|
AGREEMENTS TO REPURCHASE IN DOMESTIC OFFICES OF THE BANK AND OF |//////////////////|
ITS EDGE AND AGREEMENT SUBSIDIARIES, AND IN IBFs.......................|4180 21,666 | 2.b.
c. INTEREST ON DEMAND NOTES ISSUED TO THE U.S. TREASURY AND ON |//////////////////|
OTHER BORROWED MONEY...................................................|4185 19,337 | 2.c.
d. INTEREST ON MORTGAGE INDEBTEDNESS AND OBLIGATIONS UNDER |//////////////////|
CAPITALIZED LEASES.....................................................|4072 2,514 | 2.d.
e. INTEREST ON SUBORDINATED NOTES AND DEBENTURES .........................|4200 25,003 | 2.e.
f. TOTAL INTEREST EXPENSE (SUM OF ITEMS 2.a. THROUGH 2.e.)................|4073 330,683 | 2.f--------------------|
3. NET INTEREST INCOME (ITEM 1.g. MINUS 2.f.)...............................|//////////////////|4074 693,893 | 3.
4. PROVISIONS: |//////////////////|------------------------|
a. PROVISION FOR LOAN AND LEASE LOSSES...................................|//////////////////|4230 683 | 4.a
b. PROVISION FOR ALLOCATED TRANSFER RISK.................................|//////////////////|4243 2,290 | 4.b
5. NONINTEREST INCOME: |//////////////////|------------------------|
a. INCOME FROM FIDUCIARY ACTIVITIES......................................|4070 98,551 | 5.a
b. SERVICE CHARGES ON DEPOSIT ACCOUNTS IN DOMESTIC OFFICES...............|4080 144,548 | 5.b
c. TRADING GAINS (LOSSES) AND FEES FROM FOREIGN EXCHANGE |//////////////////|
TRANSACTIONS..........................................................|4075 10,491 | 5.c
d. OTHER FOREIGN TRANSACTION GAINS (LOSSES)..............................|4076 103 | 5.d
e. GAINS (LOSSES) AND FEES FROM ASSETS HELD IN TRADING ACCOUNTS..........|4077 13,900 | 5.e
f. OTHER NONINTEREST INCOME: |//////////////////
(1) OTHER FEE INCOME ..................................................|5407 102,440 | 5.f.(1)
(2) ALL OTHER NONINTEREST INCOME * ....................................|5408 29,099 | 5.f.(2)----------------|
g. TOTAL NONINTEREST INCOME (SUM OF 5.a. THROUGH 5.f.)...................|//////////////////|4079 399,132 | 5.g
6. GAINS (LOSSES) ON SECURITIES NOT HELD IN TRADING ACCOUNTS................|//////////////////|4091 0 | 6.
7. NONINTEREST EXPENSE: |//////////////////|------------------------|
a. SALARIES AND EMPLOYEE BENEFITS........................................|4135 342,867 | 7.a
b. EXPENSES OF PREMISES AND FIXED ASSETS (NET OF RENTAL INCOME) |//////////////////|
(EXCLUDING SALARIES AND EMPLOYEE BENEFITS AND MORTGAGE INTEREST)..... |4217 108,169 | 7.b
c. OTHER NONINTEREST EXPENSE * ...........................................|4092 361,554 | 7.c--------------------|
d. TOTAL NONINTEREST EXPENSE (SUM OF ITEMS 7.a. THROUGH 7.c.).............|//////////////////|4093 812,590 | 7.d
8. INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS AND OTHER |//////////////////|------------------------|
ADJUSTMENTS (ITEM 3 PLUS OR MINUS ITEMS 4.a., 4.b., 5.g., 6, AND 7.d.)...|//////////////////|4301 277,462 | 8.
9. APPLICABLE INCOME TAXES (ON ITEM 8)......................................|//////////////////|4302 102,291 | 9.
10. INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AND OTHER ADJUSTMENTS |//////////////////|------------------------|
(ITEM 8 MINUS ITEM 9)....................................................|//////////////////|4300 175,171 | 10.
11. EXTRAORDINARY ITEMS AND OTHER ADJUSTMENTS: |//////////////////|------------------------|
a. EXTRAORDINARY ITEMS AND OTHER ADJUSTMENTS, GROSS OF INCOME TAXES * ...|4310 14,076 | 11.a
b. APPLICABLE INCOME TAXES (ON ITEM 11.a.) * ............................|4315 (7,705)| 11.b
c. EXTRAORDINARY ITEMS AND OTHER ADJUSTMENTS, NET OF INCOME TAXES |//////////////////|------------------------|
(ITEM 11.a. MINUS 11.b.)...............................................|//////////////////|4320 21,781 | 11.c
12. NET INCOME (LOSS) (SUM OF ITEMS 10 AND 11.c.)............................|//////////////////|4340 196,952 | 12.
- --------------------- |------------------|------------------------|
</TABLE>
* DESCRIBE ON SCHEDULE RI-E-EXPLANATIONS
<PAGE> 29
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-3
HOUSTON, TX 77252 (5)
<TABLE>
<CAPTION>
SCHEDULE RI-CONTINUED
|------------|
|Year-to-date|
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou |
- -------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
MEMORANDA |//////////////////|
1. INTEREST EXPENSE INCURRED TO CARRY TAX-EXEMPT SECURITIES, LOANS, AND LEASES |//////////////////|
ACQUIRED AFTER AUGUST 7, 1986, THAT IS NOT DEDUCTIBLE FOR FEDERAL INCOME TAX |//////////////////|
PURPOSES..........................................................................|4513 600 | M.1.
2. NOT APPLICABLE................................................................. |//////////////////|
3. ESTIMATED FOREIGN TAX CREDIT INCLUDED IN APPLICABLE INCOME TAXES, |//////////////////|
ITEMS 9 AND 11.B ABOVE............................................................|4309 0 | M.3.
4. TO BE COMPLETED ONLY BY BANKS WITH $1 BILLION OR MORE IN TOTAL ASSETS: |//////////////////|
TAXABLE EQUIVALENT ADJUSTMENT TO "INCOME (LOSS) BEFORE INCOME TAXES AND |//////////////////|
EXTRAORDINARY ITEMS AND OTHER ADJUSTMENTS" (ITEM 8 ABOVE).........................|1244 0 | M.4.
5. NUMBER OF FULL-TIME EQUIVALENT EMPLOYEES ON PAYROLL AT END OF CURRENT PERIOD |//////////////////|
(ROUND TO NEAREST WHOLE NUMBER)...................................................|4150 9,355 | M.5.
|------------------|
</TABLE>
SCHEDULE RI-A - CHANGES IN EQUITY CAPITAL
INDICATE DECREASES AND LOSSES IN PARENTHESES.
<TABLE>
<CAPTION>
|------------|
| I483 | <---
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou |
- -------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. TOTAL EQUITY CAPITAL ORIGINALLY REPORTED IN THE DECEMBER 31, 1992, REPORTS OF |//////////////////|
CONDITION AND INCOME.............................................................|3215 715,012 | 1.
2. EQUITY CAPITAL ADJUSTMENTS FROM AMENDED REPORT OF INCOME, NET * .................|3216 0 | 2.
3. AMENDED BALANCE END OF PREVIOUS CALENDAR YEAR (SUM OF ITEMS 1 AND 2).............|3217 715,012 | 3.
4. NET INCOME (LOSS) (MUST EQUAL SCHEDULE RI, ITEM 12)..............................|4340 196,952 | 4.
5. SALE, CONVERSION, ACQUISITION, OR RETIREMENT OF CAPITAL STOCK, NET...............|4346 397,726 | 5.
6. CHANGES INCIDENT TO BUSINESS COMBINATIONS, NET...................................|4356 426,829 | 6.
7. LESS: CASH DIVIDENDS DECLARED ON PREFERRED STOCK................................|4470 0 | 7.
8. LESS: CASH DIVIDENDS DECLARED ON COMMON STOCK...................................|4460 185,000 | 8.
9. CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES FROM PRIOR YEARS * |//////////////////|
(SEE INSTRUCTIONS FOR THIS SCHEDULE) .............................................|4411 0 | 9.
10. CORRECTIONS OF MATERIAL ACCOUNTING ERRORS FROM PRIOR YEARS * |//////////////////|
(SEE INSTRUCTIONS FOR THIS SCHEDULE) .............................................|4412 0 | 10.
11. CHANGE IN NET UNREALIZED LOSS ON MARKETABLE EQUITY SECURITIES....................|4413 46,990 | 11.
12. FOREIGN CURRENCY TRANSLATION ADJUSTMENTS.........................................|4414 0 | 12.
13. OTHER TRANSACTIONS WITH PARENT HOLDING COMPANY * |//////////////////|
(NOT INCLUDED IN ITEM 5, 7, OR 8 ABOVE)..........................................|4415 96,274 | 13.
14. TOTAL EQUITY CAPITAL END OF CURRENT PERIOD (SUM OF ITEMS 3 THROUGH 13) |//////////////////|
(MUST EQUAL SCHEDULE RC, ITEM 28)................................................|3210 1,694,783 | 14.
|------------------|
- ---------------------
</TABLE>
* DESCRIBE ON SCHEDULE RI-E-EXPLANATIONS
<PAGE> 30
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-4
HOUSTON, TX 77252 (6)
<TABLE>
<CAPTION>
|------------|
SCHEDULE RI-B - CHARGE-OFFS AND RECOVERIES AND CHANGES IN ALLOWANCE | I486 | <--
FOR LOAN AND LEASE LOSSES |-----------------------------------|
PART I. CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES | (Column A) | (Column B) |
| Charge-offs | Recoveries |
PART I EXCLUDES CHARGE-OFFS AND RECOVERIES THROUGH THE |-----------------|-----------------|
ALLOCATED TRANSFER RISK RESERVE. | CALENDAR YEAR-TO-DATE |
|-----------------|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou|RIAD Bil Mil Thou|
- --------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
1. LOANS SECURED BY REAL ESTATE: |/////////////////|/////////////////|
a. TO U.S. ADDRESSEES (DOMICILE).............................................|4651 12,555 |4661 4,116 | 1.a.
b. TO NON-U.S. ADDRESSEES (DOMICILE).........................................|4652 0 |4662 0 | 1.b.
2. LOANS TO DEPOSITORY INSTITUTIONS AND ACCEPTANCES OF OTHER BANKS: |/////////////////|/////////////////|
a. TO U.S. BANKS AND OTHER U.S. DEPOSITORY INSTITUTIONS......................|4653 0 |4663 0 | 2.a.
b. TO FOREIGN BANKS..........................................................|4654 3,058 |4664 0 | 2.b.
3. LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER LOANS TO FARMERS..........|4655 0 |4665 0 | 3.
4. COMMERCIAL AND INDUSTRIAL LOANS: |/////////////////|/////////////////|
a. TO U.S. ADDRESSEES (DOMICILE).............................................|4645 19,966 |4617 7,930 | 4.a.
b. TO NON-U.S. ADDRESSEES (DOMICILE).........................................|4646 0 |4618 0 | 4.b.
5. LOANS TO INDIVIDUALS FOR HOUSEHOLD, FAMILY, AND OTHER PERSONAL |/////////////////|/////////////////|
EXPENDITURES: |/////////////////|/////////////////|
a. CREDIT CARDS AND RELATED PLANS............................................|4656 1,060 |4666 281 | 5.a.
b. OTHER (INCLUDES SINGLE PAYMENT, INSTALLMENT, AND ALL STUDENT LOANS).......|4657 8,095 |4667 1,843 | 5.b.
6. LOANS TO FOREIGN GOVERNMENTS AND OFFICIAL INSTITUTIONS.......................|4643 9,124 |4627 6,578 | 6.
7. ALL OTHER LOANS..............................................................|4644 1,155 |4628 492 | 7.
8. LEASE FINANCING RECEIVABLES: |/////////////////|/////////////////|
a. OF U.S. ADDRESSEES (DOMICILE).............................................|4658 0 |4668 0 | 8.a.
b. OF NON-U.S. ADDRESSEES (DOMICILE).........................................|4659 2,020 |4669 0 | 8.b.
9. TOTAL (SUM OF ITEMS 1 THROUGH 8).............................................|4635 57,033 |4605 21,240 | 9.
|-----------------------------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------------------------------|
| Cumulative | Cumulative |
| Charge-Offs | Recoveries |
| Jan. 1, 1986 | Jan. 1, 1986 |
MEMORANDUM | through | through |
| Dec. 31, 1989 | Report Date |
DOLLAR AMOUNTS IN THOUSANDS |-----------------|-----------------|
- --------------------------------------------------------------------------------| Bil Mil Thou| Bil Mil Thou|
<S> <C> <C> <C>
TO BE COMPLETED BY NATIONAL BANKS ONLY |/////////////////|/////////////////|
1. CHARGE-OFFS AND RECOVERIES OF SPECIAL-CATEGORY LOANS, AS DEFINED FOR THIS |/////////////////|/////////////////|
CALL REPORT BY THE COMPTROLLER OF THE CURRENCY...............................|/////////////////|4784 13,355 | M.1.
|-----------------|-----------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------------------------------|
| (Column A) | (Column B) |
| Charge-offs | Recoveries |
|-----------------|-----------------|
| CALENDAR YEAR-TO-DATE |
MEMORANDUM ITEMS 2 AND 3 ARE TO BE COMPLETED BY ALL BANKS. |-----------------|-----------------|
|RIAD Bil Mil Thou|RIAD Bil Mil Thou|
<S> <C> <C> <C>
2. LOANS TO FINANCE COMMERCIAL REAL ESTATE, CONSTRUCTION, AND LAND DEVELOPMENT |-----------------|-----------------|
ACTIVITIES (NOT SECURED BY REAL ESTATE) INCLUDED IN SCHEDULE RI-B, |/////////////////|/////////////////|
PART I, ITEMS 4 AND 7, ABOVE.................................................|5409 12 |5410 340 | M.2.
3. LOANS SECURED BY REAL ESTATE IN DOMESTIC OFFICES (INCLUDED IN SCHEDULE |/////////////////|/////////////////|
RI-B, PART I, ITEM 1, ABOVE): |/////////////////|/////////////////|
a. CONSTRUCTION AND LAND DEVELOPMENT.........................................|3582 2,329 |3583 1,705 | M.3.a.
b. SECURED BY FARMLAND.......................................................|3584 0 |3585 221 | M.3.b.
c. SECURED BY 1-4 FAMILY RESIDENTIAL PROPERTIES: |/////////////////|/////////////////|
(1) REVOLVING, OPEN-END LOANS SECURED BY 1-4 FAMILY RESIDENTIAL |/////////////////|/////////////////|
PROPERTIES AND EXTENDED UNDER LINES OF CREDIT.............................|5411 0 |5412 0 | M.3.c.(1)
(2) ALL OTHER LOANS SECURED BY 1-4 FAMILY RESIDENTIAL PROPERTIES..........|5413 1,568 |5414 619 | M.3.c.(1)
d. SECURED BY MULTIFAMILY (5 OR MORE) RESIDENTIAL PROPERTIES.................|3588 0 |3589 196 | M.3.d.
e. SECURED BY NONFARM NONRESIDENTIAL PROPERTIES..............................|3590 8,658 |3591 1,375 | M.3.e.
|-----------------|-----------------|
</TABLE>
<PAGE> 31
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-5
HOUSTON, TX 77252 (7)
FDIC CERTIFICATE NUMBER: 03263
<TABLE>
<CAPTION>
SCHEDULE RI-B -- CONTINUED |-----------------------------------|
| (Column A) | (Column B) |
PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES | Allowance For | Allocated |
AND IN ALLOCATED TRANSFER RISK RESERVE | Loan and Lease | Transfer Risk |
| Losses | Reserve |
|-----------------|-----------------|
DOLLAR AMOUNTS IN THOUSANDS | Bil Mil Thou| Bil Mil Thou|
- --------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
1. BALANCE ORIGINALLY REPORTED IN DECEMBER 31, 1992, REPORTS OF |/////////////////|/////////////////|
CONDITION AND INCOME ........................................................|3124 205,018 |3131 0 | 1.
2. RECOVERIES (COLUMN A MUST EQUAL PART I, ITEM 9, COLUMN B ABOVE)..............|4605 21,240 |3132 0 | 2.
3. LESS: CHARGE-OFFS (COLUMN A MUST EQUAL PART I, ITEM 9, COLUMN A ABOVE)......|4635 57,033 |3133 0 | 3.
4. PROVISION (COLUMN A MUST EQUAL SCHEDULE RI, ITEM 4.a.; COLUMN B |/////////////////|/////////////////|
MUST EQUAL SCHEDULE RI, ITEM 4.b.)...........................................|4230 683 |4243 2,290 | 4.
5. ADJUSTMENTS * (SEE INSTRUCTIONS FOR THIS SCHEDULE)...........................|4815 154,700 |3134 0 | 5.
6. BALANCE END OF CURRENT PERIOD (SUM OF ITEMS 1 THROUGH 5) |/////////////////|/////////////////|
(COLUMN A MUST EQUAL SCHEDULE RC, ITEM 4.b.; COLUMN B MUST EQUAL |/////////////////|/////////////////|
SCHEDULE RC, ITEM 4.c.)......................................................|3123 324,608 |3128 2,290 | 6.
- --------------------- |-----------------------------------|
</TABLE>
* DESCRIBE ON SCHEDULE RI-E-EXPLANATIONS
SCHEDULE RI-C - APPLICABLE INCOME TAXES BY TAXING AUTHORITY
<TABLE>
<CAPTION>
|------------|
SCHEDULE RI-C IS TO BE REPORTED WITH THE DECEMBER REPORT OF INCOME. | I489 | <--
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou|
- --------------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. FEDERAL........................................................................................|4780 93,194 | 1.
2. STATE AND LOCAL................................................................................|4790 1,392 | 2.
3. FOREIGN........................................................................................|4795 0 | 3.
4. TOTAL (SUM OF ITEMS 1 THROUGH 3)(MUST EQUAL SUM OF SCHEDULES RI, ITEMS 9 AND 11.b).............|4770 94,586 | 4.
5. DEFERRED PORTION OF ITEM 4.....................................................................|4772 0 | 5.
|-----------------|
</TABLE>
<PAGE> 32
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-6
HOUSTON, TX 77252 (8)
SCHEDULE RI-D - INCOME FROM INTERNATIONAL OPERATIONS
FOR ALL BANKS WITH FOREIGN OFFICES, EDGE OR AGREEMENT SUBSIDIARIES, OR IBFs
WHERE INTERNATIONAL OPERATIONS ACCOUNT FOR MORE THAN 10 PERCENT OF TOTAL
REVENUES, TOTAL ASSETS, OR NET INCOME.
<TABLE>
<CAPTION>
|------------|
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS | I492 | <---
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. INTEREST INCOME AND EXPENSE BOOKED AT FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, |//////////////////|
AND IBFs: |//////////////////|
a. INTEREST INCOME BOOKED........................................................................|4837 0 | 1.a.
b. INTEREST EXPENSE BOOKED.......................................................................|4838 0 | 1.b.
c. NET INTEREST INCOME BOOKED AT FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, |//////////////////|
AND IBFs (ITEM 1.a. MINUS 1.b.)...............................................................|4839 0 | 1.c.
