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Filed pursuant to 424(b)(2)
Registration No. 333-79733
PROSPECTUS
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STONE ENERGY CORPORATION
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$200,000,000
Debt Securities
Preferred Stock
Common Stock
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WE WILL PROVIDE SPECIFIC TERMS OF THESE OFFERINGS AND SECURITIES IN SUPPLEMENTS
TO THIS PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT TO THIS
PROSPECTUS CAREFULLY BEFORE YOU INVEST.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
June 9, 1999
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TABLE OF CONTENTS
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Page
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About this Prospectus.............................................................................................. 4
Where You Can Find
More Information................................................................................................... 4
The Company........................................................................................................ 5
Use of Proceeds.................................................................................................... 5
Ratios of Earnings to Fixed Charges
and Earnings to Fixed Charges Plus Dividends....................................................................... 6
Description of Debt Securities..................................................................................... 6
Description of Capital Stock....................................................................................... 18
Plan of Distribution............................................................................................... 24
Legal Matters...................................................................................................... 26
Experts............................................................................................................ 26
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf registration process, we may sell any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $200,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of the offering and the securities. The prospectus supplement
may also add, update or change information contained in this prospectus. Any
statement that we make in this prospectus will be modified or superseded by any
inconsistent statement made by us in a prospectus supplement. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the SEC located at
7 World Trade Center, Suite 1300, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain information
on the operation of the SEC's public reference room in Washington, D.C. by
calling the SEC at 1-800-SEC-0330. We also file such information with the New
York Stock Exchange. Such reports, proxy statements and other information may be
read and copied at 30 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents.
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The information incorporated by reference is an important part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all of
the securities or we terminate this offering:
o Our Annual Report on Form 10-K/A for the year ended December 31, 1998;
o Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
o Our Current Report on Form 8-K, filed May 24, 1999; and
o The description of our common stock contained in our Form 8-A dated
June 11, 1993.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address or telephone number:
Secretary
Stone Energy Corporation
625 E. Kaliste Saloom Road
Lafayette, Louisiana 70508
(318) 237-0410
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus, any prospectus
supplement or any document incorporated by reference is accurate as of any date
other than the date of those documents.
THE COMPANY
Stone Energy Corporation is an independent oil and gas company. We are
engaged in the acquisition, exploration, development and operation of oil and
gas properties onshore and offshore in the Gulf Coast Basin. Stone was
incorporated in Delaware in 1993 and has been a publicly held company since
1993. Stone and its predecessors have been active in the Gulf Coast Basin since
1973 which gives us extensive geophysical, technical and operational expertise
in this area.
Our corporate headquarters are located in Lafayette, Louisiana, where our
address is 625 E. Kaliste Saloom Road, Lafayette, Louisiana 70508 (telephone:
(318) 237-0410).
USE OF PROCEEDS
Unless otherwise provided in a prospectus supplement, we will use the net
proceeds from the sale of the securities offered by the prospectus and any
prospectus supplement for our general
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corporate purposes, which may include repayment of indebtedness, the financing
of capital expenditures, future acquisitions and additions to our working
capital.
RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES PLUS DIVIDENDS
A description of Stone's ratio of earnings to fixed charges or earnings to
combined fixed charges and preferred stock dividends, as applicable, on a
consolidated basis, will appear in an applicable prospectus supplement.
DESCRIPTION OF DEBT SECURITIES
Any debt securities issued using this prospectus ("Debt Securities") will
be our direct unsecured general obligations. The Debt Securities will be either
senior debt securities ("Senior Debt Securities") or subordinated debt
securities ("Subordinated Debt Securities").
The Senior Debt Securities and the Subordinated Debt Securities will be
issued under separate indentures between us and a U.S. banking institution (a
"Trustee"). The Trustee for each series of Debt Securities will be identified in
the applicable prospectus supplement. Senior Debt Securities will be issued
under a "Senior Indenture" and Subordinated Debt Securities will be issued under
a "Subordinated Indenture." Together the Senior Indenture and the Subordinated
Indenture are called "Indentures."
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series that is offered by a prospectus supplement
will be described in the prospectus supplement.
We have summarized selected provisions of the Indentures below. The summary
is not complete. The forms of the Indentures have been filed as exhibits to the
registration statement and you should read the Indentures for provisions that
may be important to you. In the Summary below, we have included references to
section numbers of the applicable Indentures so that you can easily locate these
provisions. Whenever we refer in this prospectus or in the prospectus supplement
to particular sections or defined terms of the Indentures, such sections or
defined terms are incorporated by reference herein or therein, as applicable.
Capitalized terms used in the summary have the meanings specified in the
Indentures.
GENERAL
The Indentures provide that Debt Securities in separate series may be
issued thereunder from time to time without limitation as to aggregate principal
amount. We may specify a maximum aggregate principal amount for the Debt
Securities of any series. (Section 301). We will determine the terms and
conditions of the Debt Securities, including the maturity, principal and
interest, but those terms must be consistent with the applicable Indenture.