2. ADJUSTMENTS FOR BOOKING LOCATION OF INTERNATIONAL OPERATIONS: |//////////////////|
a. NET INTEREST INCOME ATTRIBUTABLE TO INTERNATIONAL OPERATIONS BOOKED AT DOMESTIC OFFICES.......|4840 0 | 2.a.
b. NET INTEREST INCOME ATTRIBUTABLE TO DOMESTIC BUSINESS BOOKED AT FOREIGN OFFICES...............|4841 0 | 2.b.
c. NET BOOKING LOCATION ADJUSTMENT (ITEM 2.a. MINUS 2.b.)........................................|4842 0 | 2.c.
3. NONINTEREST INCOME AND EXPENSE ATTRIBUTABLE TO INTERNATIONAL OPERATIONS: |//////////////////|
a. NONINTEREST INCOME ATTRIBUTABLE TO INTERNATIONAL OPERATIONS...................................|4097 0 | 3.a.
b. PROVISION FOR LOAN AND LEASE LOSSES ATTRIBUTABLE TO INTERNATIONAL OPERATIONS..................|4235 0 | 3.b.
c. OTHER NONINTEREST EXPENSE ATTRIBUTABLE TO INTERNATIONAL OPERATIONS............................|4239 0 | 3.c.
d. NET NONINTEREST INCOME (EXPENSE) ATTRIBUTABLE TO INTERNATIONAL OPERATIONS (ITEM 3.A MINUS |//////////////////|
3.b. AND 3.c.)................................................................................|4843 0 | 3.d.
4. ESTIMATED PRETAX INCOME ATTRIBUTABLE TO INTERNATIONAL OPERATIONS BEFORE CAPITAL ALLOCATION |//////////////////|
ADJUSTMENT (SUM OF ITEMS 1.c, 2.c, AND 3.d)......................................................|4844 0 | 4.
5. ADJUSTMENT TO PRETAX INCOME FOR INTERNAL ALLOCATIONS TO INTERNATIONAL OPERATIONS TO REFLECT THE |//////////////////|
EFFECTS OF EQUITY CAPITAL ON OVERALL BANK FUNDING COSTS..........................................|4845 0 | 5.
6. ESTIMATED PRETAX INCOME ATTRIBUTABLE TO INTERNATIONAL OPERATIONS AFTER CAPITAL ALLOCATION |//////////////////|
ADJUSTMENT (SUM OF ITEMS 4 AND 5)................................................................|4846 0 | 6.
7. INCOME TAXES ATTRIBUTABLE TO INCOME FROM INTERNATIONAL OPERATIONS AS ESTIMATED IN ITEM 6.........|4797 0 | 7.
8. ESTIMATED NET INCOME ATTRIBUTABLE TO INTERNATIONAL OPERATIONS (ITEM 6 MINUS 7)...................|4341 0 | 8.
|------------------|
MEMORANDA |------------------|
1. INTRACOMPANY INTEREST INCOME INCLUDED IN ITEM 1.a. ABOVE.........................................|4847 0 | M.1.
2. INTRACOMPANY INTEREST EXPENSE INCLUDED IN ITEM 1.b. ABOVE........................................|4848 0 | M.2.
|------------------|
</TABLE>
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS REQUIRED
BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
<TABLE>
<CAPTION>
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. INTEREST INCOME BOOKED AT IBFs...................................................................|4849 0 | 1.
2. INTEREST EXPENSE BOOKED AT IBFs..................................................................|4850 0 | 2.
3. NONINTEREST INCOME ATTRIBUTABLE TO INTERNATIONAL OPERATIONS BOOKED AT DOMESTIC OFFICES |//////////////////|
(EXCLUDING IBFs): |//////////////////|
a. GAINS (LOSSES) AND EXTRAORDINARY ITEMS.......................................................|5491 0 | 3.a.
b. FEES AND OTHER NONINTEREST INCOME ...........................................................|5492 0 | 3.b.
4. PROVISION FOR LOAN AND LEASE LOSSES ATTRIBUTABLE TO INTERNATIONAL OPERATIONS BOOKED AT DOMESTIC |//////////////////|
OFFICES (EXCLUDING IBFs).........................................................................|4852 0 | 4.
5. OTHER NONINTEREST EXPENSE ATTRIBUTABLE TO INTERNATIONAL OPERATIONS BOOKED AT DOMESTIC OFFICES |//////////////////|
(EXCLUDING IBFs).................................................................................|4853 0 | 5.
|------------------|
</TABLE>
<PAGE> 33
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-7
HOUSTON, TX 77252 (9)
FDIC CERTIFICATE NUMBER: 03263
SCHEDULE RI-E EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.
DETAIL ALL ADJUSTMENTS IN SCHEDULES RI-A AND RI-B, ALL EXTRAORDINARY ITEMS AND
OTHER ADJUSTMENTS IN SCHEDULE RI, AND ALL SIGNIFICANT ITEMS OF OTHER
NONINTEREST INCOME AND OTHER NONINTEREST EXPENSE IN SCHEDULE RI.
(SEE INSTRUCTIONS FOR DETAILS.)
<TABLE>
<CAPTION>
|-----------|
| I495 |
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS|RIAD Bil Mil Thou|
- -------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. ALL OTHER NONINTEREST INCOME (FROM SCHEDULE RI, ITEM 5.f(2)) |/////////////////|
REPORT AMOUNTS THAT EXCEED 10% OF SCHEDULE RI, ITEM 5.f(2): |/////////////////|
a. NET GAINS ON OTHER REAL ESTATE OWNED.....................................|5415 0 | 1.a.
b. NET GAINS ON SALES OF LOANS .............................................|5416 0 | 1.b.
c. NET GAINS ON SALES OF PREMISES AND FIXED ASSETS .........................|5417 0 | 1.c.
ITEMIZE AND DESCRIBE THE THREE LARGEST AMOUNTS THAT EXCEED 10% OF |/////////////////|
SCHEDULE RI, ITEM 5.f.(2): |/////////////////|
d.|4461| Interbank Contract Services |4461 10,270 | 1.d.
e.|4462| Foreclosed Property Operating Income |4462 4,952 | 1.e.
f.|4463| |4463 0 | 1.f.
2. OTHER NONINTEREST EXPENSE (FROM SCHEDULE RI, ITEM 7.c.): |/////////////////|
a. AMORTIZATION EXPENSE OF INTANGIBLE ASSETS................................|4531 40,274 | 2.a.
REPORT AMOUNTS THAT EXCEED 10% OF SCHEDULE RI, ITEM 7.c.: |/////////////////|
b. NET LOSSES ON OTHER REAL ESTATE OWNED....................................|5418 38,951 | 2.b.
c. NET LOSSES ON SALES OF LOANS ............................................|5419 0 | 2.c.
d. NET LOSSES ON SALES OF PREMISES AND FIXED ASSETS ........................|5420 0 | 2.d.
ITEMIZE AND DESCRIBE THE THREE LARGEST OTHER AMOUNTS THAT EXCEED 10% OF |/////////////////|
SCHEDULE RI, ITEM 7.c.: |/////////////////|
e.|4464| Restructuring Charge |4464 42,478 | 2.e.
f.|4467| |4467 0 | 2.f.
g.|4468| |4468 0 | 2.g.
3. EXTRAORDINARY ITEMS AND OTHER ADJUSTMENTS (FROM SCHEDULE RI, ITEM 11.a) |/////////////////|
AND APPLICABLE INCOME TAX EFFECT (FROM SCHEDULE RI, ITEM 11.b) |/////////////////|
(ITEMIZE AMD DESCRIBE ALL EXTRAORDINARY ITEMS AND OTHER ADJUSTMENTS): |/////////////////|
a. (1)|6440|Effect of adopting FASB Statement No. 109 "Ac|------------------|6440 38,709 | 3.a.(1)
(2) APPLICABLE INCOME TAX EFFECT......................|4486 0 |/////////////////| 3.a.(2)
b. (1)|4487|Prior Service Cost of Post Retirement Benefit|------------------|4487 (24,633)| 3.b.(1)
(2) APPLICABLE INCOME TAX EFFECT......................|4488 (7,705)|/////////////////| 3.b.(2)
c. (1)|4489| |------------------|4489 0 | 3.c.(1)
(2) APPLICABLE INCOME TAX EFFECT......................|4491 0 |/////////////////| 3.c.(2)
4. EQUITY CAPITAL ADJUSTMENTS FROM AMENDED REPORTS OF |------------------|/////////////////|
INCOME (FROM SCHEDULE RI-A, ITEM 2) (ITEMIZE AND DESCRIBE ALL ADJUSTMENTS): |/////////////////|
a.|4492| |4492 0 | 4.a.
b.|4493| |4493 0 | 4.b.
5. CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES FROM PRIOR |/////////////////|
YEARS (FROM SCHEDULE RI-A, ITEM 9) (ITEMIZE AND DESCRIBE ALL CHANGES IN |/////////////////|
ACCOUNTING PRINCIPLES): |/////////////////|
a.|4494| |4494 0 | 5.a.
b.|4495| |4495 0 | 5.b.
6. CORRECTIONS OF MATERIAL ACCOUNTING ERRORS FROM PRIOR YEARS (FROM |/////////////////|
SCHEDULE RI-A, ITEM 10) (ITEMIZE AND DESCRIBE ALL CORRECTIONS): |/////////////////|
a.|4496| |4496 0 | 6.a.
b.|4497| |4497 0 | 6.b.
|-----------------|
</TABLE>
<PAGE> 34
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RI-8
HOUSTON, TX 77252 (10)
SCHEDULE RI-E CONTINUED
<TABLE>
<CAPTION>
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RIAD Bil Mil Thou|
- ---------------------------------------------------------------------------|-----------------|
<S> <C> <C>
7. OTHER TRANSACTIONS WITH PARENT HOLDING COMPANY (FROM SCHEDULE RI-A, |/////////////////|
ITEM 13) (ITEMIZE AND DESCRIBE ALL SUCH TRANSACTIONS): |/////////////////|
a.|4498|Capital Injection |4498 96,274 | 7.a.
b.|4499| |4499 0 | 7.b.
8. ADJUSTMENTS TO ALLOWANCE FOR LOAN AND LEASE LOSSES (FROM SCHEDULE RI-B, |/////////////////|
PART II, ITEM 5) ( ITEMIZE AND DESCRIBE ALL ADJUSTMENTS): |/////////////////|
a.|4521|Allowance for banks acquired in business combination |4521 135,463 | 8.a.
b.|4522|First City Allowance at acquistion |4522 19,237 | 8.b.
9. OTHER EXPLANATIONS (THE SPACE BELOW IS PROVIDED FOR THE BANK TO BRIEFLY |/////////////////|
DESCRIBE, AT ITS OPTION, ANY OTHER SIGNIFICANT ITEMS AFFECTING THE |/////////////////|
REPORT OF INCOME): |/////////////////|
|/////////////////|
NO COMMENT |4769 0 |
|-----------------|
OTHER EXPLANATIONS (PLEASE TYPE OR PRINT CLEARLY): | I498 | I499 |
|4769| |-----------------|
</TABLE>
<PAGE> 35
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-1
HOUSTON, TX 77252 (11)
FDIC CERTIFICATE NUMBER: 03263
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE
CHARTERED SAVINGS BANKS FOR
December 31, 1993
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT OUTSTANDING AS OF THE LAST BUSINESS DAY OF THE
QUARTER.
<TABLE>
<CAPTION>
|------------|
SCHEDULE RC - BALANCE SHEET | C400 | <---
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou |
- ----------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
ASSETS |//////////////////|
1. CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS (FROM SCHEDULE RC-A): |//////////////////|
a. NONINTEREST-BEARING BALANCES AND CURRENCY AND COIN (1).................................|0081 2,146,327 | 1.a
b. INTEREST-BEARING BALANCES (2)..........................................................|0071 5,110 | 1.b
2. SECURITIES (FROM SCHEDULE RC-B)...........................................................|0390 2,741,890 | 2.
3. FEDERAL FUNDS SOLD & SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL IN DOMESTIC OFFICES |//////////////////|
OF THE BANK AND OF ITS EDGE AND AGREEMENT SUBSIDIARIES, AND IN IBFs: |//////////////////|
a. FEDERAL FUNDS SOLD.....................................................................|0276 5,100,725 | 3.a.
b. SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL........................................|0277 53,148 | 3.b.
4. LOANS AND LEASE FINANCING RECEIVABLES: |------------------|//////////////////|
a. LOANS AND LEASES, NET OF UNEARNED INCOME (FROM SCHEDULE RC-C).......|2122 10,179,286 |//////////////////| 4.a
b. LESS: ALLOWANCE FOR LOAN AND LEASE LOSSES...........................|3123 324,608 |//////////////////| 4.b
c. LESS: ALLOCATED TRANSFER RISK RESERVE...............................|3128 2,290 |//////////////////| 4.c
d. LOANS AND LEASES, NET OF UNEARNED INCOME, |------------------|//////////////////|
ALLOWANCE, AND RESERVE (ITEM 4.a. MINUS 4.b. AND 4.c.).................................|2125 9,852,388 | 4.d
5. ASSETS HELD IN TRADING ACCOUNTS ..........................................................|2146 15,621 | 5.
6. PREMISES AND FIXED ASSETS (INCLUDING CAPITALIZED LEASES)..................................|2145 505,383 | 6.
7. OTHER REAL ESTATE OWNED (FROM SCHEDULE RC-M)..............................................|2150 132,113 | 7.
8. INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATED COMPANIES (FROM SCHEDULE RC-M)..|2130 0 | 8.
9. CUSTOMERS' LIABILITY TO THIS BANK ON ACCEPTANCES OUTSTANDING..............................|2155 11,269 | 9.
10. INTANGIBLE ASSETS (FROM SCHEDULE RC-M)....................................................|2143 482,379 | 10.
11. OTHER ASSETS (FROM SCHEDULE RC-F).........................................................|2160 341,058 | 11.
12. TOTAL ASSETS (SUM OF ITEMS 1 THROUGH 11)..................................................|2170 21,387,411 | 12.
|------------------|
</TABLE>
- ----------
(1) INCLUDES CASH ITEMS IN PROCESS OF COLLECTION AND UNPOSTED DEBITS.
(2) INCLUDES TIME CERTIFICATES OF DEPOSIT NOT HELD IN TRADING ACCOUNTS.
<PAGE> 36
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-2
HOUSTON, TX 77252 (12)
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
|------------------|
DOLLAR AMOUNTS IN THOUSANDS| Bil Mil Thou |
- ------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
LIABILITIES |//////////////////|
13. DEPOSITS: |//////////////////|
a. IN DOMESTIC OFFICES (SUM OF TOTALS OF COLUMNS A AND C FROM SCHEDULE RC-E, PART I)...|RCON|2200 16,863,105 | 13.a
(1) NONINTEREST-BEARING(1).........................................|RCON|6631 6,830,368 |//////////////////| 13.a.(1)
(2) INTEREST-BEARING...............................................|RCON|6636 10,032,737 |//////////////////| 13.a.(2)
b. IN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFs (FROM SCHEDULE |//////////////////|
RC-E, PART II)......................................................................|RCFN|2200 413,178 | 13.b.
(1) NONINTEREST-BEARING............................................|RCFN|6631 0 |//////////////////| 13.b.(1)
(2) INTEREST-BEARING...............................................|RCFN|6636 413,178 |//////////////////| 13.b.(2)
14. FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE IN DOMESTIC |//////////////////|
OFFICES OF THE BANK AND OF ITS EDGE AND AGREEMENT SUBSIDIARIES, AND IN IBFs.................|//////////////////|
a. FEDERAL FUNDS PURCHASED.............................................................|RCFD|0278 685,025 | 14.a.
b. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE......................................|RCFD|0279 240,675 | 14.b.
15. DEMAND NOTES ISSUED TO THE U.S. TREASURY...............................................|RCON|2840 777,884 | 15.
16. OTHER BORROWED MONEY...................................................................|RCFD|2850 102,874 | 16.
17. MORTGAGE INDEBTEDNESS AND OBLIGATIONS UNDER CAPITALIZED LEASES.........................|RCFD|2910 27,243 | 17.
18. BANK'S LIABILITY ON ACCEPTANCES EXECUTED AND OUTSTANDING...............................|RCFD|2920 11,269 | 18.
19. SUBORDINATED NOTES AND DEBENTURES .....................................................|RCFD|3200 345,000 | 19.
20. OTHER LIABILITIES (FROM SCHEDULE RC-G).................................................|RCFD|2930 226,375 | 20.
21. TOTAL LIABILITIES (SUM OF ITEMS 13 THROUGH 20).........................................|RCFD|2948 19,692,628 | 21.
|//////////////////|
22. LIMITED-LIFE PREFERRED STOCK AND RELATED SURPLUS.......................................|RCFD|3282 0 | 22.
EQUITY CAPITAL |//////////////////|
23. PERPETUAL PREFERRED STOCK AND RELATED SURPLUS..........................................|RCFD|3838 0 | 23.
24. COMMON STOCK...........................................................................|RCFD|3230 612,893 | 24.
25. SURPLUS (EXCLUDE ALL SURPLUS RELATED TO PREFERRED STOCK)...............................|RCFD|3839 812,366 | 25.
26. a. UNDIVIDED PROFITS AND CAPITAL RESERVES..............................................|RCFD|3632 222,534 | 26.a.
26. b. LESS: NET UNREALIZED LOSS ON MARKETABLE EQUITY SECURITIES...........................|RCFD|0297 (46,990)| 26.b.
27. CUMULATIVE FOREIGN CURRENCY TRANSLATION ADJUSTMENTS....................................|RCFD|3284 0 | 27.
28. TOTAL EQUITY CAPITAL (SUM OF ITEMS 23 THROUGH 27)......................................|RCFD|3210 1,694,783 | 28.
29. TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, |//////////////////|
AND EQUITY CAPITAL (SUM OF ITEMS 21, 22, AND 28).......................................|RCFD|3300 21,387,411 | 29.
|------------------|
</TABLE>
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION
<TABLE>
<S> <C>
1. INDICATE IN THE BOX AT THE RIGHT THE NUMBER OF THE STATEMENT BELOW THAT BEST NUMBER
DESCRIBES THE MOST COMPREHENSIVE LEVEL OF AUDITING WORK PERFORMED FOR THE BANK |------------------|
BY INDEPENDENT EXTERNAL AUDITORS AS OF ANY DATE DURING 1992 ............................|RCFD|6724 0 | M.1.
|------------------|
1 = INDEPENDENT AUDIT OF THE BANK CONDUCTED IN ACCORD- 4 = DIRECTORS' EXAMINATION OF THE BANK PERFORMED
ANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS BY BY OTHER EXTERNAL AUDITORS (MAY BE REQUIRED
A CERTIFIED PUBLIC ACCOUNTING FIRM WHICH SUBMITS A BY STATE CHARTERING AUTHORITY)
REPORT ON THE BANK 5 = REVIEW OF THE BANK'S FINANCIAL STATEMENTS BY
2 = INDEPENDENT AUDIT OF THE BANK'S PARENT HOLDING EXTERNAL AUDITORS
COMPANY CONDUCTED IN ACCORDANCE WITH GENERALLY AC- 6 = COMPILATION OF THE BANK'S FINANCIAL STATE-
CEPTED AUDITING STANDARDS BY A CERTIFIED PUBLIC MENTS BY EXTERNAL AUDITORS
ACCOUNTING FIRM WHICH SUBMITS A REPORT ON THE CON- 7 = OTHER AUDIT PROCEDURES (EXCLUDING TAX PRE-
SOLIDATED HOLDING COMPANY (BUT NOT ON THE BANK PARATION WORK)
SEPARATELY) 8 = NO EXTERNAL AUDIT WORK
3 = DIRECTORS' EXAMINATION OF THE BANK CONDUCTED IN
ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STAN-
DARDS BY A CERTIFIED PUBLIC ACCOUNTING FIRM (MAY
BE REQUIRED BY STATE CHARTERING AUTHORITY)
</TABLE>
- ---------
(1) INCLUDES TOTAL DEMAND DEPOSITS AND NONINTEREST-BEARING TIME AND SAVINGS
DEPOSITS.
<PAGE> 37
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-3
HOUSTON, TX 77252 (13)
SCHEDULE RC-A - CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
<TABLE>
<CAPTION>
|-----------|
EXCLUDE ASSETS HELD IN TRADING ACCOUNTS | C405 | <---
|-----------------------------------|
| (Column A) | (Column B) |
| Consolidated | Domestic |
| Bank | Offices |
DOLLAR AMOUNTS IN THOUSANDS|RCFD Bil Mil Thou|RCON Bil Mil Thou|
- -------------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
1. CASH ITEMS IN PROCESS OF COLLECTION, UNPOSTED DEBITS, AND CURRENCY AND COIN.......|0022 1,614,426 |/////////////////| 1.
a. CASH ITEMS IN PROCESS OF COLLECTION AND UNPOSTED DEBITS........................|/////////////////|0020 1,337,670 | 1.a
b. CURRENCY AND COIN..............................................................|/////////////////|0080 276,756 | 1.b
2. BALANCES DUE FROM DEPOSITORY INSTITUTIONS IN THE U.S..............................|/////////////////|0082 50,840 | 2.
a. U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS (INCLUDING THEIR IBFs).............|0083 84 |/////////////////| 2.a
b. OTHER COMMERCIAL BANKS IN THE U.S. AND OTHER DEPOSITORY INSTITUTIONS IN THE |/////////////////|/////////////////| 2.b
U.S (INCLUDING THEIR IBFs).....................................................|0085 50,756 |/////////////////|
3. BALANCES DUE FROM BANKS IN FOREIGN COUNTRIES AND FOREIGN CENTRAL BANKS............|/////////////////|0070 15,991 | 3.
a. FOREIGN BRANCHES OF OTHER U.S. BANKS...........................................|0073 201 |/////////////////| 3.a.
b. OTHER BANKS IN FOREIGN COUNTRIES AND FOREIGN CENTRAL BANKS.....................|0074 15,813 |/////////////////| 3.b.
4. BALANCES DUE FROM FEDERAL RESERVE BANKS...........................................|0090 470,157 |0090 470,157 | 4.
5. TOTAL (SUM OF ITEMS 1 THROUGH 4) (TOTAL OF COLUMN A MUST EQUAL SCHEDULE RC ITEM 1)|0010 2,151,437 |0010 2,151,414 | 5.
|-----------------------------------|
MEMORANDUM
1. NONINTEREST-BEARING BALANCES DUE FROM COMMERCIAL BANKS IN THE U.S. |-----------------|
(INCLUDED IN ITEM 2, COLUMN B ABOVE)................................................................|0050 50,741 | M.1.
|-----------------|
</TABLE>
<PAGE> 38
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-4
HOUSTON, TX 77252 (14)
SCHEDULE RC-B - SECURITIES
<TABLE>
<CAPTION>
|-----------|
EXCLUDE ASSETS HELD IN TRADING ACCOUNTS. | C410 | <---
|--------------------------------------------------|
| CONSOLIDATED BANK | DOMESTIC OFFICE|
|---------------------------------|----------------|
| (Column A) | (Column B) | (Column C) |
| Book Value |Market Value (1)| Book Value |
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Tho|RCFD Bil Mil Tho|RCON Bil Mil Tho|
- --------------------------------------------------------------------|----------------|----------------|----------------|
<S> <C> <C> <C> <C>
1. U.S. TREASURY SECURITIES ........................................|0400 206,988 |0401 206,988 |0400 206,988 |1.
2. U.S. GOVERNMENT AGENCY AND CORPORATION OBLIGATIONS: |////////////////|////////////////|////////////////|
a. ALL HOLDINGS OF U.S. GOVERNMENT-ISSUED OR GUARANTEED CERT- |////////////////|////////////////|////////////////|
IFICATES OF PARTICIPATION IN POOLS OF RESIDENTIAL MORTGAGES |////////////////|////////////////|////////////////|
(1) ISSUED BY FNMA AND FHLMC..................................|3760 928,399 |3761 942,710 |3760 928,399 |2.a.(1)
(2) GUARANTEED BY GNMA (EXCLUDE FNMA AND FHLMC ISSUES)........|3762 901,845 |3763 901,845 |3762 901,845 |2.a.(2)
b. ALL OTHER.....................................................|0604 308,867 |0605 307,427 |////////////////|2.b.
(1) COLLATERALIZED MORTGAGE OBLIGATIONS ISSUED BY FNMA AND |////////////////|////////////////|////////////////|
FHLMC (INCLUDE REMICS)....................................|////////////////|////////////////|3764 306,881 |2.b.(1)
(2) ALL OTHER U.S. GOVERNMENT-SPONSORED AGENCY OBLIGATIONS (2)|////////////////|////////////////|3765 1,986 |2.b.(2)
(3) ALL OTHER U.S. GOVERNMENT AGENCY OBLIGATIONS (3)..........|////////////////|////////////////|3766 0 |2.b.(3)
3. SECURITIES ISSUED BY STATES AND POLITICAL SUBDIVISIONS IN THE U.S|0402 1,471 |0403 1,675 |////////////////|3.
a. GENERAL OBLIGATIONS...........................................|////////////////|////////////////|3767 1,263 |3.a.
b. REVENUE OBLIGATIONS...........................................|////////////////|////////////////|3768 208 |3.b.
c. INDUSTRIAL DEVELOPMENT AND SIMILAR OBLIGATIONS................|////////////////|////////////////|3769 0 |3.c.
4. OTHER DOMESTIC DEBT SECURITIES: |////////////////|////////////////|////////////////|
a. ALL HOLDINGS OF PRIVATE (I.E. NONGOVERNMENT-ISSUED OR |////////////////|////////////////|////////////////|
GUARANTEED) CERTIFICATES OF PARTICIPATION IN POOLS OF |////////////////|////////////////|////////////////|
RESIDENTIAL MORTGAGES.........................................|0408 0 |0409 0 |0408 0 |4.a.
b. ALL OTHER DOMESTIC DEBT SECURITIES |////////////////|////////////////|////////////////|
(1) PRIVATELY-ISSUED COLLATERALIZED MORTGAGE OBLIGATIONS |////////////////|////////////////|////////////////|
(INCLUDE REMICS)..........................................|5361 30,498 |5362 30,665 |5361 30,498 |4.b.(1)
(2) ALL OTHER.................................................|5363 319,758 |5364 321,605 |5363 319,758 |4.b.(2)
5. FOREIGN DEBT SECURITIES .........................................|3635 1,273 |3636 1,230 |3635 1,273 |5.
6. EQUITY SECURITIES: |////////////////|////////////////|////////////////|
a. MARKETABLE EQUITY SECURITIES: |////////////////|////////////////|////////////////|
(1) INVESTMENTS IN MUTUAL FUNDS...............................|3637 0 |3638 0 |3637 0 |6.a.(1)
(2) OTHER MARKETABLE EQUITY SECURITIES .......................|3639 33 |3640 33 |3639 33 |6.a.(2)
(3) LESS: NET UNREALIZED LOSS ON MARKETABLE EQUITY SECURITIES |3641 0 |////////////////|3641 0 |6.a.(3)
b. OTHER EQUITY SECURITIES (INCLUDES FEDERAL RESERVE STOCK)......|3642 42,758 |3643 42,758 |3642 42,758 |6.b.
7. TOTAL (SUM OF ITEMS 1 THROUGH 6) (TOTAL OF COLUMN A MUST EQUAL |////////////////|////////////////|////////////////|
SCHEDULE RC, ITEM 2).............................................|0390 2,741,890 |0391 2,756,936 |0390 2,741,890 |7.
|--------------------------------------------------|
</TABLE>
- -----------
(1) SEE DISCUSSION IN GLOSSARY ENTRY FOR "MARKET VALUE OF SECURITIES."
(2) INCLUDES OBLIGATIONS (OTHER THAN CERTIFICATES OF PARTICIPATION IN POOLS OF
RESIDENTIAL MORTGAGES, CMOS, AND REMICS) ISSUED BY THE FARM CREDIT SYSTEM,
THE FEDERAL HOME LOAN BANK SYSTEM, THE FEDERAL HOME LOAN MORTGAGE
CORPORATION, THE FEDERAL NATIONAL MORTGAGE ASSOCIATION, THE FINANCING
CORPORATION, RESOLUTION FUNDING CORPORATION, THE STUDENT LOAN MARKETING
ASSOCIATION, AND THE TENNESSEE VALLEY AUTHORITY.
(3) INCLUDES SMALL BUSINESS ADMINISTRATION "GUARANTEED LOAN POOL
CERTIFICATES," U.S. MARITIME ADMINISTRATION OBLIGATIONS, AND EXPORT-IMPORT
BANK PARTICIPATION CERTIFICATES.
<PAGE> 39
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-5
HOUSTON, TX 77252 (15)
<TABLE>
<CAPTION>
SCHEDULE RC-B --CONTINUED |----------------|
| CONSOL. BANK |
| BOOK VALUE |
MEMORANDA |----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Tho|
- -------------------------------------------------------------------------------------|----------------|
<S> <C> <C>
1. PLEDGED SECURITIES................................................................|0416 1,639,101 | M.1.
2. MATURITY AND REPRICING DATA FOR DEBT SECURITIES: (1),(2) |////////////////|
a. FIXED RATE DEBT SECURITIES WITH A REMAINING MATURITY OF: |////////////////|
(1) THREE MONTHS OR LESS.......................................................|0343 592 | M.2.a.(1)
(2) OVER THREE MONTHS THROUGH 12 MONTHS........................................|0344 108,151 | M.2.a.(2)
(3) OVER ONE YEAR THROUGH FIVE YEARS...........................................|0345 834,182 | M.2.a.(3)
(4) OVER FIVE YEARS............................................................|0346 1,725,729 | M.2.a.(4)
(5) TOTAL FIXED RATE DEBT SECURITIES (SUM OF MEMORANDUM ITEMS 2.a.(1) |////////////////|
THROUGH 2.a.(4)............................................................|0347 2,668,654 | M.2.a.(5)
b. FLOATING RATE DEBT SECURITIES WITH A REPRICING FREQUENCY OF: |////////////////|
(1) QUARTERLY OR MORE FREQUENTLY...............................................|4544 29,121 | M.2.b.(1)
(2) ANNUALLY OR MORE FREQUENTLY, BUT LESS FREQUENTLY THAN |////////////////|
QUARTERLY..................................................................|4545 1,272 | M.2.b.(2)
(3) EVERY FIVE YEARS OR MORE FREQUENTLY, BUT LESS FREQUENTLY |////////////////|
THAN ANNUALLY..............................................................|4551 0 | M.2.b.(3)
(4) LESS FREQUENTLY THAN EVERY FIVE YEARS........................ ..........|4552 0 | M.2.b.(4)
(5) TOTAL FLOATING RATE DEBT SECURITIES (SUM OF MEMORANDUM ITEMS 2.b.(1) |////////////////|
THROUGH 2.b.(4)............................................................|4553 30,393 | M.2.b.(5)
C. TOTAL DEBT SECURITIES (SUM OF MEMORANDUM ITEMS 2.a.(5) AND 2.b.(5)) |////////////////|
(MUST EQUAL THE SUM OF ITEMS 1 THROUGH 5, COLUMN A, ABOVE).....................|0393 2,699,047 | M.2.c.
3. TAXABLE SECURITIES ISSUED BY STATES AND POLITICAL SUBDIVISIONS IN THE U.S. |////////////////|
(INCLUDED IN SCHEDULE RC-B, ITEM 3, COLUMN A, ABOVE)..............................|0301 173 | M.3.
4. DEBT SECURITIES RESTRUCTURED AND IN COMPLIANCE WITH MODIFIED TERMS |////////////////|
(INCLUDED IN SCHEDULE RC-B, ITEMS 3 THROUGH 5, COLUMN A, ABOVE)...................|5365 0 | M.4.
5. DEBT SECURITIES HELD FOR SALE (INCLUDED IN SCHEDULE RC-B, ITEMS 1 |////////////////|
THROUGH 5, COLUMN A, ABOVE).......................................................|5366 1,378,535 | M.5.
6. FLOATING RATE DEBT SECURITIES WITH A REMAINING MATURITY OF ONE YEAR OR LESS |////////////////|
(INCLUDED IN MEMORANDUM ITEM 2.b.(5) ABOVE).......................................|5519 0 | M.6.
|----------------|
- -----------
</TABLE>
(1) EXCLUDE EQUITY SECURITIES, E.G., INVESTMENTS IN MUTUAL FUNDS, FEDERAL
RESERVE STOCK, COMMON STOCK, AND PREFERRED STOCK.
(2) MEMORANDUM ITEM 2 IS NOT APPLICABLE TO SAVINGS BANKS THAT MUST COMPLETE
SUPPLEMENTAL SCHEDULE RC-J.
<PAGE> 40
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-6
HOUSTON, TX 77252 (16)
SCHEDULE RC-C - LOANS AND LEASE FINANCING RECEIVABLES
NET OF UNEARNED INCOME AND BEFORE ADJUSTMENT FOR ALLOWANCE FOR LOAN AND LEASE
LOSSES. EXCLUDE ASSETS HELD IN TRADING ACCOUNTS.
<TABLE>
<CAPTION>
|-----------|
| C415 | <---
|-----------------------------------|
| (Column A) | (Column B) |
| Consolidated | Domestic |
| Bank | Offices |
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Tho|RCON Bil Mil Thou|
- ------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
1. LOANS SECURED BY REAL ESTATE..............................................|1410 2,241,139 |/////////////////| 1.
a. CONSTRUCTION AND LAND DEVELOPMENT......................................|/////////////////|1415 361,879 | 1.a.
b. SECURED BY FARMLAND (INCLUDING FARM RESIDENTIAL AND OTHER IMPROVEMENTS)|/////////////////|1420 23,689 | 1.b.
c. SECURED BY 1-4 FAMILY RESIDENTIAL PROPERTIES...........................|/////////////////|/////////////////|
(1) REVOLVING, OPEN-END LOANS SECURED BY 1-4 FAMILY RESIDENTIAL |/////////////////|/////////////////|
PROPERTIES AND EXTENDED UNDER LINES OF CREDIT |/////////////////|1797 0 | 1.c.(1)
(2) ALL OTHER LOANS SECURED BY 1-4 FAMILY RESIDENTIAL PROPERTIES: |/////////////////|/////////////////|
(a) SECURED BY FIRST LIENS..........................................|/////////////////|5367 540,847 | 1.c.(2)(a)
(b) SECURED BY JUNIOR LIENS.........................................|/////////////////|5368 168,748 | 1.c.(2)(b)
d. SECURED BY MULTIFAMILY (5 OR MORE) RESIDENTIAL PROPERTIES..............|/////////////////|1460 135,667 | 1.d
e. SECURED BY NONFARM NONRESIDENTIAL PROPERTIES...........................|/////////////////|1480 1,010,309 | 1.e
2. LOANS TO DEPOSITORY INSTITUTIONS: |/////////////////|/////////////////|
a. TO COMMERCIAL BANKS IN THE U.S.........................................|/////////////////|1505 17,677 | 2.a.
(1) TO U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS......................|1506 5,735 |/////////////////| 2.a.(1)
(2) TO OTHER COMMERCIAL BANKS IN THE U.S. ..............................|1507 16,942 |/////////////////| 2.a.(2)
b. TO OTHER DEPOSITORY INSTITUTIONS IN THE U.S. ..........................|1517 701 |1517 701 | 2.b.
c. TO BANKS IN FOREIGN COUNTRIES..........................................|/////////////////|1510 8,220 | 2.c.
(1) TO FOREIGN BRANCHES OF OTHER U.S. BANKS.............................|1513 0 |/////////////////| 2.c.(1)
(2) TO OTHER BANKS IN FOREIGN COUNTRIES.................................|1516 37,291 |/////////////////| 2.c.(2)
3. LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER LOANS TO FARMERS.......|1590 86,115 |1590 86,115 | 3.
4. COMMERCIAL AND INDUSTRIAL LOANS: |/////////////////|/////////////////|
a. TO U.S. ADDRESSEES (DOMICILE)..........................................|1763 3,994,840 |1763 3,923,130 | 4.a
b. TO NON-U.S. ADDRESSEES (DOMICILE)......................................|1764 117,759 |1764 29,937 | 4.b
5. ACCEPTANCES OF OTHER BANKS: |/////////////////|/////////////////|
a. OF U.S. BANKS...........................................................|1756 0 |1756 0 | 5.a.
b. OF FOREIGN BANKS........................................................|1757 0 |1757 0 | 5.b.
6. LOANS TO INDIVIDUALS FOR HOUSEHOLD, FAMILY, AND OTHER PERSONAL |/////////////////|/////////////////|
EXPENDITURES (I.E., CONSUMER LOANS) (INCLUDES PURCHASED PAPER)............|/////////////////|1975 1,324,947 | 6.
a. CREDIT CARDS AND RELATED PLANS (INCLUDES CHECK CREDIT AND OTHER |/////////////////|/////////////////|
REVOLVING CREDIT PLANS)................................................|2008 88,144 |/////////////////| 6.a.
b. OTHER (INCLUDES SINGLE PAYMENTS, INSTALLMENT, AND ALL STUDENT LOANS)...|2011 1,236,953 |/////////////////| 6.b.
7. LOANS TO FOREIGN GOVERNMENTS AND OFFICIAL INSTITUTIONS (INCLUDING |/////////////////|/////////////////|
FOREIGN CENTRAL BANKS)....................................................|2081 251,491 |2081 245,104 | 7.
8. OBLIGATIONS (OTHER THAN SECURITIES AND LEASES) OF STATES AND POLITICAL |/////////////////|/////////////////|
SUBDIVISIONS IN THE U.S. (INCLUDES NONRATED INDUSTRIAL DEVELOPMENT |/////////////////|/////////////////|
OBLIGATIONS): |/////////////////|/////////////////|
a. TAXABLE OBLIGATIONS....................................................|2033 0 |2033 0 | 8.a
b. TAX-EXEMPT OBLIGATIONS.................................................|2079 80,763 |2079 80,763 | 8.b
9. OTHER LOANS...............................................................|1563 1,879,958 |/////////////////| 9.
a. LOANS FOR PURCHASING OR CARRYING SECURITIES (SECURED AND UNSECURED)....|/////////////////|1545 264,474 | 9.a
b. ALL OTHER LOANS (EXCLUDE CONSUMER LOANS)...............................|/////////////////|1564 1,615,484 | 9.b
10. LEASE FINANCING RECEIVABLES (NET OF UNEARNED INCOME)......................|/////////////////|2165 213,928 | 10.
a. OF U.S. ADDRESSEES (DOMICILE)..........................................|2182 166,392 |/////////////////| 10.a.
b. OF NON-U.S. ADDRESSEES (DOMICILE)......................................|2183 47,536 |/////////////////| 10.b.