The Senior Debt Securities will rank equally with all of our other senior
unsecured and unsubordinated debt ("Senior Debt"). The Subordinated Debt
Securities will be subordinated in
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right of payment to the prior payment in full of all of our Senior Debt as
described under "--Subordination of Subordinated Debt Securities" and in the
prospectus supplement applicable to any Subordinated Debt Securities.
A prospectus supplement and a supplemental indenture relating to any series
of Debt Securities being offered will include specific terms relating to the
offering, including the price or prices at which the Debt Securities to be
offered will be issued. These terms will include some or all of the following:
(1) the title of the Debt Securities;
(2) whether the Debt Securities are Senior Debt Securities or
Subordinated Debt Securities and, if Subordinated Debt Securities,
the subordination terms relating thereto;
(3) the total principal amount of the Debt Securities;
(4) the percentage of the principal amount at which the Debt
Securities will be issued and any payments due if the maturity of
the Debt Securities is accelerated;
(5) if convertible into Common Stock, the terms on which such Debt
Securities are convertible;
(6) the dates on which the principal of the Debt Securities will be
payable;
(7) the interest rate which the Debt Securities will bear and the
interest payment dates for the Debt Securities;
(8) the places where payments on the Debt Securities will be payable;
(9) any terms upon which the Debt Securities may be redeemed, in whole
or in part, at our option;
(10) any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the Debt Securities;
(11) any changes to or additional Events of Defaults or covenants
contained in the applicable Indenture;
(12) whether the Debt Securities are defeasible;
(13) any special tax implications of the Debt Securities, including
provisions for Original Issue Discount Securities, if offered; and
(14) any other terms of the Debt Securities not inconsistent with the
provisions of the Indenture. (Section 301).
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None of the Indentures limits the amount of Debt Securities that may be
issued. Each Indenture allows Debt Securities to be issued up to the principal
amount that may be authorized by us and may be in any currency or currency unit
designated by us.
If so provided in the applicable prospectus supplement, we may issue the
Debt Securities at a discount below their principal amount and pay less than the
entire principal amount of the Debt Securities upon declaration of acceleration
of their maturity ("Original Issue Discount Securities"). The applicable
prospectus supplement will describe all material U.S. federal income tax,
accounting and other considerations applicable to the Original Issue Discount
Securities.
Debt Securities of a series may be issued only in fully registered form
without coupons.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured senior obligations and will
rank equally with all other senior unsecured and unsubordinated debt. However,
the Senior Debt Securities will be subordinated in right of payment to all our
secured indebtedness to the extent of the value of the assets securing such
indebtedness. Except as provided in the applicable Senior Indenture or specified
in any authorizing resolution and/or supplemental indenture relating to a series
of Senior Debt Securities to be issued, no Senior Indenture will limit the
amount of additional indebtedness which may rank equally with the Senior Debt
Securities or the amount of indebtedness, secured or otherwise, which may be
incurred or preferred stock which may be issued by any of our Subsidiaries.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Payment of the principal, interest and any premium on the Subordinated Debt
Securities will, to the extent set forth in the Subordinated Indenture with
respect to each series of Subordinated Debt Securities, be subordinated in right
of payment to the prior payment in full of all of our Senior Debt, including the
Senior Debt Securities. The prospectus supplement relating to any Subordinated
Debt Securities will summarize the subordination provisions of the Subordinated
Indenture applicable to that series including:
o the applicability and effect of such provisions upon any payment or
distribution of our assets to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors or marshaling of assets or any bankruptcy, insolvency or
similar proceedings;
o the applicability and effect of such provisions in the event of
specified defaults with respect to any or certain Senior Debt,
including the circumstances under which and the periods in which we
will be prohibited from making payments on the Subordinated Debt
Securities; and
o the definition of Senior Debt applicable to the Subordinated Debt
Securities of that series.
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The prospectus supplement will also describe as of a recent date the approximate
amount of Senior Debt to which the Subordinated Debt Securities of that series
will be subordinated.
The failure to make any payment on any of the Subordinated Debt Securities
by reason of the subordination provisions of the Subordinated Indenture
described in the prospectus supplement will not be construed as preventing the
occurrence of an Event of Default with respect to the Subordinated Debt
Securities arising from any such failure to make payment.
The subordination provisions described above will not be applicable to
payments in respect of the Subordinated Debt Securities from a defeasance trust
established in connection with any defeasance or covenant defeasance of the
Subordinated Debt Securities as described under "-- Defeasance and Covenant
Defeasance."
FORM, EXCHANGE AND TRANSFER
The Debt Securities of each series will be issuable only in fully
registered form, without coupons. Unless otherwise indicated in the applicable
prospectus supplement, the securities will be issued in denominations of $1,000
each or multiples thereof. (Section 302).
At the option of the Holder, subject to the terms of the applicable
Indenture and the limitations applicable to Global Securities, Debt Securities
of each series will be exchangeable for other Debt Securities of the same series
of any authorized denomination and of a like tenor and aggregate principal
amount. (Section 305).