11. LESS: ANY UNEARNED INCOME ON LOANS REFLECTED IN ITEMS 1-9 ABOVE...........|2123 72,473 |2123 72,473 | 11.
12. TOTAL LOANS AND LEASES, NET OF UNEARNED INCOME (SUM OF ITEMS 1 THROUGH 10 |/////////////////|/////////////////|
MINUS ITEM 11)(TOTAL OF COLUMN A MUST EQUAL SCHEDULE RC,ITEM 4.a.)........|2122 10,179,286 |2122 9,979,146 | 12.
|-----------------------------------|
</TABLE>
<PAGE> 41
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-7
HOUSTON, TX 77252 (17)
<TABLE>
<CAPTION>
|-----------------------------------|
SCHEDULE RC-C - CONTINUED | (Column A) | (Column B) |
| Consolidated | Domestic |
MEMORANDA | Bank | Offices |
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou|RCON Bil Mil Thou|
- --------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
1. COMMERCIAL PAPER INCLUDED IN SCHEDULE RC-C ABOVE.............................|1496 0 |1496 0 | M.1.
2. LOANS AND LEASES RESTRUCTURED AND IN COMPLIANCE WITH MODIFIED TERMS |/////////////////|-----------------|
(INCLUDED IN SCHEDULE RC-C ABOVE): |/////////////////|
a. LOANS SECURED BY REAL ESTATE: |/////////////////|
(1) TO U.S. ADDRESSEES (DOMICILE).........................................|1687 3 | M.2.a.(1)
(2) TO NON-U.S. ADDRESSEES (DOMICILE).....................................|1689 0 | M.2.a.(2)
b. LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER LOANS TO FARMERS.......|1613 0 | M.2.b.
c. COMMERCIAL AND INDUSTRIAL LOANS: |/////////////////|
(1) TO U.S. ADDRESSEES (DOMICILE).........................................|1758 0 | M.2.c.(1)
(2) TO NON-U.S. ADDRESSEES (DOMICILE).....................................|1759 0 | M.2.c.(2)
d. ALL OTHER LOANS (EXCLUDE LOANS TO INDIVIDUALS FOR HOUSEHOLD, FAMILY, |/////////////////|
AND OTHER PERSONAL EXPENDITURES)..........................................|1615 244,039 | M.2.d.
e. LEASE FINANCING RECEIVABLES: |/////////////////|
(1) OF U.S. ADDRESSEES (DOMICILE).........................................|1789 0 | M.2.e.(1)
(2) OF NON-U.S. ADDRESSEES (DOMICILE).....................................|1790 0 | M.2.e.(2)
f. TOTAL (SUM OF MEMORANDUM ITEMS 2.a. THROUGH 2.e.).........................|1616 244,042 | M.2.f.
3. MATURITY AND REPRICING DATA FOR LOANS AND LEASES (1)(EXCLUDING THOSE |/////////////////|
IN NONACCRUAL STATUS): |/////////////////|
a. FIXED RATE LOANS AND LEASES WITH A REMAINING MATURITY OF: |/////////////////|
(1) THREE MONTHS OR LESS..................................................|0348 266,757 | M.3.a.(1)
(2) OVER THREE MONTHS THROUGH 12 MONTHS...................................|0349 439,730 | M.3.a.(2)
(3) OVER ONE YEAR THROUGH FIVE YEARS......................................|0356 1,581,385 | M.3.a.(3)
(4) OVER FIVE YEARS.......................................................|0357 1,050,236 | M.3.a.(4)
(5) TOTAL FIXED RATE LOANS AND LEASES (SUM OF MEMORANDUM ITEMS 3.a.(1) |/////////////////|
THROUGH 3.a.(4).......................................................|0358 3,338,108 | M.3.a.(5)
b. FLOATING RATE LOANS WITH A REPRICING FREQUENCY OF: |/////////////////|
(1) QUARTERLY OR MORE FREQUENTLY..........................................|4554 4,167,139 | M.3.b.(1)
(2) ANNUALLY OR MORE FREQUENTLY, BUT LESS FREQUENTLY THAN |/////////////////|
QUARTERLY.............................................................|4555 1,799,836 | M.3.b.(2)
(3) EVERY FIVE YEARS OR MORE FREQUENTLY, BUT LESS FREQUENTLY |/////////////////|
THAN ANNUALLY.........................................................|4561 665,530 | M.3.b.(3)
(4) LESS FREQUENTLY THAN EVERY FIVE YEARS.................................|4564 107,596 | M.3.b.(4)
(5) TOTAL FLOATING RATE LOANS (SUM OF MEMORANDUM ITEMS |/////////////////|
3.b.(1) THROUGH 3.b.(4)...............................................|4567 6,740,101 | M.3.b.(5)
c. TOTAL LOANS AND LEASES (SUM OF MEMORANDUM ITEMS 3.a.(5) AND 3.b.(5)) (MUST|/////////////////|
EQUAL THE SUM OF TOTAL LOANS AND LEASES, NET, FROM SCHEDULE RC-C, ITEM |/////////////////|
12, PLUS UNEARNED INCOME FROM SCHEDULE RC-C, ITEM 11, MINUS TOTAL NONACCRU|/////////////////|
LOANS AND LEASES FROM SCHEDULE RC-N, SUM OF ITEMS 1 AND 8, COLUMN C)......|1479 10,078,209 | M.3.c.
4. LOANS TO FINANCE COMMERCIAL REAL ESTATE, CONSTRUCTION, AND LAND DEVELOPMENT |/////////////////|
ACTIVITIES (NOT SECURED BY REAL ESTATE) INCLUDED IN SCHEDULE RC-C, |/////////////////|
ITEMS 4 AND 9, COLUMN A, PAGE RC-6 (2) ......................................|2746 210,605 | M.4.
5. LOANS AND LEASES HELD FOR SALE (INCLUDED IN SCHEDULE RC-C ABOVE).............|5369 262,969 | M.5.
6. ADJUSTABLE RATE CLOSED-END LOANS SECURED BY FIRST LIENS ON 1-4 FAMILY |/////////////////|
RESIDENTIAL PROPERTIES (INCLUDED IN SCHEDULE RC-C, ITEM 1.c.(2)(a), |/////////////////|-----------------|
COLUMN B, ABOVE..............................................................|/////////////////|5370 22,175 | M.6.
|-----------------|-----------------|
- --------------
</TABLE>
MEMORANDUM ITEM 3 IS NOT APPLICABLE TO SAVINGS BANKS THAT MUST COMPLETE
SUPPLEMENTAL SCHEDULE RC-J.
<PAGE> 42
CERT: 03263 00373 STBK 48-3926 FFIEC 031
TEXAS COMMERCE BANK NATIONAL ASSOCIATION PAGE RC-7a
P.O. BOX 2558 (17a)
HOUSTON, TX 77252
SCHEDULE RC-C----CONTINUED
PART II. LOANS TO SMALL BUSINESSES AND SMALL FARMS
SCHEDULE RC-C, PART II IS TO BE REPORTED ONLY WITH THE JUNE REPORT OF
CONDITION.
REPORT THE NUMBER AND AMOUNT CURRENTLY OUTSTANDING AS OF JUNE 30 OF BUSINESS
LOANS WITH "ORIGINAL AMOUNTS" OF $1,000,000 OR LESS AND FARM LOANS WITH
"ORIGINAL AMOUNTS" OF $500,000 OR LESS. THE FOLLOWING GUIDELINES SHOULD BE
USED TO DETERMINE THE "ORIGINAL AMOUNT" OF A LOAN: (1) FOR LOANS DRAWN DOWN
UNDER LINES OF CREDIT OR LOAN COMMITMENTS, THE "ORIGINAL AMOUNT" OF THE LOAN IS
THE SIZE OF THE LINE OF CREDIT OR LOAN COMMITMENT WHEN THE LINE OF CREDIT OR
LOAN COMMITMENT WAS GRANTED. (2) FOR LOAN PARTICIPATIONS AND SYNDICATIONS, THE
"ORIGINAL AMOUNT" OF THE LOAN PARTICIPATION OR SYNDICATION IS THE ENTIRE AMOUNT
OF THE CREDIT ORIGINATED BY THE LEAD LENDER. (3) FOR ALL OTHER LOANS, THE
"ORIGINAL AMOUNT" IS THE TOTAL AMOUNT OF THE LOAN AT ORIGINATION.
LOANS TO SMALL BUSINESS
<TABLE>
<S> <C> <C>
|------------|
1. INDICATE IN THE APPROPRIATE BOX AT THE RIGHT WHETHER ALL OR SUBSTANTIALLY ALL OF THE BANK'S | C418 | <---
"LOANS SECURED BY NONFARM NONRESIDENTIAL PROPERTIES" REPORTED IN SCHEDULE RC-C, PART I, |----|------------|
ITEM 1.e, AND COMMERCIAL AND INDUSTRIAL LOANS TO U.S. ADDRESSEES" REPORTED IN |RCON| YES | NO |
SCHEDULE RC-C, PART I, ITEM 4.a, HAVE ORIGINAL AMOUNTS OF $100,000 OR LESS ...................|-----------------|
|6999 0 | 1.
|-----------------|
</TABLE>
IF YES, COMPLETE ITEMS 2.a AND 2.b. BELOW, SKIP ITEM 3 AND 4, AND GO TO ITEM 5.
IF NO, SKIP ITEMS 2.a AND 2.b, COMPLETE ITEMS 3 AND 4 BELOW, AND GO TO ITEM 5.
<TABLE>
<S> <C> <C>
|-----------------|
2. REPORT THE TOTAL NUMBER OF LOANS CURRENTLY OUTSTANDING FOR EACH OF THE | NUMBER OF LOANS |
FOLLOWING SCHEDULE RC-C, PART I, LOAN CATEGORIES: |-----------------|
a. "LOANS SECURED BY NONFARM NONRESIDENTIAL PROPERTIES" REPORTED IN |/////////////////|
SCHEDULE RC-C, PART I, ITEM 1.e ........................................|/////////////////|
|5562 |2.a.
b. "COMMERCIAL AND INDUSTRIAL LOANS TO U.S. ADDRESSEES" REPORTED IN |/////////////////|
SCHEDULE RC-C, PART I, ITEM 4.a ........................................|5563 0 |2.b.
|-----------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------------|-----------------|
| (Column A) | (Column B) |
| | AMOUNT |
| | CURRENTLY |
| | OUTSTANDING |
DOLLAR AMOUNTS IN THOUSANDS | NUMBER OF LOANS |RCONBil Mil Thou |
- --------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
3. NUMBER AND AMOUNT CURRENTLY OUTSTANDING OF "LOANS SECURED BY NONFARM |/////////////////|/////////////////|
NONRESIDENTIAL PROPERTIES" REPORTED IN SCHEDULE RC-C, PART I, ITEM 1.e |/////////////////|/////////////////|
(SUM OF ITEMS 3.a THROUGH 3.c MUST BE LESS THAN OR EQUAL TO |/////////////////|/////////////////|
SCHEDULE RC-C, PART I, ITEM 1.e): |/////////////////|/////////////////|
a. WITH ORIGINAL AMOUNTS OF $100,000 OR LESS ..............................|5564 0 |5565 0 | 3.a.
b. WITH ORIGINAL AMOUNTS OF MORE THAN $100,000 THROUGH $250,000 ...........|5566 0 |5567 0 | 3.b.
c. WITH ORIGINAL AMOUNTS OF MORE THAN $250,000 THROUGH $1,000,000 .........|5568 0 |5569 0 | 3.c.
4. NUMBER AND AMOUNT CURRENTLY OUTSTANDING OF "COMMERCIAL AND INDUSTRIAL |/////////////////|/////////////////|
LOANS TO U.S. ADDRESSEES" REPORTED IN SCHEDULE RC-C, PART I, ITEM 4.a |/////////////////|/////////////////|
(SUM OF ITEMS 4.a THROUGH 4.c MUST BE LESS THAN OR EQUAL TO |/////////////////|/////////////////|
SCHEDULE RC-C, PART I, ITEM 4.a): |/////////////////|/////////////////|
a. WITH ORIGINAL AMOUNTS OF $100,000 OR LESS ..............................|5570 0 |5571 0 | 4.a.
b. WITH ORIGINAL AMOUNTS OF MORE THAN $100,000 THROUGH $250,000 ...........|5572 0 |5573 0 | 4.b.
c. WITH ORIGINAL AMOUNTS OF MORE THAN $250,000 THROUGH $1,000,000 .........|5574 0 |5575 0 | 4.c.
|--------------- |---------------- |
</TABLE>
<PAGE> 43
CERT: 03263 00373 STBK 48-3926 FFIEC 031
TEXAS COMMERCE BANK NATIONAL ASSOCIATION PAGE RC-7b
P.O. BOX 2558 (17b)
HOUSTON, TX 77252
SCHEDULE RC-C----CONTINUED
PART II. CONTINUED
AGRICULTURAL LOANS TO SMALL FARMS
<TABLE>
<S> <C> <C>
5. INDICATE IN THE APPROPRIATE BOX AT THE RIGHT WHETHER ALL OR SUBSTANTIALLY ALL OF THE BANK'S
"LOANS SECURED BY FARMLAND (INCLUDING FARM RESIDENTIAL AND OTHER IMPROVEMENTS)" REPORTED IN |----|------------|
SCHEDULE RC-C, PART I, ITEM 1.b, AND "LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER |RCON| YES | NO |
LOANS TO FARMERS" REPORTED IN SCHEDULE RC-C, PART I, ITEM 3, HAVE ORIGINAL AMOUNTS OF |-----------------|
$100,000 OR LESS .............................................................................|6860 0 | 5.
|-----------------|
</TABLE>
IF YES, COMPLETE ITEMS 6.a AND 6.b BELOW AND DO NOT COMPLETE ITEMS 7 AND 8.
IF NO, SKIP ITEMS 6.a AND 6.b AND COMPLETE ITEMS 7 AND 8, BELOW.
<TABLE>
<CAPTION>
|-----------------|
| NUMBER OF LOANS |
<S> <C> <C>
6. REPORT THE TOTAL NUMBER OF LOANS CURRENTLY OUTSTANDING FOR EACH OF THE |-----------------|
FOLLOWING SCHEDULE RC-C, PART I, LOAN CATEGORIES: |/////////////////|
a. "LOANS SECURED BY FARMLAND (INCLUDING FARM RESIDENTIAL AND OTHER |/////////////////|
IMPROVEMENTS)" REPORTED IN SCHEDULE RC-C, PART I, ITEM 1.b .............|5576 0 |6.a.
b. "LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER LOANS TO FARMERS" |/////////////////|
REPORTED IN SCHEDULE RC-C, PART I, ITEM 3 ..............................|5577 0 |6.b.
|-----------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------------|-----------------|
| (Column A) | (Column B) |
| | AMOUNT |
| | CURRENTLY |
| | OUTSTANDING |
DOLLAR AMOUNTS IN THOUSANDS | NUMBER OF LOANS |RCONBil Mil Thou |
- --------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
7. NUMBER AND AMOUNT CURRENTLY OUTSTANDING OF "LOANS SECURED BY FARMLAND |/////////////////|/////////////////|
(INCLUDING FARM RESIDENTIAL AND OTHER IMPROVEMENTS)" REPORTED IN SCHEDULE |/////////////////|/////////////////|
RC-C, PART I, ITEM 1.b (SUM OF ITEMS 7.a THROUGH 7.c MUST BE LESS THAN OR |/////////////////|/////////////////|
EQUAL TO SCHEDULE RC-C, PART I, ITEM 1.b): |/////////////////|/////////////////|
a. WITH ORIGINAL AMOUNTS OF $100,000 OR LESS ..............................|5578 0 |5579 0 | 7.a.
b. WITH ORIGINAL AMOUNTS OF MORE THAN $100,000 THROUGH $250,000 ...........|5580 0 |5581 0 | 7.b.
c. WITH ORIGINAL AMOUNTS OF MORE THAN $250,000 THROUGH $500,000 ......... |5582 0 |5583 0 | 7.c.
8. NUMBER AND AMOUNT CURRENTLY OUTSTANDING OF "LOANS TO FINANCE AGRICULTURAL |/////////////////|/////////////////|
PRODUCTION AND OTHER LOANS TO FARMERS" REPORTED IN SCHEDULE RC-C, PART I, |/////////////////|/////////////////|
ITEM 3 (SUM OF ITEMS 8.a THROUGH 8.c MUST BE LESS THAN OR EQUAL TO |/////////////////|/////////////////|
SCHEDULE RC-C, PART I, ITEM 3.): |/////////////////|/////////////////|
a. WITH ORIGINAL AMOUNTS OF $100,000 OR LESS ..............................|5584 0 |5585 0 | 8.a.
b. WITH ORIGINAL AMOUNTS OF MORE THAN $100,000 THROUGH $250,000 ...........|5586 0 |5587 0 | 8.b.
c. WITH ORIGINAL AMOUNTS OF MORE THAN $250,000 THROUGH $500,000 ......... |5588 0 |5589 0 | 8.c.
|-----------------|-----------------|
</TABLE>
<PAGE> 44
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-8
HOUSTON, TX 77252 (18)
FDIC CERTIFICATE NUMBER 03263
SCHEDULE RC-D IS TO BE COMPLETED ONLY BY BANKS WITH $1 BILLION OR MORE IN TOTAL
ASSETS.
<TABLE>
<CAPTION>
|------------|
SCHEDULE RC-D - ASSETS HELD IN TRADING ACCOUNTS IN | C420 | <---
DOMESTIC OFFICES ONLY |-----------------|
|DOMESTIC OFFICES |
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCON Bil Mil Thou|
- --------------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. U.S. TREASURY SECURITIES.......................................................................|1010 2,012 | 1.
2. U.S. GOVERNMENT AGENCY AND CORPORATION OBLIGATIONS.............................................|1020 0 | 2.
3. SECURITIES ISSUED BY STATES AND POLITICAL SUBDIVISIONS IN THE U.S. ............................|1025 13,569 | 3.
4. OTHER BONDS, NOTES AND DEBENTURES..............................................................|1045 0 | 4.
5. CERTIFICATES OF DEPOSITS.......................................................................|1026 40 | 5.
6. COMMERCIAL PAPER...............................................................................|1027 0 | 6.
7. BANKER'S ACCEPTANCES...........................................................................|1028 0 | 7.
8. OTHER..........................................................................................|1029 0 | 8.
9. TOTAL (SUM OF ITEMS 1 THROUGH 8) ..............................................................|2146 15,621 | 9.
|-----------------|
</TABLE>
<PAGE> 45
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-9
HOUSTON, TX 77252 (19)
<TABLE>
<CAPTION>
|-----------|
| C425 | <----
SCHEDULE RC-E DEPOSIT LIABILITIES |-----------------------------------------------------|
| TRANSACTION ACCOUNTS | NONTRANSACTION |
PART 1. DEPOSITS IN DOMESTIC OFFICES | | ACCOUNTS |
|-----------------------------------------------------|
| (Column A) | (Column B) | (Column C) |
|Total transaction| Memo: Total | Total nontrans- |
|accounts (includ-|demand deposits | action accounts |
|ing total demand | (included in |(including MMDAs)|
DOLLAR AMOUNTS IN THOUSANDS| deposits) | Column A) | |
- -------------------------------------------------------|RCON Bil Mil Thou|RCON Bil Mil Thou|RCON Bil Mil Thou|
<S> <C> <C> <C> <C>
DEPOSITS OF: |-----------------|-----------------|-----------------|
1. INDIVIDUALS, PARTNERSHIPS AND CORPORATIONS .........|2201 7,482,724 |2240 5,496,369 |2346 8,484,221 | 1.
2. U.S. GOVERNMENT.....................................|2202 69,668 |2280 69,668 |2520 309 | 2.
3. STATES & POLITICAL SUBDIVISIONS IN THE U.S..........|2203 242,436 |2290 36,592 |2530 74,221 | 3.
4. COMMERCIAL BANKS IN THE U.S. .......................|2206 316,190 |2310 316,190 |/////////////////| 4.
a. U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS......|/////////////////|/////////////////|2347 0 | 4.a.
b. OTHER COMMERCIAL BANKS IN THE U.S. ..............|/////////////////|/////////////////|2348 0 | 4.b.