Subject to the terms of the applicable Indenture and the limitations
applicable to Global Securities, Debt Securities may be presented for exchange
as provided above or for registration of transfer (duly endorsed or with the
form of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by us for such
purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but we may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Security Registrar and any
other transfer agent initially designated by us for any Debt Securities will be
named in the applicable prospectus supplement. (Section 305). We may at any time
designate additional transfer agents or rescind the designation of any transfer
agent or approve a change in the office through which any transfer agent acts,
except that we will be required to maintain a transfer agent in each Place of
Payment for the Debt Securities of each series. (Section 1002).
If the Debt Securities of any series (or of any series and specified tenor)
are to be redeemed in part, we will not be required to (i) issue, register the
transfer of or exchange any Debt Security of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of any such
Debt Security that may be selected for redemption and ending at the close of
business on the day of such mailing or (ii) register the transfer of or exchange
any Debt Security so selected for redemption, in whole or in part, except the
unredeemed portion of any such Debt Security being redeemed in part. (Section
305).
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GLOBAL SECURITIES
Some or all of the Debt Securities of any series may be represented, in
whole or in part, by one or more global certificates which will have an
aggregate principal amount equal to that of the Debt Securities represented
thereby. Each Global Security will be registered in the name of a Depositary or
a nominee thereof identified in the applicable prospectus supplement, will be
deposited with such Depositary or nominee or a custodian therefor and will bear
a legend regarding the restrictions on exchanges and registration of transfer
thereof referred to below and any such other matters as may be provided for
pursuant to the applicable Indenture.
Notwithstanding any provision of the applicable Indenture or any Debt
Security described herein, no Global Security may be exchanged in whole or in
part for Debt Securities registered, and no transfer of a Global Security in
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or any nominee of such Depositary unless:
(i) the Depositary has notified us that it is unwilling or unable to
continue as Depositary for such Global Security or has ceased to be
qualified to act as such as required by the applicable Indenture;
(ii) there shall have occurred and be continuing an Event of Default
with respect to the Debt Securities represented by such Global Security; or
(iii) there shall exist such circumstances, if any, in addition to or
in lieu of those described above as may be described in the applicable
prospectus supplement.
All Debt Securities issued in exchange for a Global Security or any portion
thereof will be registered in such names as the Depositary may direct. (Sections
204 and 305).
As long as the Depositary, or its nominee, is the registered Holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Security and the Debt
Securities represented thereby for all purposes under the Debt Securities and
the applicable Indenture. Except in the limited circumstances referred to above,
owners of beneficial interests in a Global Security will not be entitled to have
such Global Security or any Debt Securities represented thereby registered in
their names, will not receive or be entitled to receive physical delivery of
certificated Debt Securities in exchange therefor and will not be considered to
be the owners or Holders of such Global Security or any Debt Securities
represented thereby for any purpose under the Debt Securities or the applicable
Indenture. All payments of principal of and any premium and interest on a Global
Security will be made to the Depositary or its nominee, as the case may be, as
the Holder thereof. The laws of some jurisdictions require that certain
purchasers of Debt Securities take physical delivery of such Debt Securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold
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beneficial interests through participants. In connection with the issuance of
any Global Security, the Depositary will credit, on its book-entry registration
and transfer system, the respective principal amounts of Debt Securities
represented by the Global Security to the accounts of its participants.
Ownership of beneficial interests in a Global Security will be shown only on,
and the transfer of those ownership interests will be effected only through,
records maintained by the Depositary (with respect to participants' interests)
or any such participant (with respect to interests of persons held by such
participants on their behalf). Payments, transfers, exchanges and other matters
relating to beneficial interests in a Global Security may be subject to various
policies and procedures adopted by the Depositary from time to time. None of us,
the Trustees or our agents will have any responsibility or liability for any
aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
Person in whose name such Debt Security (or one or more Predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest. (Section 307).
Unless otherwise indicated in the applicable prospectus supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as we
may designate for such purpose from time to time, except that at our option
payment of any interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register. Unless
otherwise indicated in the applicable prospectus supplement, the corporate trust
office of the trustee under the Senior Indenture in the City of New York will be
designated as sole Paying Agent for payments with respect to Senior Debt
Securities of each series and the corporate trust office of the Trustee in the
City of New York will be designated as the sole Paying Agent for payment with
respect to Subordinated Debt Securities of each series. Any other Paying Agents
initially designated by us for the Debt Securities of a particular series will
be named in the applicable prospectus supplement. We may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
we will be required to maintain a Paying Agent in each Place of Payment for the
Debt Securities of a particular series. (Section 1002).
All moneys paid by us to a Paying Agent for the payment of the principal of
or any premium or interest on any Debt Security which remain unclaimed at the
end of two years after such principal, premium or interest has become due and
payable will be repaid to us, and the Holder of such Debt Security thereafter
may look only to us for payment thereof. (Section 1003).
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into, or convey, transfer, sell or
lease our properties and assets substantially as an entirety to, any Person (a
"successor Person"), and may not permit
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any Person to merge into, or convey, transfer, sell or lease its properties and
assets substantially as an entirety to, us, unless:
(i) the successor Person (if any) is a corporation, partnership, trust
or other entity organized and validly existing under the laws of any
domestic jurisdiction and assumes our obligations on the Debt Securities
and under the Indentures;
(ii) immediately after giving effect to the 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; and
(iii) certain other conditions, including any additional conditions
with respect to any particular Debt Securities specified in the applicable
prospectus supplement, are met.
(Section 801).
EVENTS OF DEFAULT
Unless otherwise specified in the prospectus supplement, each of the
following will constitute an Event of Default under the applicable Indenture
with respect to Debt Securities of any series:
(1) failure to pay principal of or any premium on any Debt Security of
that series when due, whether or not, in the case of Subordinated Debt
Securities, such payment is prohibited by the subordination provisions of
the Subordinated Indenture;
(2) failure to pay any interest on any Debt Securities of that series
when due, continued for 30 days, whether or not, in the case of
Subordinated Debt Securities, such payment is prohibited by the
subordination provisions of the Subordinated Indenture;
(3) failure to deposit any sinking fund payment, when due, in respect
of any Debt Security of that series, whether or not, in the case of
Subordinated Debt Securities, such deposit is prohibited by the
subordination provisions of the Subordinated Indenture;
(4) failure to perform or comply with the provisions described under
"Consolidation, Merger and Sale of Assets;"
(5) failure to perform, or a breach of, any of our other covenants or
warranties in such Indenture (other than a covenant or warranty included in
such Indenture solely for the benefit of a series other than that series),
continued for 60 days after written notice has been given by the Trustee,
or the Holders of at least 25% in principal amount of the Outstanding Debt
Securities of that series, as provided in such Indenture;
(6) default under the terms of any instrument evidencing or securing
any of our Debt having an outstanding principal amount of $10 million
individually or in the aggregate which default results in the acceleration
of the payment of all or any portion of such Debt (which acceleration is
not rescinded within a period of 10 days from the occurrence of such
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acceleration) or constitutes the failure to pay all or any portion of the
principal amount of such Debt when due;
(7) the rendering of a final judgment or judgments (not subject to
appeal) against us in an amount in excess of $10 million which remains
undischarged or unstayed for a period of 60 days after the date on which
the right to appeal has expired;
(8) certain events of bankruptcy, insolvency or reorganization
affecting us; and
(9) any other Event of Default included in the applicable Indenture or
supplemental indenture. (Section 501).
If an Event of Default (other than an Event of Default described in clause
(8) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the applicable Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Indenture may declare the
principal amount of the Debt Securities of that series (or, in the case of any
Debt Security that is an Original Issue Discount Debt Security or the principal
amount of which is not then determinable, such portion of the principal amount
of such Debt Security, or such other amount in lieu of such principal amount, as
may be specified in the terms of such Debt Security) to be due and payable
immediately. If an Event of Default described in clause (8) above with respect
to the Debt Securities of any series at the time Outstanding shall occur, the
principal amount of all the Debt Securities of that series (or, in the case of
any such Original Issue Discount Security or other Debt Security, such specified
amount) will automatically, and without any action by the applicable Trustee or
any Holder, become immediately due and payable. After any such acceleration, but
before a judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal (or other
specified amount), have been cured or waived as provided in the applicable
Indenture. (Section 502). For information as to waiver of defaults, see
"Modification and Waiver."
Subject to the provisions of the Indentures relating to the duties of the
Trustees in case an Event of Default shall occur and be continuing, each Trustee
will be under no obligation to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to such Trustee reasonable indemnity. (Section
603). Subject to such provisions for the indemnification of the Trustees, the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of that series. (Section 512).
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture, or for the appointment
of a receiver or a trustee, or for any other remedy thereunder, unless:
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(i) such Holder has previously given to the Trustee under the
applicable Indenture written notice of a continuing Event of Default
with respect to the Debt Securities of that series;
(ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series have made written request,
and such Holder or Holders have offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee; and
(iii) the Trustee has failed to institute such proceeding, and has not
received from the Holders of a majority in aggregate principal amount
of the Outstanding Debt Securities of that series a direction
inconsistent with such request, within 60 days after such notice,
request and offer. (Section 507).
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date specified
in such Debt Security. (Section 508).
We will be required to furnish to each Trustee annually a statement by
certain of our officers as to whether or not we, to their knowledge, are in
default in the performance or observance of any of the terms, provisions and
conditions of the applicable Indenture and, if so, specifying all such known
defaults. (Section 1004).