5. OTHER DEPOSITORY INSTITUTIONS IN THE U.S............|2207 33,064 |2312 33,064 |2349 0 | 5.
6. BANKS IN FOREIGN COUNTRIES .........................|2213 30,536 |2320 30,536 |/////////////////| 6.
a. FOREIGN BRANCHES OF OTHER U.S. BANKS ............|/////////////////|/////////////////|2367 0 | 6.a.
b. OTHER BANKS IN FOREIGN COUNTRIES.................|/////////////////|/////////////////|2373 0 | 6.b.
7. FOREIGN GOVERNMENTS AND OFFICIAL INSTITUTIONS |/////////////////|/////////////////|/////////////////|
(INCLUDING FOREIGN CENTRAL BANKS)...................|2216 1,001 |2300 1,001 |2377 0 | 7.
8. CERTIFIED AND OFFICIAL CHECKS.......................|2330 128,735 |2330 128,735 |/////////////////| 8.
9. TOTAL (SUM OF ITEMS 1 THROUGH 8) (SUM OF COLUMNS A |/////////////////|/////////////////|/////////////////|
AND C MUST EQUAL SCHEDULE RC, ITEM 13.a.)...........|2215 8,304,354 |2210 6,112,155 |2385 8,558,751 | 9.
|-----------------|-----------------|-----------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS|RCON Bil Mil Thou|
- -------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
MEMORANDA |/////////////////|
1. SELECTED COMPONENTS OF TOTAL DEPOSITS (I.E., SUM OF ITEM 9, COLUMNS A AND C): |/////////////////|
a. TOTAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAs) AND KEOGH PLAN ACCOUNTS..................|6835 881,687 | M.1.a
b. TOTAL BROKERED DEPOSITS..............................................................|2365 0 | M.1.b
c. FULLY INSURED BROKERED DEPOSITS (I.E. TOTAL BROKERED RETAIL DEPOSITS) (INCLUDED IN |/////////////////|
MEMORANDUM ITEM 1.B ABOVE) |/////////////////|
(1) ISSUED IN DENOMINATIONS OF LESS THAN $100,000 ....................................|2343 0 | M.1.c.(1)
(2) ISSUED EITHER IN DENOMINATIONS OF $100,000 OR IN DENOMINATIONS GREATER THAN |/////////////////|
$100,000 AND PARTICIPATED OUT BY THE BROKER IN SHARES OF $100,000 OR LESS.........|2344 0 | M.1.c.(2)
d. TOTAL DEPOSITS DENOMINATED IN FOREIGN CURRENCIES.....................................|3776 760 | M.1.d.
e. PREFERRED DEPOSITS(DEPOSITS OF STATES AND POLITICAL SUBDIVISIONS IN THE U.S. |/////////////////|
REPORTED IN ITEM 3 ABOVE WHICH ARE SECURED OR COLLATERALIZED)........................|5590 295,078 | M.1.e.
2. COMPONENTS OF TOTAL NONTRANSACTION ACCOUNTS (SUM OF MEMORANDA ITEMS 2.A THROUGH 2.D |/////////////////|
MUST EQUAL ITEM 9, COLUMN C ABOVE): |/////////////////|
a. SAVINGS DEPOSITS: |/////////////////|
(1) MONEY MARKET DEPOSIT ACCOUNTS (MMDAs)............................................|6810 1,869,006 | M.2.a.(1)
(2) OTHER SAVINGS DEPOSITS (EXCLUDES MMDAs)..........................................|0352 2,976,087 | M.2.a.(2)
b. TOTAL TIME DEPOSITS LESS THAN $100,000 ..............................................|6648 2,744,631 | M.2.b
c. TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE.....................................|6645 938,101 | M.2.c
d. OPEN-ACCOUNT TIME DEPOSITS OF $100,000 OR MORE.......................................|6646 30,926 | M.2.d
3. ALL NOW ACCOUNTS (INCLUDED IN COLUMN A ABOVE)...........................................|2398 2,192,199 | M.3.
|-----------------|
DEPOSIT TOTALS FOR FDIC INSURANCE ASSESSMENTS (1) |-----------------|
4. TOTAL DEPOSITS IN DOMESTIC OFFICES (SUM OF ITEM 9, COLUMN A AND ITEM 9, COLUMN C) |/////////////////|
(MUST EQUAL SCHEDULE RC, ITEM 13.A) ....................................................|2200 16,863,105 | M.4.
a. TOTAL DEMAND DEPOSITS (MUST EQUAL ITEM 9, COLUMN B)..................................|2210 6,112,155 | M.4.a.
b. TOTAL TIME AND SAVINGS DEPOSITS (2) (MUST EQUAL ITEM 9, COLUMN A PLUS COLUMN C |/////////////////|
MINUS COLUMN B) .....................................................................|2350 10,750,950 | M.4.b.
|-----------------|
- ---------
</TABLE>
(1) AN AMENDED CERTIFIED STATEMENT SHOULD BE SUBMITTED TO THE FDIC IF THE
DEPOSIT TOTALS REPORTED IN THIS ITEM ARE AMENDED AFTER THE SEMI-ANNUAL
CERTIFIED STATEMENT ORIGINALLY COVERING THIS REPORT DATE HAS BEEN FILED
WITH THE FDIC.
(2) FOR FDIC INSURANCE ASSESSMENT PURPOSES, "TOTAL TIME AND SAVINGS DEPOSITS"
CONSISTS OF NONTRANSACTION ACCOUNTS AND ALL TRANSACTION ACCOUNTS OTHER
THAN DEMAND DEPOSITS.
<PAGE> 46
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-10
HOUSTON, TX 77252 (20)
SCHEDULE RC-E - CONTINUED
PART 1. - CONTINUED
<TABLE>
<CAPTION>
MEMORANDA (CONTINUED) |------------------|
DOLLAR AMOUNTS IN THOUSANDS |RCON Bil Mil Thou |
- -------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
5. TIME DEPOSITS OF LESS THAN $100,000 AND OPEN-ACCOUNT TIME DEPOSITS OF $100,000 |//////////////////|
OR MORE (INCLUDED IN MEMORANDUM ITEMS 2.b. AND 2.d. ABOVE) WITH A REMAINING |//////////////////|
MATURITY OR REPRICING FREQUENCY OF (1): |//////////////////|
a. THREE MONTHS OR LESS...........................................................|0359 1,222,996 | M.5.a.
b. OVER THREE MONTHS THROUGH 12 MONTHS (BUT NOT OVER 12 MONTHS)...................|3644 932,676 | M.5.b.
6. MATURITY AND REPRICING DATA FOR TIME CERTIFICATES OF DEPOSITS OF |//////////////////|
$100,000 OR MORE (1): |//////////////////|
a. FIXED RATE TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE WITH A REMAINING |//////////////////|
MATURITY OF: |//////////////////|
(1) THREE MONTHS OR LESS.......................................................|2761 658,351 | M.6.a.(1)
(2) OVER THREE MONTHS THROUGH 12 MONTHS........................................|2762 212,263 | M.6.a.(2)
(3) OVER ONE YEAR THROUGH FIVE YEARS...........................................|2763 55,053 | M.6.a.(3)
(4) OVER FIVE YEARS............................................................|2765 0 | M.6.a.(4)
(5) TOTAL FIXED RATE TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE (SUM |//////////////////|
OF MEMORANDUM ITEMS 6.a.(1) THROUGH 6.a.(4)................................|2767 925,667 | M.6.a.(5)
b. FLOATING RATE TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE WITH A |//////////////////|
REPRICING FREQUENCY OF: |//////////////////|
(1) QUARTERLY OR MORE FREQUENTLY...............................................|4568 12,434 | M.6.b.(1)
(2) ANNUALLY OR MORE FREQUENTLY, BUT LESS FREQUENTLY THAN |//////////////////|
QUARTERLY..................................................................|4569 0 | M.6.b.(2)
(3) EVERY FIVE YEARS OR MORE FREQUENTLY, BUT LESS FREQUENTLY |//////////////////|
THAN ANNUALLY..............................................................|4571 0 | M.6.b.(3)
(4) LESS FREQUENTLY THAN EVERY FIVE YEARS......................................|4572 0 | M.6.b.(4)
(5) TOTAL FLOATING RATE TIME CERTIFICATES OF DEPOSITS OF $100,000 |//////////////////|
OR MORE (SUM OF MEMORANDUM ITEMS 6.b.(1) THROUGH 6.b.(4)...................|4573 12,434 | M.6.b.(5)
c. TOTAL TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE (SUM OF MEMORANDUM |//////////////////|
ITEMS 6.a.(5) AND 6.b.(5)) (MUST EQUAL MEMORANDUM ITEM 2.c. ABOVE).............|6645 938,101 | M.6.c.
|------------------|
- ---------
</TABLE>
(1) MEMORANDUM ITEMS 5 AND 6 ARE NOT APPLICABLE TO SAVINGS BANKS THAT MUST
COMPLETE SUPPLEMENTAL SCHEDULE RC-J.
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFs)
<TABLE>
<CAPTION>
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFN Bil Mil Thou |
- -------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
DEPOSITS OF: |//////////////////|
1. INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS.......................................|2621 413,178 | 1.
2. U.S. BANKS (INCLUDING IBFs AND FOREIGN BRANCHES OF U.S. BANKS)....................|2623 0 | 2.
3. FOREIGN BANKS (INCLUDING U.S. BRANCHES AND |//////////////////|
AGENCIES OF FOREIGN BANKS, INCLUDING THEIR IBFs)..................................|2625 0 | 3.
4. FOREIGN GOVERNMENTS AND OFFICIAL INSTITUTIONS (INCLUDING FOREIGN CENTRAL BANKS)...|2650 0 | 4.
5. CERTIFIED AND OFFICIAL CHECKS.....................................................|2330 0 | 5.
6. ALL OTHER DEPOSITS................................................................|2668 0 | 6.
7. TOTAL (SUM OF ITEMS 1 THORUGH 6) (MUST EQUAL SCHEDULE RC, ITEM 13.b.).............|2200 413,178 | 7.
|------------------|
</TABLE>
<PAGE> 47
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-11
HOUSTON, TX 77252 (21)
<TABLE>
<CAPTION>
SCHEDULE RC-F - OTHER ASSETS |-----------|
| C430 | <---
DOLLAR AMOUNTS IN THOUSANDS |-----------------|
- ----------------------------------------------------------------------------------------|RCFD Bil Mil Thou|
|-----------------|
<S> <C> <C>
1. INCOME EARNED, NOT COLLECTED ON LOANS................................................|2164 52,917 | 1.
2. NET DEFERRED TAX ASSETS (1) .........................................................|2148 25,512 | 2.
3. EXCESS RESIDENTIAL MORTGAGE SERVICING FEES RECEIVABLE................................|5371 0 | 3.
4. OTHER (ITEMIZE AMOUNTS THAT EXCEED 25% OF THIS ITEM) ................................|2168 262,629 | 4.
|----| |----------------|/////////////////|
a. |3549| 0 |3549| 0 |/////////////////| 4.a.
b. |3550| 0 |3550| 0 |/////////////////| 4.b.
c. |3551| 0 |3551| 0 |/////////////////| 4.c.
|----| |----------------|/////////////////|
5. TOTAL (SUM OF ITEMS 1 THROUGH 4) (MUST EQUAL SCHEDULE RC, ITEM 11)...................|2160 341,058 | 5.
|-----------------|
MEMORANDUM
DOLLAR AMOUNTS IN THOUSANDS |-----------------|
- ----------------------------------------------------------------------------------------|RCFD Bil Mil Thou|
1. DEFERRED TAX ASSETS DISALLOWED FOR REGULATORY CAPITAL PURPOSES.......................|5610 0 | M.1.
|-----------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------|
SCHEDULE RC-G - OTHER LIABILITIES | C435 | <---
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou|
- ----------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. a. INTEREST ACCRUED AND UNPAID ON DEPOSITS IN DOMESTIC OFFICES(2)....................|3645 22,295 | 1.a.
b. OTHER EXPENSES ACCRUED AND UNPAID (INCLUDES ACCRUED INCOME TAXES PAYABLE).........|3646 168,377 | 1.b.
2. NET DEFERRED TAX LIABILITIES (1) ....................................................|3049 0 | 2.
3. MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES.......................................|3000 0 | 3.
4. OTHER (ITEMIZE AMOUNTS THAT EXCEED 25% OF THIS ITEM).................................|2938 35,703 | 4.
|----| |----------------|/////////////////|
a. |3552|Trading Security Purchase Fails |3552| 8,990 |/////////////////| 4.a.
b. |3553| 0 |3553| 0 |/////////////////| 4.b.
c. |3554| 0 |3554| 0 |/////////////////| 4.c.
|----| |----------------|/////////////////|
5. TOTAL (SUM OF ITEMS 1 THROUGH 4) (MUST EQUAL SCHEDULE RC, ITEM 20)...................|2930 226,375 | 5.
|-----------------|
</TABLE>
- ---------
(1) SEE DISCUSSION OF DEFERRED INCOME TAXES IN GLOSSARY ENTRY ON "INCOME TAXES."
(2) FOR SAVINGS BANKS, INCLUDE "DIVIDENDS" ACCRUED AND UNPAID ON DEPOSITS.
<PAGE> 48
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-12
HOUSTON, TX 77252 (22)
FDIC CERTIFICATE NUMBER: 03263
SCHEDULE RC-H - SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
<TABLE>
<CAPTION>
|------------|
| C440 |
|------------------| <---
| DOMESTIC OFFICES |
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RCON Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. CUSTOMERS' LIABILITY TO THIS BANK ON ACCEPTANCES OUTSTANDING.....................................|2155 11,269 | 1.
2. BANK'S LIABILITY ON ACCEPTANCES EXECUTED AND OUTSTANDING.........................................|2920 11,269 | 2.
3. FEDERAL FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL...........................|1350 5,153,873 | 3.
4. FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE.......................|2800 925,700 | 4.
5. OTHER BORROWED MONEY.............................................................................|2850 102,874 | 5.
EITHER |//////////////////|
6. NET DUE FROM OWN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFs......................|2163 0 | 6.
OR |//////////////////|
7. NET DUE TO OWN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFs........................|2941 211,903 | 7.
8. TOTAL ASSETS (EXCLUDES NET DUE FROM FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFs)..|2192 21,185,537 | 8.
9. TOTAL LIABILITIES (EXCLUDES NET DUE TO FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, |//////////////////|
AND IBFs)........................................................................................|3129 19,278,851 | 9.
|------------------|
MEMORANDUM (TO BE COMPLETED ONLY BY BANKS WITH IBFs AND OTHER "FOREIGN" OFFICES)
EITHER |------------------|
1. NET DUE FROM THE IBF OF THE DOMESTIC OFFICES OF THE REPORTING BANK...............................|3051 0 | M.1.
OR |//////////////////|
2. NET DUE TO THE IBF OF THE DOMESTIC OFFICES OF THE REPORTING BANK.................................|3059 0 | M.2.
|------------------|
</TABLE>
SCHEDULE RC-I - SELECTED ASSETS AND LIABILITIES OF IBFs
<TABLE>
<CAPTION>
|------------|
TO BE COMPLETED ONLY BY BANKS WITH IBFs AND OTHER "FOREIGN" OFFICES. | C445 |
|------------------| <---
DOLLAR AMOUNTS IN THOUSANDS |RCFN Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. TOTAL IBF ASSETS OF THE CONSOLIDATED BANK (COMPONENT OF SCHEDULE RC, ITEM 12)....................|2133 0 | 1.
2. TOTAL IBF LOANS AND LEASE FINANCING RECEIVABLES (COMPONENT OF SCHEDULE RC-C, ITEM 12, |//////////////////|
COLUMN A)........................................................................................|2076 0 | 2.
3. IBF COMMERCIAL AND INDUSTRIAL LOANS (COMPONENT OF SCHEDULE RC-C, ITEM 4, COLUMN A)...............|2077 0 | 3.
4. TOTAL IBF LIABILITIES (COMPONENT OF SCHEDULE RC, ITEM 21)........................................|2898 0 | 4.
5. IBF DEPOSIT LIABILITIES DUE TO BANKS, INCLUDING OTHER IBFs (COMPONENT OF SCHEDULE RC-E, |//////////////////|
PART II, ITEMS 2 AND 3)..........................................................................|2379 0 | 5.
6. OTHER IBF DEPOSIT LIABILITIES (COMPONENT OF SCHEDULE RC-E, PART II, ITEMS 1, 4, 5 AND 6).........|2381 0 | 6.
|------------------|
</TABLE>
<PAGE> 49
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-13
HOUSTON, TX 77252 (23)
FDIC CERTIFICATE NUMBER: 03263
SCHEDULE RC-K - QUARTERLY AVERAGES (1)
<TABLE>
<CAPTION>
|------------|
| C455 | <---
|------------------|
DOLLAR AMOUNTS IN THOUSANDS| Bil Mil Thou |
- -------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
ASSETS |//////////////////|
1. INTEREST-BEARING BALANCES DUE FROM DEPOSITORY INSTITUTIONS..............................|RCFD|3381 5,095 | 1.
2. U.S. TREASURY SECURITIES AND U.S. GOVERNMENT AGENCY AND CORPORATION OBLIGATONS..........|RCFD|3382 1,876,108 | 2.
3. SECURITIES ISSUED BY STATES & POLITICAL SUBDIVISIONS IN THE U.S. .......................|RCFD|3383 1,513 | 3.
4. a. OTHER DEBT SECURITIES ...............................................................|RCFD|3647 357,505 | 4.a.
b. EQUITY SECURITES (INCLUDES INVESTMENTS IN MUTUAL FUNDS AND FEDERAL RESERVE STOCK) ...|RCFD|3648 42,941 | 4.b.
5. FEDERAL FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL IN DOMESTIC |//////////////////|
OFFICES OF THE BANK AND OF ITS EDGE AND AGREEMENT SUBSIDIARIES, AND IN IBFs.............|RCFD|3365 5,026,496 | 5.
6. LOANS: |//////////////////|
a. LOANS IN DOMESTIC OFFICES: |//////////////////|
(1) TOTAL LOANS.......................................................................|RCON|3360 9,748,031 | 6.a.(1)
(2) LOANS SECURED BY REAL ESTATE ....................................................|RCON|3385 2,014,153 | 6.a.(2)
(3) LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER LOANS TO FARMERS...............|RCON|3386 106,049 | 6.a.(3)
(4) COMMERCIAL AND INDUSTRIAL LOANS...................................................|RCON|3387 3,800,259 | 6.a.(4)
(5) LOANS TO INDIVIDUALS FOR HOUSEHOLD, FAMILY AND OTHER PERSONAL EXPENDITURES........|RCON|3388 1,230,816 | 6.a.(5)
(6) OBLIGATIONS (OTHER THAN SECURITIES AND LEASES) OF STATES AND |//////////////////|
POLITICAL SUBDIVISIONS IN THE U.S.................................................|RCON|3389 93,694 | 6.a.(6)
b. TOTAL LOANS IN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFs............|RCFN|3360 215,464 | 6.b.