MODIFICATION AND WAIVER
Modifications and amendments of the Indentures may be made by us and the
applicable Trustee without the consent of the Holders in certain limited
circumstances and with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment in the following circumstances:
(1) change the Stated Maturity of the principal of, or any instalment
of principal of or interest on, any Debt Security;
(2) reduce the principal amount of, or any premium or interest on, any
Debt Security;
(3) reduce the amount of principal of an Original Issue Discount
Security or any other Debt Security payable upon acceleration of the
Maturity thereof;
(4) change the place or currency of payment of principal of, or any
premium or interest on, any Debt Security;
(5) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security;
(6) in the case of Subordinated Debt Securities, modify the
subordination provisions in a manner adverse to the Holders of the
Subordinated Debt Securities;
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(7) if applicable, make any change that adversely affects the right to
convert any Debt Security or decrease the conversion rate or increase the
conversion price;
(8) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture;
(9) reduce the percentage in principal amount of Outstanding Debt
Securities of any series necessary for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults; or
(10) modify such provisions with respect to modification and waiver; or
(11) following the making of an offer to purchase Debt Securities
pursuant to a covenant in the Indenture, modify the provisions of the
Indenture with respect to such offer to purchase in a manner adverse to the
Holders. (Section 902)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by us with certain restrictive
provisions of the applicable Indenture. The Holders of a majority in principal
amount of the Outstanding Debt Securities of any series may waive any past
default under the applicable Indenture, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the
applicable Indenture which cannot be amended without the consent of the Holder
of each Outstanding Debt Security of such series affected. (Section 513).
The Indentures provide that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under such
Indenture as of any date:
(i) the principal amount of an Original Issue Discount Security that
will be deemed to be Outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration
of the Maturity thereof to such date;
(ii) if, as of such date, the principal amount payable at the Stated
Maturity of a Debt Security is not determinable (for example, because
it is based on an index), the principal amount of such Debt Security
deemed to be Outstanding as of such date will be an amount determined
in the manner prescribed for such Debt Security; and
(iii) the principal amount of a Debt Security denominated in one or
more foreign currencies or currency units that will be deemed to be
Outstanding will be the U.S. dollar equivalent, determined as of such
date in the manner prescribed for such Debt Security, of the principal
amount of such Debt Security (or, in the case of a Debt Security
described in clause (i) or (ii) above, of the amount described in such
clause).
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Certain Debt Securities, including those for whose payment or redemption money
has been deposited or set aside in trust for the Holders and those that have
been fully defeased pursuant to the provisions of the Indenture, will not be
deemed to be Outstanding. (Section 101).
Except in certain limited circumstances, we will be entitled to set any day
as a record date for the purpose of determining the Holders of Outstanding Debt
Securities of any series entitled to give or take any direction, notice,
consent, waiver or other action under the applicable Indenture, in the manner
and subject to the limitations provided in the Indenture. In certain limited
circum stances, the Trustee will be entitled to set a record date for action by
Holders. If a record date is set for any action to be taken by Holders of a
particular series, such action may be taken only by persons who are Holders of
Outstanding Debt Securities of that series on the record date. To be effective,
such action must be taken by Holders of the requisite principal amount of such
Debt Securities within a specified period following the record date. For any
particular record date, this period will be 180 days or such other period as may
be specified by us (or the Trustee, if it set the record date), and may be
shortened or lengthened (but not beyond 180 days) from time to time. (Section
104).
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable prospectus supplement, we
may elect, at our option at any time, to have the provisions of the Indenture,
relating to defeasance and discharge of indebtedness relating to defeasance of
certain restrictive covenants applied to the Debt Securities of any series, or
to any specified part of a series. (Section 1401).
Defeasance and Discharge. The Indentures provide that, upon our exercise of
our option (if any), we will be discharged from all our obligations, and, if
such Debt Securities are Subordinated Debt Securities, the provisions of the
Subordinated Indenture relating to subordination will cease to be effective,
with respect to such Debt Securities (except for certain obligations to exchange
or register the transfer of Debt Securities, to replace stolen, lost or
mutilated Debt Securities, to maintain paying agencies and to hold moneys for
payment in trust) upon the deposit in trust for the benefit of the Holders of
such Debt Securities of money or U.S. Government Obligations, or both, which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities in accordance with the terms of the applicable
Indenture and such Debt Securities. Such defeasance or discharge may occur only
if, among other things;
(i) we have delivered to the applicable Trustee an Opinion of Counsel
to the effect that we have received from, or there has been published by,
the United States Internal Revenue Service a ruling, or there has been a
change in tax law, in either case to the effect that Holders of such Debt
Securities will not recognize gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject
to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge were not to occur;
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(ii) no Event of Default or event that with the passing of time or the
giving of notice, or both, shall constitute an Event of Default shall have
occurred or be continuing;
(iii) such deposit, defeasance and discharge will not result in a
breach or violation of, or constitute a default under, any agreement or
instrument to which we are a party or by which we are bound;
(iv) in the case of Subordinated Debt Securities, at the time of such
deposit, no default in the payment of all or a portion of principal of (or
premium, if any) or interest on or other obligations in respect of any
Senior Debt of the Company shall have occurred and be continuing and no
other event of default with respect to any of our Senior Debt shall have
occurred and be continuing permitting, after notice or the lapse of time,
or both, the acceleration thereof; and
(v) we have delivered to the Trustee an Opinion of Counsel to the
effect that such deposit shall not cause the Trustee or the trust so
created to be subject to the Investment Company Act of 1940. (Sections 1402
and 1404).
Defeasance of Certain Covenants. The Indentures provide that, upon our
exercise of our option (if any), we may omit to comply with certain restrictive
covenants, including those that may be described in the applicable prospectus
supplement, the occurrence of certain Events of Default, which are described
above in clause (5) (with respect to such restrictive covenants) and clauses
(6), (7) and (9) under "Events of Default" and any that may be described in the
applicable prospectus supplement, will not be deemed to either be or result in
an Event of Default and, if such Debt Securities are Subordinated Debt
Securities, the provisions of the Subordinated Indenture relating to
subordination will cease to be effective, in each case with respect to such Debt
Securities. In order to exercise such option, we must deposit, in trust for the
benefit of the Holders of such Debt Securities, money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such Debt
Securities on the respective Stated Maturities in accordance with the terms of
the applicable Indenture and such Debt Securities. Such covenant defeasance may
occur only if we have delivered to the applicable Trustee an Opinion of Counsel
that in effect says that Holders of such Debt Securities will not recognize gain
or loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been the
case if such deposit and defeasance were not to occur and the requirements set
forth in clauses (ii), (iii), (iv) and (v) above are satisfied. If we exercise
this option with respect to any Debt Securities and such Debt Securities were
declared due and payable because of the occurrence of any Event of Default, the
amount of money and U.S. Government Obligations so deposited in trust would be
sufficient to pay amounts due on such Debt Securities at the time of their
respective Stated Maturities but may not be sufficient to pay amounts due on
such Debt Securities upon any acceleration resulting from such Event of Default.
In such case, we would remain liable for such payments. (Sections 1403 and
1404).
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NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register.
(Sections 101 and 106).
TITLE
We, the Trustees and any agent of us or a Trustee may treat the Person in
whose name a Debt Security is registered as the absolute owner of the Debt
Security (whether or not such Debt Security may be overdue) for the purpose of
making payment and for all other purposes. (Section 308).
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the law of the State of New York. (Section 112).
DESCRIPTION OF CAPITAL STOCK
As of March 31, 1999, our authorized capital stock was 30,000,000 shares.
Those shares consisted of: (a) 5,000,000 shares of preferred stock, none of
which were outstanding; and (b) 25,000,000 shares of common stock, of which
15,085,408 shares were outstanding.
COMMON STOCK
Listing
Our outstanding shares of common stock are listed on the New York Stock
Exchange under the symbol "SGY". Any additional common stock we issue will also
be listed on the NYSE.
Dividends
Subject to the rights of any series of preferred stock that we may issue,
the holders of common stock may receive dividends when declared by the Board of
Directors. Dividends may be paid in cash, stock or other form out of legally
available funds.
Fully Paid
All outstanding shares of common stock are fully paid and non-assessable.
Any additional common stock we issue will also be fully paid and non-assessable.
Voting Rights
Subject to any special voting rights of any series of preferred stock that
we may issue, in the future, the holders of common stock may vote one vote for
each share held in the election of directors and on all other matters voted upon
by our stockholders. Holders of common stock may not cumulate their votes in the
elections of directors.
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Other Rights
We will notify common shareholders of any shareholders' meetings according
to applicable law. If we liquidate, dissolve or wind-up our business, either
voluntarily or not, common shareholders will share equally in the assets
remaining after we pay our creditors and preferred shareholders. The holders of
common stock have no preemptive rights to purchase our shares of stock. Shares
of common stock are not subject to any redemption provisions and are not
convertible into any of our other securities.
PREFERRED STOCK
The following description of the terms of the preferred stock sets forth
certain general terms and provisions of our authorized preferred stock. If we
offer preferred stock, a description will be filed with the SEC and the specific
designations and rights will be described in the prospectus supplement,
including the following terms:
o the series, the number of shares offered and the liquidation value of
the preferred stock;
o the price at which the preferred stock will be issued;
o the dividend rate, the dates on which the dividends will be payable and
other terms relating to the payment of dividends on the preferred
stock;
o the liquidation preference of the preferred stock;
o the voting rights of the preferred stock;
o whether the preferred stock is redeemable or subject to a sinking fund,
and the terms of any such redemption or sinking fund;
o whether the preferred stock is convertible or exchangeable for any
other securities, and the terms of any such conversion; and
o any additional rights, preferences, qualifications, limitations and
restrictions of the preferred stock.
The description of the terms of the preferred stock to be set forth in an
applicable prospectus supplement will not be complete and will be subject to and
qualified in its entirety by reference to the statement of resolution relating
to the applicable series of preferred stock. The registration statement of which
this prospectus forms a part will include the statement of resolution as an
exhibit or incorporate it by reference.