7. ASSETS HELD IN TRADING ACCOUNTS.........................................................|RCFD|3401 17,969 | 7.
8. LEASE FINANCING RECEIVABLES (NET OF UNEARNED INCOME)....................................|RCFD|3484 213,874 | 8.
9. TOTAL ASSETS............................................................................|RCFD|3368 20,842,658 | 9.
LIABILITIES |//////////////////|
10. INTEREST-BEARING TRANSACTION ACCOUNTS IN DOMESTIC OFFICES (NOW ACCOUNTS, ATS ACCOUNTS, |//////////////////|
AND TELEPHONE AND PREAUTHORIZED TRANSFER ACCOUNTS)(EXCLUDE DEMAND DEPOSITS).............|RCON|3485 2,011,941 | 10.
11. NONTRANSACTION ACCOUNTS IN DOMESTIC OFFICES: |//////////////////|
a. MONEY MARKET DEPOSIT ACCOUNTS (MMDAs)................................................|RCON|3486 1,984,497 | 11.a.
b. OTHER SAVINGS DEPOSITS...............................................................|RCON|3487 2,933,465 | 11.b.
c. TIME CERTIFICATES OF DEPOSIT OF $100,000 OR MORE.....................................|RCON|3345 938,104 | 11.c.
d. ALL OTHER TIME DEPOSITS..............................................................|RCON|3469 2,869,944 | 11.d.
12. INTEREST-BEARING DEPOSITS IN FOREIGN OFFICES, EDGE AND AGREEMENT SUBSIDIARIES, AND IBFs.|RCFN|3404 506,040 | 12.
13. FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE IN DOMESTIC |//////////////////|
OFFICES OF THE BANK AND OF ITS EDGE AND AGREEMENT SUBSIDIARIES, AND IN IBFs.............|RCFD|3353 763,821 | 13.
14. OTHER BORROWED MONEY....................................................................|RCFD|3355 112,117 | 14.
|-----------------------|
- -----------
</TABLE>
(1) FOR ALL ITEMS, BANKS HAVE THE OPTION OF REPORTING EITHER (1) AN AVERAGE OF
DAILY FIGURES FOR THE QUARTER, OR (2) AN AVERAGE OF WEEKLY FIGURES (I.E.,
THE WEDNESDAY OF EACH WEEK OF THE QUARTER).
<PAGE> 50
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-14
HOUSTON, TX 77252 (24)
SCHEDULE RC-L - OFF-BALANCE SHEET ITEMS
PLEASE READ CAREFULLY THE INSTRUCTIONS FOR THE PREPARATION OF SCHEDULE RC-L.
SOME OF THE AMOUNTS REPORTED IN SCHEDULE RC-L ARE REGARDED AS VOLUME INDICATORS
AND NOT NECESSARILY AS MEASURES OF RISK.
<TABLE>
<CAPTION>
|-----------|
| C460 | <---
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou|
- ------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. UNUSED COMMITMENTS: |/////////////////|
a. REVOLVING, OPEN-END LINES SECURED BY 1-4 FAMILY RESIDENTIAL PROPERTIES, E.G., HOME |/////////////////|
EQUITY LINES.......................................................................|3814 0 | 1.a.
b. CREDIT CARD LINES..................................................................|3815 0 | 1.b.
c. COMMERCIAL REAL ESTATE, CONSTRUCTION, AND LAND DEVELOPMENT: |/////////////////|
(1) COMMITMENTS TO FUND LOANS SECURED BY REAL ESTATE ..............................|3816 145,100 | 1.c.(1)
(2) COMMITMENTS TO FUND LOANS NOT SECURED BY REAL ESTATE ..........................|6550 123,375 | 1.c.(2)
d. SECURITIES UNDERWRITING............................................................|3817 0 | 1.d.
e. OTHER UNUSED COMMITMENTS...........................................................|3818 6,919,623 | 1.e.
2. FINANCIAL STANDBY LETTERS OF CREDIT AND FOREIGN OFFICE GUARANTEES.....................|3819 1,176,336 | 2.
a. AMOUNT OF FINANCIAL STANDBY LETTERS OF CREDIT CONVEYED TO OTHERS ..................|3820 53,938 | 2.a.
3. PERFORMANCE STANDBY LETTERS OF CREDIT AND FOREIGN OFFICE GUARANTEES...................|3821 116,771 | 3.
a. AMOUNT OF PERFOMANCE STANDBY LETTERS OF CREDIT CONVEYED TO OTHERS .................|3822 5,380 | 3.a.
4. COMMERCIAL AND SIMILAR LETTERS OF CREDIT..............................................|3411 223,212 | 4.
5. PARTICIPATIONS IN ACCEPTANCES (AS DESCRIBED IN THE INSTRUCTIONS) CONVEYED TO OTHERS |/////////////////|
BY THE REPORTING BANK.................................................................|3428 0 | 5.
6. PARTICIPATIONS IN ACCEPTANCES (AS DESCRIBED IN THE INSTRUCTIONS) ACQUIRED |/////////////////|
BY THE REPORTING (NONACCEPTING) BANK..................................................|3429 0 | 6.
7. SECURITIES BORROWED...................................................................|3432 0 | 7.
8. SECURITIES LENT (INCLUDING CUSTOMERS' SECURITIES LENT WHERE THE CUSTOMER IS |/////////////////|
INDEMNIFIED AGAINST LOSS BY THE REPORTING BANK).......................................|3433 10,833 | 8.
9. MORTGAGES TRANSFERRED (I.E. SOLD OR SWAPPED) WITH RECOURSE THAT HAVE BEEN TREATED |/////////////////|
AS SOLD FOR CALL REPORT PURPOSES: |/////////////////|
a. FNMA AND FHLMC RESIDENTIAL MORTGAGE LOAN POOLS: |/////////////////|
(1) OUTSTANDING PRINCIPAL BALANCE OF MORTGAGES TRANSFERRED AS OF THE REPORT DATE....|3650 0 | 9.a.(1)
(2) AMOUNT OF RECOURSE EXPOSURE ON THESE MORTGAGES AS OF THE REPORT DATE............|3651 0 | 9.a.(2)
b. PRIVATE (NONGOVERNMENT-ISSUED OR GUARANTEED) RESIDENTIAL MORTGAGE LOAN POOLS: |/////////////////|
(1) OUTSTANDING PRINCIPAL BALANCE OF MORTGAGES TRANSFERRED AS OF THE REPORT DATE....|3652 0 | 9.b.(1)
(2) AMOUNT OF RECOURSE EXPOSURE ON THESE MORTGAGES AS OF THE REPORT DATE............|3653 0 | 9.b.(2)
c. FARMER MAC AGRICULTURAL MORTGAGE LOAN POOLS: |/////////////////|
(1) OUTSTANDING PRINCIPAL BALANCE OF MORTGAGES TRANSFERRED AS OF THE REPORT DATE....|3654 0 | 9.c.(1)
(2) AMOUNT OF RECOURSE EXPOSURE ON THESE MORTGAGES AS OF THE REPORT DATE............|3655 0 | 9.c.(2)
10. WHEN-ISSUED SECURITIES: |/////////////////|
a. GROSS COMMITMENTS TO PURCHASE......................................................|3434 63,967 | 10.a.
b. GROSS COMMITMENTS TO SELL..........................................................|3435 43,905 | 10.b.
11. INTEREST RATE CONTRACTS (EXCLUDE WHEN-ISSUED SECURITIES): |/////////////////|
a. NOTIONAL VALUE OF INTEREST RATE SWAPS..............................................|3450 5,358,187 | 11.a.
b. FUTURES AND FORWARD CONTRACTS......................................................|3823 255,627 | 11.b.
c. OPTION CONTRACTS (E.G. OPTIONS ON TREASURIES): |/////////////////|
(1) WRITTEN OPTION CONTRACTS.......................................................|3824 329,398 | 11.c.(1)
(2) PURCHASED OPTION CONTRACTS.....................................................|3825 328,498 | 11.c.(2)
12. FOREIGN EXCHANGE RATE CONTRACTS: |/////////////////|
a. NOTIONAL VALUE OF EXCHANGE SWAPS (E.G. CROSS-CURRENCY SWAPS).......................|3826 0 | 12.a.
b. COMMITMENTS TO PURCHASE FOREIGN CURRENCIES AND U.S. DOLLAR EXCHANGE (SPOT, |/////////////////|
FORWARD, AND FUTURES)..............................................................|3415 934,006 | 12.b.
c. OPTION CONTRACTS (E.G. OPTIONS ON FOREIGN CURRENCY): |/////////////////|
(1) WRITTEN OPTION CONTRACTS.......................................................|3827 11,875 | 12.c.(1)
(2) PURCHASED OPTION CONTRACTS.....................................................|3828 11,875 | 12.c.(2)
|-----------------|
</TABLE>
<PAGE> 51
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-15
HOUSTON, TX 77252 (25)
FDIC CERTIFICATE NUMBER: 03263
SCHEDULE RC-L - CONTINUED
<TABLE>
<CAPTION>
|-----------|
| C461 | <---
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou|
- -------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
13. CONTRACTS ON OTHER COMMODITIES AND EQUITIES: |/////////////////|
a. NOTIONAL VALUE OF OTHER SWAPS (E.G. OIL SWAPS)......................................|3829 43,271 | 13.a.
b. FUTURES AND FORWARD CONTRACTS (E.G. STOCK INDEX AND COMMODITY - PRECIOUS METALS, |/////////////////|
WHEAT, COTTON, LIVESTOCK - CONTRACTS)...............................................|3830 0 | 13.b.
c. OPTION CONTRACTS (E.G. OPTIONS ON COMMODITIES, INDIVIDUAL STOCKS AND STOCK INDEXES):|/////////////////|
(1) WRITTEN OPTION CONTRACTS........................................................|3831 0 | 13.c.(1)
(2) PURCHASED OPTION CONTRACTS .....................................................|3832 0 | 13.c.(2)
14. ALL OTHER OFF-BALANCE SHEET LIABILITIES (ITEMIZE AND DESCRIBE EACH COMPONENT OF THIS |/////////////////|
ITEM OVER 25% OF SCHEDULE RC, ITEM 28, "TOTAL EQUITY CAPTIAL").........................|3430 0 | 14.
|----| |-----------------|-----------------|
a. |3555| 0 |3555| 0 |/////////////////| 14.a.
b. |3556| 0 |3556| 0 |/////////////////| 14.b.
c. |3557| 0 |3557| 0 |/////////////////| 14.c.
d. |3558| 0 |3558| 0 |/////////////////| 14.d.
|----| |-----------------|-----------------|
15. ALL OTHER OFF-BALANCE SHEET ASSETS (ITEMIZE AND DESCRIBE EACH COMPONENT OF THIS |/////////////////|
ITEM OVER 25% OF SCHEDULE RC, ITEM 28, "TOTAL EQUITY CAPTIAL").........................|3430 0 | 15.
|----| |-----------------|-----------------|
a. |5592| 0 |5592| 0 |/////////////////| 15.a.
b. |5593| 0 |5593| 0 |/////////////////| 15.b.
c. |5594| 0 |5594| 0 |/////////////////| 15.c.
d. |5595| 0 |5595| 0 |/////////////////| 15.d.
|----| |-----------------|-----------------|
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA |-----------------|
DOLLAR AMOUNTS IN THOUSANDS | Bil Mil Thou|
- -------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. LOANS ORIGINATED BY THE REPORTING BANK THAT HAVE BEEN SOLD OR PARTICIPATED TO |/////////////////|
OTHERS DURING THE CALENDAR QUARTER ENDING WITH THE REPORT DATE (EXCLUDE THE PORTIONS |/////////////////|
OF SUCH LOANS RETAINED BY THE REPORTING BANK; SEE INSTRUCTIONS FOR OTHER EXCLUSIONS)....|3431 1,059,360 | M.1.
2. LOANS PURCHASED BY THE REPORTING BANK DURING THE CALENDAR QUARTER ENDING WITH |/////////////////|
THE REPORT DATE (SEE INSTRUCTIONS FOR EXCLUSIONS).......................................|3488 248,273 | M.2.
3. UNUSED COMMITMENTS WITH AN ORIGINAL MATURITY (1) EXCEEDING ONE YEAR THAT ARE REPORTED |/////////////////|
IN SCHEDULE RC-L, ITEMS 1.a. THROUGH 1.e. ABOVE (REPORT ONLY THE UNUSED PORTIONS OF |/////////////////|
COMMITMENTS THAT ARE FEE PAID OR OTHERWISE LEGALLY BINDING).............................|3833 4,825,399 | M.3.
a. PARTICIPATIONS IN COMMITMENTS WITH AN ORIGINAL MATURITY (1) EXCEEDING ONE |/////////////////|
YEAR CONVEYED TO OTHERS ............................................................|3834 213,807 | M.3.a.
4. TO BE COMPLETED ONLY BY BANKS WITH $1 BILLION OR MORE IN TOTAL ASSETS: |/////////////////|
STANDBY LETTERS OF CREDIT AND FOREIGN OFFICE GUARANTEES (BOTH FINANCIAL AND PERFORMANCE)|/////////////////|
ISSUED TO NON-U.S. ADDRESSEES (DOMICILE) INCLUDED IN ITEMS 2 AND 3 ABOVE................|3377 39,708 | M.4.
5. TO BE COMPLETED FOR THE SEPTEMBER REPORT ONLY: |/////////////////|
INSTALLMENT LOANS TO INDIVIDUALS FOR HOUSEHOLD, FAMILY, AND OTHER PERSONAL EXPENDITURES |/////////////////|
THAT HAVE BEEN SECURITIZED AND SOLD WITHOUT RECOURSE (WITH SERVICING RETAINED), AMOUNTS |/////////////////|
OUSTANDING BY TYPE OF LOAN: |/////////////////|
a. LOANS TO PURCHASE PRIVATE PASSENGER AUTOMOBILES......................................|2741 0 | M.5.a.
b. CREDIT CARDS AND RELATED PLANS.......................................................|2742 0 | M.5.b.
c. ALL OTHER CONSUMER INSTALLMENT CREDIT (INCLUDING MOBILE HOME LOANS)..................|2743 0 | M.5.c.
|-----------------|
</TABLE>
<PAGE> 52
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-16
HOUSTON, TX 77252 (26)
<TABLE>
<CAPTION>
|------------|
SCHEDULE RC-M - MEMORANDA | C465 | <---
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou |
- --------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. EXTENSIONS OF CREDIT BY THE REPORTING BANK TO ITS EXECUTIVE OFFICERS, DIRECTORS, PRINCIPAL |//////////////////|
SHAREHOLDERS, AND THEIR RELATED INTERESTS AS OF THE REPORT DATE: |//////////////////|
a. AGGREGATE AMOUNT OF ALL EXTENSIONS OF CREDIT TO ALL EXECUTIVE OFFICERS, DIRECTORS, PRINCIPAL|//////////////////|
SHAREHOLDERS, AND THEIR RELATED INTERESTS...................................................|6164 801,644 | 1.a.
b. NUMBER OF EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL SHAREHOLDERS TO WHOM THE AMOUNT |//////////////////|
OF ALL EXTENSIONS OF CREDIT BY THE REPORTING BANK (INCLUDING EXTENSIONS OF |//////////////////|
CREDIT TO RELATED INTERESTS) EQUALS OR EXCEEDS THE LESSER OF $500,000 OR |//////////////////|
5 PERCENT OF TOTAL CAPITAL AS DEFINED FOR THIS PURPOSE IN AGENCY REGULATIONS................|6165 31 | 1.b.
2. FEDERAL FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL WITH U.S. BRANCHES |//////////////////|
AND AGENCIES OF FOREIGN BANKS(1) (INCLUDED IN SCHEDULE RC, ITEMS 3.a. AND 3.b).................|3405 0 | 2.
3. NOT APPLICABLE. |//////////////////|
4. OUSTANDING PRINCIPAL BALANCE OF 1-4 FAMILY RESIDENTIAL MORTGAGE LOANS SERVICED FOR OTHERS |//////////////////|
(INCLUDE BOTH RETAINED SERVICING AND PURCHASED SERVICING): |//////////////////|
a. MORTGAGES SERVICED UNDER A GNMA CONTRACT....................................................|5500 0 | 4.a.
b. MORTGAGES SERVICED UNDER A FHLMC CONTRACT: |//////////////////|
(1) SERVICED WITH RECOURSE TO SERVICER......................................................|5501 0 | 4.b.(1)
(2) SERVICED WITHOUT RECOURSE TO SERVICER...................................................|5502 0 | 4.b.(2)
c. MORTGAGES SERVICED UNDER A FNMA CONTRACT: |//////////////////|
(1) SERVICED UNDER A REGULAR OPTION CONTRACT................................................|5503 0 | 4.c.(1)
(2) SERVICED UNDER A SPECIAL OPTION CONTRACT................................................|5504 0 | 4.c.(2)
d. MORTGAGES SERVICED UNDER OTHER SERVICING CONTRACTS..........................................|5505 0 | 4.d.
5. TO BE COMPLETED ONLY BY BANKS WITH $1 BILLION OR MORE IN TOTAL ASSETS: |//////////////////|
CUSTOMERS' LIABILITY TO THIS BANK ON ACCEPTANCES OUTSTANDING |//////////////////|
(SUM OF ITEMS 5.a. AND 5.b. MUST EQUAL SCHEDULE RC, ITEM 9): |//////////////////|
a. U.S. ADDRESSEES (DOMICILE)..................................................................|2103 6,543 | 5.a.
b. NON-U.S. ADDRESSEES (DOMICILE)..............................................................|2104 4,726 | 5.b.
6. INTANGIBLE ASSETS: |//////////////////|
a. MORTGAGE SERVICING RIGHTS...................................................................|3164 5,088 | 6.a.
b. OTHER IDENTIFIABLE INTANGIBLE ASSETS: |//////////////////|
(1) PURCHASED CREDIT CARD RELATIONSHIPS.....................................................|5506 0 | 6.b.(1)
(2) ALL OTHER IDENTIFIABLE INTANGIBLE ASSETS................................................|5507 195,546 | 6.b.(2)
c. GOODWILL....................................................................................|3163 281,745 | 6.c.
d. TOTAL (SUM OF ITEMS 6.a. THROUGH 6.c.) (MUST EQUAL SCHEDULE RC, ITEM 10)....................|2143 482,379 | 6.d.
e. INTANGIBLE ASSETS THAT HAVE BEEN GRANDFATHERED FOR REGULATORY CAPITAL PURPOSES |6442 0 | 6.e.
|------------------|
</TABLE>
<TABLE>
<CAPTION>
|------------------|
|RCFD | YES | NO |
<S> <C> <C>
7. DOES YOUR BANK HAVE ANY MANDATORY CONVERTIBLE DEBT THAT IS PART OF YOUR PRIMARY OR |------------------|
SECONDARY CAPITAL? ...........................................................................|6167 0 | 7.
|------------------|
|RCFD |Bil Mil Thou|
IF YES, CONTINUE BELOW: |------------------|
a. TOTAL EQUITY CONTRACT NOTES, GROSS .........................................................|3290 0 | 7.a.
b. COMMON OR PERPETUAL PREFERRED STOCK DEDICATED TO REDEEM THE ABOVE NOTES.....................|3291 0 | 7.b.
c. TOTAL EQUITY COMMITMENT NOTES, GROSS........................................................|3293 0 | 7.c.
d. COMMON OR PERPETUAL PREFERRED STOCK DEDICATED TO REDEEM THE ABOVE NOTES.....................|3294 0 | 7.d.
e. TOTAL (ITEM 7.a. MINUS 7.b. PLUS 7.c. MINUS 7.d.)...........................................|3295 0 | 7.e.
|------------------|
- ---------------------
</TABLE>
(1) DO NOT REPORT FEDERAL FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENTS
TO RESELL WITH OTHER COMMERCIAL BANKS IN THE U.S. IN THIS ITEM.