Our Board of Directors can, without approval of shareholders, issue one or
more series of preferred stock. Subject to the provisions of our Certificate of
Incorporation and limitations prescribed by law, our Board of Directors may
adopt resolutions to determine the number of shares of each series and the
rights, preferences and limitations of each series including the
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dividend rights, voting rights, conversion rights, redemption rights and any
liquidation preferences of any wholly unissued series of preferred stock, the
number of shares constituting each series and the terms and conditions of issue.
Under certain circumstances, preferred stock could restrict dividend payments to
holders of our common stock.
Undesignated preferred stock may enable our Board of Directors to render
more difficult or to discourage an attempt to obtain control of us by means of a
tender offer, proxy contest, merger or otherwise, and to thereby protect the
continuity of our management. The issuance of shares of preferred stock may
adversely affect the rights of the holders of our common stock. For example, any
preferred stock issued may rank prior to our common stock as to dividend rights,
liquidation preference or both, may have full or limited voting rights and may
be convertible into shares of common stock. As a result, the issuance of shares
of preferred stock may discourage bids for our common stock or may otherwise
adversely affect the market price of our common stock or any existing preferred
stock.
The preferred stock will, when issued, be fully paid and non-assessable.
ANTI-TAKEOVER PROVISIONS
Certain provisions in our Certificate of Incorporation and Bylaws and our
shareholders' rights plan may encourage persons considering unsolicited tender
offers or other unilateral takeover proposals to negotiate with the Board of
Directors rather than pursue non-negotiated takeover attempts.
Classified Board of Directors and Limitations on Removal of Directors
Our Bylaws provide that the Board of Directors is divided into three
classes as nearly equal in number as possible. The directors of each class are
elected for three-year terms, and the terms of the three classes are staggered
so that directors from a single class are elected at each annual meeting of
stockholders. Directors can only be removed for cause. A staggered board makes
it more difficult for shareholders to change the majority of the directors and
instead promotes a continuity of existing management.
Stockholder Action by Unanimous Consent
Under the Delaware General Corporation Law, unless the certificate of
incorporation specifies otherwise, any action that could be taken by
stockholders at an annual or special meeting may be taken, instead, without a
meeting and without notice to or a vote of other stockholders if a consent in
writing is signed by holders of outstanding stock having voting power that would
be sufficient to take such action at a meeting at which all outstanding shares
were present and voted. Our Certificate of Incorporation provides that
stockholder action may be taken only at an annual or special meeting of
stockholders or by unanimous written consent. As a result, stockholders may not
act upon any matter except at a duly called meeting or by unanimous written
consent.
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Blank Check Preferred Stock
Our Certificate of Incorporation authorizes the issuance of blank check
preferred stock. The Board of Directors can set the voting rights, redemption
rights, conversion rights and other rights relating to such preferred stock and
could issue such stock in either private or public transactions. In some
circumstances, the blank check preferred stock could be issued and have the
effect of preventing a merger, tender offer or other takeover attempt which the
Board of Directors opposes.
Business Combinations Under Delaware Law
We are a Delaware corporation and are subject to Section 203 of the
Delaware General Corporation Law. Section 203 prevents a person who owns 15% or
more of our outstanding voting stock (an "interested stockholder") from engaging
in certain business combinations with us for three years following the date that
the person became an interested stockholder. These restrictions do not apply if:
o before the person became an interested stockholder, our Board of
Directors approved the transaction in which the interested stockholder
became an interested stockholder or the business combination;
o upon completion of the transaction that resulted in the interested
stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of our outstanding voting stock at the
time the transaction commenced, excluding stock held by directors who
are also officers of the corporation and stock held by certain employee
stock plans; or
o following the transaction in which the person became an interested
stockholder, the business combination is approved by both our Board of
Directors and the holders of at least two-thirds of our outstanding
voting stock not owned by the interested stockholder.
These restrictions do not apply to certain business combinations proposed
by an interested stockholder following the announcement of certain extraordinary
transactions involving us and a person who was not an interested stockholder
during the previous three years or who became an interested stockholder with the
approval of a majority of our directors, if that extraordinary transaction is
approved or goes unopposed by a majority of our directors who were directors
before any person became an interested stockholder in the previous three years
or who were recommended for election or elected to succeed such directors by a
majority of such directors then in office.
Section 203 defines a "business combination" to include (i) any merger or
consolidation involving the corporation and an interested stockholder, (ii) any
sale, transfer, pledge or other disposition involving an interested stockholder
of 10% or more of the assets of the corporation; (iii) subject to certain
exceptions, any transaction which results in the issuance or transfer by the
corporation of any stock of the corporation to an interested stockholder, (iv)
any transaction involving the corporation which has the effect of increasing the
proportionate share of the stock
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of any class or series of the corporation beneficially owned by the interested
stockholder or (v) the receipt by an interested stockholder of any loans,
guarantees, pledges or other financial benefits provided by or through the
corporation.