<PAGE> 53
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-17
HOUSTON, TX 77252 (27)
SCHEDULE RC-M - CONTINUED
<TABLE>
<CAPTION>
|------------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou |
- --------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
8.a. OTHER REAL ESTATE OWNED: |//////////////////|
(1) DIRECT AND INDIRECT INVESTMENTS IN REAL ESTATE VENTURES..................................|5372 0 | 8.a.(1)
(2) ALL OTHER REAL ESTATE OWNED..............................................................|//////////////////|
(a) CONSTRUCTION AND LAND DEVELOPMENT IN DOMESTIC OFFICES.................................|5508 54,251 | 8.a.(2)(a)
(b) FARMLAND IN DOMESTIC OFFICES..........................................................|5509 2,945 | 8.a.(2)(b)
(c) 1-4 FAMILY RESIDENTIAL PROPERTIES IN DOMESTIC OFFICES.................................|5510 1,384 | 8.a.(2)(c)
(d) MULTIFAMILY (5 OR MORE) RESIDENTIAL PROPERTIES IN DOMESTIC OFFICES....................|5511 469 | 8.a.(2)(d)
(e) NONFARM NONRESIDENTIAL PROPERTIES IN DOMESTIC OFFICES.................................|5512 73,064 | 8.a.(2)(e)
(f) IN FOREIGN OFFICES....................................................................|5513 0 | 8.a.(2)(f)
(3) TOTAL (SUM OF ITEMS 8.a.(1) AND 8.a.(2)) (MUST EQUAL SCHEDULE RC, ITEM 7)................|2150 132,113 | 8.a.(3)
b. INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATED COMPANIES: |//////////////////|
(1) DIRECT AND INDIRECT INVESTMENTS IN REAL ESTATE VENTURES..................................|5374 0 | 8.b.(1)
(2) ALL OTHER INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATED COMPANIES............|5375 0 | 8.b.(2)
(3) TOTAL (SUM OF ITEMS 8.b.(1) AND 8.b.(2)) (MUST EQUAL SCHEDULE RC, ITEM 8)................|2130 0 | 8.b.(3)
c. TOTAL ASSETS OF UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATED COMPANIES.........................|5376 0 | 8.c.
9. NONCUMULATIVE PERPETUAL PREFERRED STOCK AND RELATED SURPLUS INCLUDED IN SCHEDULE RC. ITEM 23, |//////////////////|
"PERPETUAL PREFERRED STOCK AND RELATED SURPLUS"................................................|3778 0 | 9.
|------------------|
</TABLE>
<TABLE>
<CAPTION>
MEMORANDUM |------------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou |
- --------------------------------------------------------------------------------------------------|------------------|
<S> <C> <C>
1. INTERBANK HOLDINGS OF CAPITAL INSTRUMENTS (TO BE COMPLETED FOR THE DECEMBER REPORT ONLY): |//////////////////|
a. RECIPROCAL HOLDINGS OF BANKING ORGANIZATIONS' CAPITAL INSTRUMENTS...........................|3836 0 | M.1.a.
b. NONRECIPROCAL HOLDINGS OF BANKING ORGANIZATIONS' CAPITAL INSTRUMENTS........................|3837 0 | M.1.b.
|------------------|
</TABLE>
<PAGE> 54
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-18
HOUSTON, TX 77252 (28)
<TABLE>
<CAPTION>
SCHEDULE RC-N - PAST DUE AND NONACCRUAL LOANS, LEASES, AND OTHER ASSETS |------------|
| C470 | <--
THE FFIEC REGARDS THE INFORMATION REPORTED IN ALL OF MEMORANDUM|-----------------|-----------------|
ITEM 1, IN ITEMS 1 THROUGH 10, COLUMN A, AND IN MEMORANDUM | (Column B) | (Column C) |
ITEMS 2 AND 3, COLUMN A, AS CONFIDENTIAL. |Past due 90 | Nonaccrual |
|days or more | |
|and still | |
| accruing | |
|-----------------|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou|RCFD Bil Mil Thou|
- ---------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
1. LOANS SECURED BY REAL ESTATE: |/////////////////|/////////////////|
a. TO U.S. ADDRESSEES (DOMICILE)............................|1246 16,422 |1247 105,947 | 1.a.
b. TO NON-U.S. ADDRESSEES (DOMICILE)........................|1249 0 |1250 0 | 1.b.
2. LOANS TO DEPOSITORY INSTITUTIONS AND ACCEPTANCES OF OTHER |/////////////////|/////////////////|
BANKS: |/////////////////|/////////////////|
a. TO U.S. BANKS AND OTHER U.S. DEPOSITORY INSTITUTIONS.....|5378 0 |5379 0 | 2.a.
b. TO FOREIGN BANKS.........................................|5381 0 |5382 0 | 2.b.
3. LOANS TO FINANCE AGRICULTURAL PRODUCTION AND OTHER LOANS |/////////////////|/////////////////|
TO FARMERS..................................................|1597 2,340 |1583 7,073 | 3.
4. COMMERCIAL AND INDUSTRIAL LOANS: |/////////////////|/////////////////|
a. TO U.S. ADDRESSEES (DOMICILE)............................|1252 12,696 |1253 44,324 | 4.a.
b. TO NON-U.S. ADDRESSEES (DOMICILE)........................|1255 54 |1256 1,494 | 4.b.
5. LOANS TO INDIVIDUALS FOR HOUSEHOLD, FAMILY, AND OTHER |/////////////////|/////////////////|
PERSONAL EXPENDITURES: |/////////////////|/////////////////|
a. CREDIT CARDS AND RELATED PLANS...........................|5384 323 |5385 0 | 5.a.
b. OTHER (INCLUDES SINGLE PAYMENT, INSTALLMENT, AND ALL |/////////////////|/////////////////|
STUDENT LOANS............................................|5387 22,115 |5388 1,139 | 5.b.
6. LOANS TO FOREIGN GOVERNMENTS AND OFFICIAL INSTITUTIONS......|5390 0 |5391 0 | 6.
7. ALL OTHER LOANS.............................................|5460 2,502 |5461 12,418 | 7.
8. LEASE FINANCING RECEIVABLES: |/////////////////|/////////////////|
a. OF U.S. ADDRESSEES (DOMICILE)............................|1258 0 |1259 1,155 | 8.a.
b. OF NON-U.S. ADDRESSEES (DOMICILE)........................|1272 0 |1791 0 | 8.b.
9. DEBT SECURITIES AND OTHER ASSETS (EXCLUDE OTHER REAL |/////////////////|/////////////////|
ESTATE OWNED AND OTHER REPOSSESSED ASSETS)..................|5393 0 |5394 52 | 9.
-------------------------------------|
</TABLE>
AMOUNTS REPORTED IN ITEMS 1 THROUGH 8 ABOVE INCLUDES GUARANTEED AND
UNGUARANTEED PORTIONS OF PAST DUE AND NONACCRUAL LOANS AND LEASES. REPORT IN
ITEM 10 BELOW GUARANTEED LOANS AND LEASES INCLUDED IN ITEMS 1 THROUGH 8 ABOVE.
<TABLE>
<CAPTION>
|-----------------|-----------------|
|RCFD Bil Mil Thou|RCFD Bil Mil Thou|
|-----------------|-----------------|
<S> <C> <C> <C>
10. LOANS AND LEASES REPORTED IN 1 THROUGH 8 WHICH ARE WHOLLY |/////////////////|/////////////////|
OR PARTIALLY GUARANTEED BY THE U.S. GOVERNMENT.............|5613 31,072 |5614 94,786 | 10.
10.a. GUARANTEED PORTION OF LOANS AND LEASES INCLUDED IN ITEM |/////////////////|/////////////////|
10 ABOVE.................................................|5616 29,882 |5617 87,721 | 10.a.
|-----------------|-----------------|
</TABLE>
<PAGE> 55
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-19
HOUSTON, TX 77252 (29)
SCHEDULE RC-N CONTINUED
<TABLE>
<CAPTION>
|------------|
| C473 | <--
|-----------------|-----------------|
MEMORANDUM DOLLAR AMOUNT IN THOUSANDS |RCFD Bil Mil Thou|RCFD Bil Mil Thou|
- --------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
2. LOANS TO FINANCE COMMERCIAL REAL ESTATE, CONSTRUCTION, AND |/////////////////|/////////////////|
LAND DEVELOPMENT ACTIVITIES (NOT SECURED BY REAL ESTATE) |/////////////////|/////////////////|
INCLUDED IN SCHEDULE RC-N, ITEMS 4 AND 7, ABOVE............|6559 0 |6560 780 | M.2.
3. LOANS SECURED BY REAL ESTATE IN DOMESTIC OFFICES (INCLUDED |/////////////////|/////////////////|
IN SCHEDULE RC-N, ITEM 1, ABOVE): |/////////////////|/////////////////|
a. CONSTRUCTION AND LAND DEVELOPMENT.......................|2769 2,316 |3492 23,997 | M.3.a.
b. SECURED BY FARMLAND.....................................|3494 0 |3495 1,047 | M.3.b.
c. SECURED BY 1-4 FAMILY RESIDENTIAL PROPERTIES: |/////////////////|/////////////////|
(1) REVOLVING, OPEN-ENDED LOANS SECURED BY 1-4 FAMILY |/////////////////|/////////////////|
RESIDENTIAL PROPERTIES AND EXTENDED UNDER LINES |/////////////////|/////////////////|
OF CREDIT...........................................|5399 0 |5400 0 | M.3.c.(1)
(2) ALL OTHER LOANS SECURED BY 1-4 FAMILY RESIDENTIAL |/////////////////|/////////////////|
PROPERTIES..........................................|5402 4,691 |5403 10,937 | M.3.c.(2)
d. SECURED BY MULTIFAMILY (5 OR MORE) RESIDENTIAL |/////////////////|/////////////////|
PROPERTIES..............................................|3500 1,221 |3501 10,450 | M.3.d.
e. SECURED BY NONFARM NONRESIDENTIAL PROPERTIES............|3503 8,194 |3504 59,516 | M.3.e.
|-----------------|-----------------|
</TABLE>
SCHEDULE RC-O - OTHER DATA FOR DEPOSIT INSURANCE ASSESSMENTS
<TABLE>
<CAPTION>
AN AMENDED CERTIFIED STATEMENT SHOULD BE SUBMITTED TO THE FDIC IF THE AMOUNTS REPORTED IN
ITEMS 1 THROUGH 6 OF THIS SCHEDULE ARE AMENDED AFTER THE SEMIANNUAL CERTIFIED STATEMENT |------------|
ORIGINALLY COVERING THIS REPORT DATE HAS BEEN FILED WITH THE FDIC. | C475 | <---
|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCON Bil Mil Thou|
- ---------------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. UNPOSTED DEBITS (SEE INSTRUCTIONS): |/////////////////|
a. ACTUAL AMOUNT OF ALL UNPOSTED DEBITS.........................................................|0030 0 | 1.a.
OR |/////////////////|
b. SEPARATE AMOUNT OF UNPOSTED DEBITS: |/////////////////|
(1) ACTUAL AMOUNT OF UNPOSTED DEBITS TO DEMAND DEPOSITS......................................|0031 0 | 1.b.(1)
(2) ACTUAL AMOUNT OF UNPOSTED DEBITS TO TIME AND SAVINGS DEPOSITS (1)........................|0032 0 | 1.b.(2)
2. UNPOSTED CREDITS (SEE INSTRUCTIONS): |/////////////////|
a. ACTUAL AMOUNT OF ALL UNPOSTED CREDITS........................................................|3510 0 | 2.a.
OR |/////////////////|
b. SEPARATE AMOUNT OF UNPOSTED CREDITS: |/////////////////|
(1) ACTUAL AMOUNT OF UNPOSTED CREDITS TO DEMAND DEPOSITS.....................................|3512 0 | 2.b.(1)
(2) ACTUAL AMOUNT OF UNPOSTED CREDITS TO TIME AND SAVINGS DEPOSITS (1).......................|3514 0 | 2.b.(2)
3. UNINVESTED TRUST FUNDS (CASH) HELD IN BANK'S OWN TRUST DEPARTMENT (NOT |/////////////////|
INCLUDED IN TOTAL DEPOSITS IN DOMESTIC OFFICES).................................................|3520 0 | 3.
4. DEPOSITS OF CONSOLIDATED SUBSIDIARIES IN DOMESTIC OFFICES AND IN INSURED |/////////////////|
BRANCHES IN PUERTO RICO AND U.S. TERRITORIES AND POSSESSIONS (NOT |/////////////////|
INCLUDED IN TOTAL DEPOSITS): |/////////////////|
a. DEMAND DEPOSITS OF CONSOLIDATED SUBSIDIARIES.................................................|2211 1968 | 4.a.
b. TIME AND SAVINGS DEPOSITS (1) OF CONSOLIDATED SUBSIDIARIES...................................|2351 16 | 4.b.
c. INTEREST ACCRUED AND UNPAID ON DEPOSITS OF CONSOLIDATED SUBSIDIARIES.........................|5514 0 | 4.c.
5. DEPOSITS OF INSURED BRANCHES IN PUERTO RICO AND U.S. TERRITORIES AND POSSESSIONS |/////////////////|
(INCLUDED IN SCHEDULE RC-E, PART II): |/////////////////|
a. DEMAND DEPOSITS IN INSURED BRANCHES..........................................................|2229 0 | 5.a.
b. TIME AND SAVINGS DEPOSITS (1) IN INSURED BRANCHES............................................|2383 0 | 5.b.
c. INTEREST ACCRUED AND UNPAID ON DEPOSITS IN INSURED BRANCHES (INCLUDED IN |/////////////////|
SCHEDULE RC-G, ITEM 1.b.) ...................................................................|5515 0 | 5.c.
|-----------------|
</TABLE>
<PAGE> 56
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-20
HOUSTON, TX 77252 (30)
SCHEDULE RC-O - CONTINUED
<TABLE>
<CAPTION>
|-----------------|
DOLLAR AMOUNT IN THOUSAND| Bil Mil Thou|
<S> <C> <C>
ITEM 6 IS NOT APPLICABLE TO STATE NONMEMBER BANKS THAT HAVE NOT BEEN AUTHORIZED BY THE FEDERAL |-----------------|
RESERVE TO ACT AS PASS-THROUGH CORRESPONDENTS. |/////////////////|
|/////////////////|
6. RESERVE BALANCES ACTUALLY PASSED THROUGH TO THE FEDERAL RESERVE BY THE |/////////////////|
REPORTING BANK ON BEHALF OF ITS RESPONDENT DEPOSITORY INSTITUTIONS THAT ARE |/////////////////|
ALSO REFLECTED AS DEPOSIT LIABILITIES OF THE REPORTING BANK: |/////////////////|
a. AMOUNT REFLECTED IN DEMAND DEPOSITS (INCLUDED IN SCHEDULE RC-E, PART 1, MEMORANDUM |/////////////////|
ITEM 4.a.).....................................................................................|2314 3,110 | 6.a.
b. AMOUNT REFLECTED IN TIME AND SAVINGS DEPOSITS (1) (INCLUDED IN SCHEDULE RC-E, PART 1, |/////////////////|
MEMORANDUM ITEM 4.b.)..........................................................................|2315 0 | 6.b.
7. UNAMORTIZED PREMIUMS AND DISCOUNTS ON TIME AND SAVINGS DEPOSITS:(1) |/////////////////|
a. UNAMORTIZED PREMIUMS...........................................................................|5516 16,063 | 7.b.
a. UNAMORTIZED DISCOUNTS..........................................................................|5517 0 | 7.b.
|-----------------|
8. TO BE COMPLETED BY BANKS WITH "OKAR DEPOSITS." |-----------------|
TOTAL "ADJUSTED ATTRIBUTABLE DEPOSITS" OF ALL THRIFTS ACQUIRED UNDER SECTION 5(d)(3) OF THE |/////////////////|
FEDERAL DEPOSIT INSURANCE ACT (FROM THE MOST RECENT OAKAR CERTIFIED STATEMENT ATTACH..............|5518 0 | 8.
|-----------------|
|-----------------|
9. DEPOSITS IN LIFELINE ACCOUNTS................................................................... |5596/////////////| 9.
|-----------------|
- -----------------
</TABLE>
(1) FOR FDIC INSURANCE ASSESSMENT PURPOSES, "TIME AND SAVINGS DEPOSITS"
CONSISTS OF NONTRANSACTION ACCOUNTS AND ALL TRANSACTION ACCOUNTS OTHER
THAN DEMAND DEPOSITS.
<TABLE>
<CAPTION>
MEMORANDUM (TO BE COMPLETED EACH QUARTER EXCEPT AS NOTED) |-----------------|
DOLLAR AMOUNT IN THOUSAND| Bil Mil Thou|
- -----------------------------------------------------------------------------------------------------|-----------------|
<S> <C> <C>
1. TOTAL DEPOSITS IN DOMESTIC OFFICES OF THE BANK (SUM OF MEMORANDUM ITEMS 1.a.(1) AND 1.b.(1) |/////////////////|
MUST EQUAL SCHEDULE RC, ITEM 13.a.): |/////////////////|
a. DEPOSIT ACCOUNTS OF $100,000 OR LESS: |/////////////////|
(1) AMOUNT OF DEPOSIT ACCOUNTS OF $100,000 OR LESS ............................................|2702 9,114,096 | M.1.a.(1)
(2) NUMBER OF DEPOSIT ACCOUNTS OF $100,000 OR LESS (TO BE COMPLETED FOR THE JUNE |-------------|/////////////////|
REPORT ONLY).................................................................|3779 |/////////////////| M.1.a.(2)
b. DEPOSIT ACCOUNTS OF MORE THAN $100,000: |-------------|/////////////////|
(1) AMOUNT OF DEPOSIT ACCOUNTS OF MORE THAN $100,000 ............................|-------------|2710 7,749,009 | M.1.b.(1)
(2) NUMBER OF DEPOSIT ACCOUNTS OF MORE THAN $100,000 ............................|2722 16,273 |/////////////////| M.1.b.(2)
|-------------|-----------------|
2. ESTIMATED AMOUNT OF UNINSURED DEPOSITS IN DOMESTIC OFFICES OF THE BANK:
a. AN ESTIMATE OF YOUR BANK'S UNINSURED DEPOSITS CAN BE DETERMINED BY MULIPLYING THE NOUMBER
OF DEPOSIT ACCOUNTS OF MORE THAN $100,000 REPORTED IN MEMORANDUM ITEM 1.B.(2) ABOVE BY $100,000
AND SUBTRACTING THE RESULT FROM THE AMOUNT FROM THE AMOUNT OF DEPOSIT ACCOUNTS OF MORE
THAN $100,000 REPORTED IN MEMORANDUM ITEM 1.b.(1) ABOVE. |-----------------|
| YES | NO |
|/////////////////|
INDICATE IN THE APPROPRIATE BOX AT THE RIGHT WHETHER YOUR BANK HAS A METHOD OR PROCEDURE FOR |/////////////////|
DETERMINING A BETTER ESTIMATE OF UNINSURED DEPOSITS THAN THE ESTIMATE DESCRIBED ABOVE |6661 0 | M.2.a.
|-----------------|
| Bil Mil Thou|
b. IF THE BOX MARKED YES HAS BEEN CHECKED, REPORT THE ESTIMATE OF UNINSURED DEPOSITS |-----------------|
DETERMINED BY USING YOUR BANK'S METHOD OR PROCEDURE...........................................|5597 | M.2.b.
|-----------------|
________________________________________________________________________________________________________________________
| C477 | <---
PERSON TO WHOM QUESTIONS ABOUT THE REPORT OF CONDITION AND INCOME SHOULD BE DIRECTED: |------------|
Karen Gatenby , Vice President (713) 216-5263
- ------------------------------------------ --------------------------
NAME AND TITLE (TEXT 8901) AREA CODE AND PHONE NUMBER
(TEXT 8902)
</TABLE>
<PAGE> 57
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-21
HOUSTON, TX 77252 (31)
SCHEDULE RC-R -RISK-BASED CAPITAL
THIS SCHEDULE MUST BE COMPLETED BY ALL BANKS AS FOLLOWS: BANKS THAT REPORTED
TOTAL ASSETS OF $1 BILLION OR MORE IN SCHEDULE RC, ITEM 12, FOR JUNE 30, 1990,
MUST COMPLETE ITEMS 2 THROUGH 9 AND MEMORANDUM ITEM 1. BANKS WITH ASSETS OF
LESS THAN $1 BILLION MUST COMPLETE ITEMS 1 THROUGH 3 BELOW OR SCHEDULE RC-R IN
ITS ENTIRETY, DEPENDING ON THEIR RESPONSE TO ITEM 1 BELOW.
<TABLE>
<S> <C> <C>
|-----------|
| C480 | <---
1. TEST FOR DETERMINING THE EXTENT TO WHICH SCHEDULE RC-R MUST BE COMPLETED. TO BE COMPETED ONLY BY |-----------|
BANKS WITH TOTAL ASSETS OF LESS THAN $1 BILLION. INDICATE IN THE APPROPRIATE BOX AT THE RIGHT | YES NO |
WHETHER THE BANK HAS TOTAL CAPITAL GREATER THAN OR EQUAL TO EIGHT PERCENT OF ADJUSTED TOTAL |-----------------|
ASSETS .........................................................................................|6056 0 | 1.
|-----------------|
</TABLE>
FOR PURPOSES OF THIS TEST, ADJUSTED TOTAL ASSETS EQUALS TOTAL ASSETS LESS
CASH, U.S. TREASURIES, U.S. GOVERNMENT AGENCY OBLIGATIONS, AND 80 PERCENT
OF U.S. GOVERNMENT-SPONSORED AGENCY OBLIGATIONS PLUS THE ALLOWANCE FOR LOAN
AND LEASE LOSSES AND SELECTED OFF-BALANCE SHEET ITEMS AS REPORTED ON
SCHEDULE RC-L (SEE INSTRUCTIONS).
IF THE BOX MARKED YES HAS BEEN CHECKED, THEN THE BANK ONLY HAS TO
COMPLETE ITEMS 2 AND 3 BELOW. IF THE BOX MARKED NO HAS BEEN CHECKED, THE
BANK MUST COMPLETE THE REMAINDER OF THIS THIS SCHEDULE.
A NO RESPONSE TO ITEM 1 DOES NOT NECESSARILY MEAN THAT THE BANK'S ACTUAL
RISK-BASED CAPITAL RATIO IS LESS THAN EIGHT PERCENT OR THAT THE BANK IS NOT
IN COMPLIANCE WITH THE RISK-BASED CAPITAL GUIDELINES.
<TABLE>
<CAPTION>
|-----------------|-----------------|
| (COLUMN A) | (COLUMN B) |
| SUBORDINATED | OTHER |
| DEBT (1) AND IN-| LIMITED-LIFE |
| TERMEDIATE TERM | CAPITAL |
ITEMS 2 AND 3 ARE TO BE COMPLETED BY ALL BANKS. | PREFERRED STOCK | INSTRUMENTS |
|-----------------|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Thou|RCFD Bil Mil Thou|
- ----------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
2. SUBORDINATE DEBT (1) AND OTHER LIMITED-LIFE CAPITAL INSTRUMENTS (ORIGINAL WEIG|/////////////////|/////////////////|
AVERAGE MATURITY OF AT LEAST FIVE YEARS) WITH A REMAINING MATURITY OF: |/////////////////|/////////////////|
a. ONE YEAR OR LESS...........................................................|3780 0 |3786 0 | 2.a.
b. OVER ONE YEAR THROUGH TWO YEARS............................................|3781 0 |3787 0 | 2.b.
c. OVER TWO YEARS THROUGH THREE YEARS.........................................|3782 0 |3788 0 | 2.c.
d. OVER THREE YEARS THROUGH FOUR YEARS........................................|3783 0 |3789 0 | 2.d.
e. OVER FOUR YEARS THROUGH FIVE YEARS.........................................|3784 35,000 |3790 0 | 2.e.
f. OVER FIVE YEARS............................................................|3785 310,000 |3791 0 | 2.f.
|-----------------|-----------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------------|
|RCFD Bil Mil Tho|
<S> <C> <C>
3. TOTAL QUALIFYING CAPITAL (I.E. TIER 1 AND TIER 2 CAPITAL) ALLOWABLE UNDER THE RISK-BASED |-----------------|
CAPITAL GUIDELINES..............................................................................|3792 1,705,882 | 3.
|-----------------|
</TABLE>
ITEMS 4-9 AND MEMORANDUM ITEM 1 ARE TO BE COMPLETED BY BANKS THAT ANSWERED NO TO
<TABLE>
<CAPTION>
ITEM 1 ABOVE AND BY BANKS WITH TOTAL ASSETS OF $1 BILLION OR MORE. |-----------------|-----------------|
| (COLUMN A) | (COLUMN B) |
|-----------------|-----------------|
DOLLAR AMOUNTS IN THOUSANDS |RCFD Bil Mil Tho|RCFD Bil Mil Tho|
- ----------------------------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
4. ASSETS AND CREDIT EQUIVALENT AMOUNTS OF OFF-BALANCE SHEET ITEMS ASSIGNED TO |/////////////////|/////////////////|
THE ZERO PERCENT RISK CATAGORY: |/////////////////|/////////////////|
a. ASSETS RECORDED ON THE BALANCE SHEET: |/////////////////|/////////////////|
(1) SECURITIES ISSUED BY, OTHER CLAIMS ON, AND CLAIMS UNCONDITIONALLY |/////////////////|/////////////////|
GUARANTEED BY, THE U.S. GOVERNMENT AND ITS AGENCIES AND OTHER OECD |/////////////////|/////////////////|
CENTRAL GOVERNMENTS....................................................|3794 1,118,237 |/////////////////| 4.a.(1)
(2) ALL OTHER..............................................................|3795 791,018 |/////////////////| 4.a.(2)
b. CREDIT EQIVALENT AMOUNT OF OFF-BALANCE SHEET ITEMS.........................|/////////////////|3796 23,603 | 4.b.
|-----------------|-----------------|
</TABLE>
_____________________
(1) EXCLUDE MANDATORY CONVERTIBLE DEBT REPORTED IN SCHEDULE RC-M, ITEM 7.e,
"TOTAL."
(2) DO NOT REPORT IN COLUMN B THE RISK-WEIGHTED AMOUNT OF ASSETS REPORTED IN
COLUMN A.
<PAGE> 58
CERT: 03263 00373 STBK 48-3926 12-31-93
TEXAS COMMERCE BANK NATIONAL ASSOCIATION FFIEC 031
P.O. BOX 2558 PAGE RC-22
HOUSTON, TX 77252 (32)
<TABLE>
<CAPTION>
|-----------------|-----------------|
| (COLUMN A) | (COLUMN B) |
| ASSETS | CREDIT EQUIV- |
| RECORDED | ALENT AMOUNT |
SCHEDULE RC-R --CONTINUED | ON THE | OF OFF-BALANCE |
| BALANCE SHEET | SHEET ITEMS (1) |
|-----------------|-----------------|
DOLLAR AMOUNTS IN THOUSANDS | Bil Mil Tho| Bil Mil Tho|
- ----------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
5. ASSETS AND CREDIT EQUIVALENT AMOUNTS OF OFF-BALANCE |/////////////////|/////////////////|
SHEET ITEMS ASSIGNED TO THE 20 PERCENT RISK CATAGORY: |/////////////////|/////////////////|
a. ASSETS RECORDED ON THE BALANCE SHEET: |/////////////////|/////////////////|
(1) CLAIMS CONDITIONALLY GUARANTEED BY THE U.S. GOVERN- |/////////////////|/////////////////|
MENT AND ITS AGENCIES AND OTHER OECD CENTRAL |/////////////////|/////////////////|
GOVERNMENTS..........................................|3798 872,310 |/////////////////| 5.a.(1)
(2) CLAIMS COLLATERALIZED BY SECURITIES ISSUED BY THE U.S|/////////////////|/////////////////|
GOVERNMENT AND ITS AGENCIES AND OTHER OECD CENTRAL |/////////////////|/////////////////|
GOVERNMENTS; BY SECURITIES ISSUED BY U.S. GOVERNMENT |/////////////////|/////////////////|
SPONSORED AGENCIES; AND BY CASH ON DEPOSIT...........|3799 208,157 |/////////////////| 5.a.(2)
(3) ALL OTHER............................................|3800 8,030,880 |/////////////////| 5.a.(3)
b. CREDIT EQUIVALENT AMOUNT OF OFF-BALANCE SHEET ITEMS......|/////////////////|3801 646,304 | 5.b.
6. ASSETS AND CREDIT EQUIVALENT AMOUNTS OF OFF-BALANCE |/////////////////|/////////////////|
SHEET ITEMS ASSIGNED TO THE 50 PERCENT RISK CATAGORY: |/////////////////|/////////////////|
a. ASSETS RECORDED ON THE BALANCE SHEET.....................|3802 533,086 |/////////////////| 6.a.
b. CREDIT EQUIVALENT AMOUNT OF OFF-BALANCE SHEET ITEMS......|/////////////////|3803 44,256 | 6.b.
7. ASSETS AND CREDIT EQUIVALENT AMOUNTS OF OFF-BALANCE |/////////////////|/////////////////|
SHEET ITEMS ASSIGNED TO THE 100 PERCENT RISK CATAGORY: |/////////////////|/////////////////|
a. ASSETS RECORDED ON THE BALANCE SHEET.....................|3804 10,160,621 |/////////////////| 7.a.
b. CREDIT EQUIVALENT AMOUNT OF OFF-BALANCE SHEET ITEMS......|/////////////////|3805 3,265,622 | 7.b.
8. ON-BALANCE SHEET VALUES (OR PORTIONS THEREOF) OF INTEREST |/////////////////|/////////////////|
RATE, FOREIGN EXCHANGE RATE, AND COMMODITY CONTRACTS WHICH |/////////////////|/////////////////|
HAVE A CAPITAL ASSESSMENT FOR THEIR OFF-BALANCE SHEET |/////////////////|/////////////////|
EXPOSURE UNDER THE RISK-BASED CAPITAL GUIDELINES AND THOSE |/////////////////|/////////////////|
CONTRACTS (E.G. FUTURES CONTRACTS) EXCLUDED FROM THE CALCU- |/////////////////|/////////////////|
LATION OF THE RISK-BASED CAPITAL RATIO (EXCLUDE MARGIN |/////////////////|/////////////////|
ACCOUNTS AND ACCRUED RECEIVABLES FROM THIS ITEM)............|3806 0 |/////////////////| 8.
9. TOTAL ASSETS RECORDED ON THE BALANCE SHEET (SUM OF ITEMS |/////////////////|/////////////////|
4.a, 5.a, 6.a, 7.a, AND 8, COLUMN A) (MUST EQUAL SCHEDULE |/////////////////|/////////////////|
RC, ITEM 12. PLUS ITEMS 4.b. AND 4.c. PLUS SCHEDULE RC-B, |/////////////////|/////////////////|
ITEM 6.a.(3), COLUMN A).....................................|3807 21,714,309 |/////////////////| 9.
|-----------------|-----------------|
</TABLE>
<TABLE>
<CAPTION>
|-----------------|-----------------|
MEMORANDUM | (COLUMN A) | (COLUMN B) |
| NOTIONAL | REPLACEMENT COST|
| PRINCIPAL VALUE | (MARKET VALUE) |
|-----------------|-----------------|
DOLLAR AMOUNTS IN THOUSANDS | Bil Mil Tho| Bil Mil Tho|
- ----------------------------------------------------------------|-----------------|-----------------|
<S> <C> <C> <C>
1. NOTIONAL PRINCIPAL VALUE AND REPLACEMENT COST OF INTEREST |/////////////////|/////////////////|
RATE AND FOREIGN EXCHANGE RATE CONTRACTS (IN COLUMN B, RE- |/////////////////|/////////////////|
PORT ONLY THOSE CONTRACTS WITH A POSITIVE REPLACEMENT COST):|/////////////////|/////////////////|
a. INTEREST RATE CONTRACTS (EXCLUDE FUTURES CONTRACTS)......|/////////////////|3808 245,348 | M.1.a.
(1) WITH A REMAINING MATURITY OF ONE YEAR OR LESS........|3809 1,194,899 |/////////////////| M.1.a.(1)
(2) WITH A REMAINING MATURITY OF OVER ONE YEAR...........|3810 4,854,651 |/////////////////| M.1.a.(2)
b. FOREIGN EXCHANGE RATE CONTRACTS(EXCLUDE CONTRACTS WITH |/////////////////|/////////////////|
AN ORIGINAL MATURITY OF 14 DAYS OR LESS AND FUTURES |/////////////////|/////////////////|
CONTRACTS)...............................................|/////////////////|3811 4,394 | M.1.b.
(1) WITH A REMAINING MATURITY OF ONE YEAR OR LESS........|3812 268,412 |/////////////////| M.1.b.(1)
(2) WITH A REMAINING MATURITY OF OVER ONE YEAR...........|3813 3,740 |/////////////////| M.1.b.(2)
|-----------------|-----------------|
</TABLE>
_____________________
(1) DO NOT REPORT IN COLUMN B THE RISK-WEIGHTED AMOUNT OF ASSETS REPORTED IN
COLUMN A.
<PAGE> 59
FDIC Certificate Number: 03263 FFIEC 031
Page RC-23
(33)
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on December 31, 1993
Texas Commerce Bank National Association Houston Texas
- -------------------------------------------- -------------- --------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along with
the publicly available data in the Reports of Condition and Income, in response
to any request for individual bank report data. However, the information
reported in column A and in all of Memorandum item 1 of Schedule RC-N is
regarded as confidential and will not be released to the public. BANKS CHOOSING
TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES NOT
CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK CUSTOMERS,
REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN SCHEDULE RC-N,
OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT
WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not to make a
statement may check the "No comment" box below and should make no entries of any
kind in the space provided for the narrative statement; i.e., DO NOT enter in
this space such phrases as "No statement," "Not applicable," "N/A," "No
comment," and "None."
The optional statement must be entered on this sheet. The statement
should not exceed 100 words. Further, regardless of the number of words, the
statement must not exceed 750 characters, including punctuation, indentation,
and standard spacing between words and sentences. If any submission should
exceed 750 characters, as defined, it will be truncated at 750 characters with
no notice to the submitting bank and the truncated statement will appear as the
bank's statement both on agency computerized records and in computer-file
releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.
If, subsequent to the original submission, material change are submitted
for the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release
to the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DIS CLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANGEMENT OF THE
REPORTING BANK.
- -------------------------------------------------------------- |C471|C472|<--
No comment / / (RCON 6979)
BANK MANAGEMENT STATEMENT (please type or print clearly).
(TEXT 6990)
During the fourth quarter of 1993, Texas Commerce Bank National Association
combined with the following banks: TCB-Austin, N.A.; TCB-Beaumont, N.A.;
TCB, National Association; TCB-El Paso, N.A.; TCB-Midland, N.A.;
TCB-New Braunfels, N.A.; TCB-Odessa, N.A.; TCB-Rio Grande Valley, N.A.;
and TCB-San Antonio, N.A. The Reports of Condition and Income for the
period ended December 31, 1993 are reported on a fully consolidated basis.
/s/ KENNETH L. TILTIN January 27, 19__
-------------------------------------- ------------------
SIGNATURE OF EXECUTIVE OFFICER OF BANK DATE OF SIGNATURE
<PAGE> 60
(34)
THIS PAGE IS TO BE COMPLETED BY NATIONAL BANKS ONLY
<TABLE>
<S> <C>
| OMB No. For OCC: 1557-0081
NAME AND ADDRESS OF BANK | OMB No. For FDIC: 3064-0052
| OMB No. for Federal Reserve: 7100-0036
CALL NO. 186 31 12-31-93 | EXPIRATION DATE: 02/28/93
CERT: 03263 00373 STBK 48-3926 |
| SPECIAL REPORT
TEXAS COMMERCE BANK NATIONAL ASSOCIA | (DOLLAR AMOUNTS IN THOUSANDS)
P.O. BOX 2558 |
HOUSTON, TX 77252 |--------------------------------------------------
|CLOSE OF BUSINENESS | FDIC CERTIFICATE NUMBER
|DATE |
| | |---------|
| 12-31-93 | 03263 | C-700 |<-
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
The following information is required by Public Law 90-44 and 102-242, but does
not constitute a part of the Report of Condition. With each Report of Condition,
these Laws require all banks to furnish a report of all loans or other
extensions of credit to their executive officers made SINCE THE DATE OF THE
PREVIOUS REPORT OF CONDITION. Data regarding individual loans or extensions of
credit are not required. If no such loans or other extensions of credit were
made during the period, insert "none" against subitem (a). (Exclude the first
$5,000 of indebtedness of each executive officer under bank credit card plan.)
See Sections 215.2 and 215.3 of Title 12 of the Code of Federal Regulations
(Federal Reserve Board Regulation O) for the definitions of "executive officer"
and "extension of credit, " respectively. Exclude loans and other extensions of
credit to directors and principal shareholders who are not executive officers.
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
a. Number of loans to executive officers since the previous Call Report Date...........| 3561 | 0 | a.
b. Total dollar amount of above loans (in thousands of dollars)........................| 3562 | 0 | b.
|RCFD| |RCFD| |
c. Range of interest charged on above loans (example 9 3/4% - 9.75)......|7701| 0.0 % to |7702| 0.0 % | c.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT |DATE (Month,Day,Year)
|
|
Kenneth L. Tilton, EVP & Controller | January 27, 1994
- --------------------------------------------------------------------------------------------------------------------
NAME AND TITLE OF PERSON TO WHOM INQUIRIES MAY BE DIRECTED (TEXT 8903) |AREA CODE/TELEPHONE NUMBER (TEXT 8904)
|
Karen Gatenby , Vice President | (713) 216-5263
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
FDIC 8040/53 (12-92)