Rights Plan
Our Board of Directors has adopted a stockholders' rights plan (the "Rights
Plan"). Under the Rights Plan, each Right entitles the registered holder under
the circumstances described below to purchase from us one one-thousandth of a
share of our Junior Participating Preferred Stock (the "Preferred Shares") at a
price of $125.00 per one one-thousandth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The following is a summary of certain terms of
the Rights Plan. The Rights Plan is filed as an exhibit to the registration
statement of which this prospectus is a part and this summary is qualified by
reference to the specific terms of the Rights Plan.
Until the Distribution Date (as defined below), the Rights attach to all
common stock certificates representing outstanding shares. No separate Right
Certificate will be distributed. A Right is issued for each share of common
stock issued. The Rights will separate from the common stock and a Distribution
Date will occur upon the earlier of
o 10 business days following a public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 15% or more of our outstanding Voting
Shares (as defined in the Rights Agreement), or
o 10 business days following the commencement or announcement of an
intention to commence a tender offer or exchange offer the consummation
of which would result in the person or group beneficially owning 15% or
more of our outstanding Voting Shares.
Until the Distribution Date or the earlier of redemption or expiration of
the Rights, the Rights are evidenced by the certificates representing the common
stock. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Rights Certificates") will be mailed to
holders of record of the common stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The rights will
expire on September 30, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged.
If a person or group acquires 15% or more of our Voting Shares, each Right
then outstanding (other than Rights beneficially owned by the Acquiring Persons
which would become null and void) becomes a right to buy that number of shares
of common stock (or under certain circumstances, the equivalent number of one
one-thousandths of a Preferred Share) that at the time of such acquisition has a
market value of two times the Purchase Price of the Right.
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If we are acquired in a merger or other business combination transaction or
assets constituting more than 50% of our consolidated assets or producing more
than 50% of our earning power or cash flow are sold, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction has a market value of two times the Purchase Price of the
Right.
The dividend and liquidation rights, and the non-redemption feature, of the
Preferred Shares are designed so that the value of one one-thousandth of a
Preferred Share purchasable upon exercise of each Right will approximate the
value of one share of common stock. The Preferred Shares issuable upon exercise
of the Rights will be non-redeemable and rank junior to all other series of our
preferred stock. Each whole Preferred Share will be entitled to receive a
quarterly preferential dividend in an amount per share equal to the greater of
(i) $1.00 in cash, or (ii) in the aggregate, 1,000 times the dividend declared
on the common stock, subject to adjustment. In the event of liquidation, the
holders of Preferred Shares may receive a preferential liquidation payment equal
to the greater of (i) $1,000 per share, or (ii) in the aggregate, 1,000 times
the payment made on the shares of common stock. In the event of any merger,
consolidation or other transaction in which the shares of common stock are
exchanged for or changed into other stock or securities, cash or other property,
each whole Preferred Share will be entitled to receive 1,000 times the amount
received per share of common stock. Each whole Preferred Share will be entitled
to 1,000 votes on all matters submitted to a vote of our stockholders and
Preferred Shares will generally vote together as one class with the common stock
and any other capital stock on all matters submitted to a vote of our
stockholders.
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share or other securities or property issuable upon exercise of the
Rights, and the Purchase Price payable, may be adjusted from time to time to
prevent dilution.
At any time after a person or group of affiliated or associated persons
acquires beneficial ownership of 15% or more of our outstanding Voting Shares
and before a person or group acquires beneficial ownership of 50% or more of our
outstanding Voting Shares our Board of Directors may, at its option, issue
common stock in mandatory redemption of, and in exchange for, all or part of the
then outstanding and exercisable Rights (other than Rights owned by such person
or group which would become null and void) at an exchange ratio of one share of
common stock for each Right, subject to adjustment.
At any time prior to the first public announcement that a person or group
has become the beneficial owner of 15% or more of the outstanding Voting Shares,
our Board of Directors may redeem all but not less than all the then outstanding
Rights at a price of $0.01 per Right (the "Redemption Price"). The redemption of
the rights may be made effective at such time, on such basis and with such
conditions as our Board of Directors in its sole discretion may establish.
Immediately upon the action of our Board of Directors ordering redemption of the
rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
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LIMITATION OF LIABILITY OF OFFICERS AND DIRECTORS
Delaware law authorizes corporations to limit or eliminate the personal
liability of officers and directors to corporations and their stockholders for
monetary damages for breach of officers' and directors' fiduciary duty of care.
The duty of care requires that, when acting on behalf of the corporation,
officers and directors must exercise an informed business judgment based on all
material information reasonably available to them. Absent the limitations
authorized by Delaware law, officers and directors are accountable to
corporations and their stockholders for monetary damages for conduct
constituting gross negligence in the exercise of their duty of care. Delaware
law enables corporations to limit available relief to equitable remedies such as
injunction or rescission.
Our Certificate of Incorporation limits the liability of our officers and
directors to us and our stockholders to the fullest extent permitted by Delaware
law. Specifically, our officers and directors will not be personally liable for
monetary damages for breach of an officer's or director's fiduciary duty in such
capacity, except for liability
o for any breach of the officer's or director's duty of loyalty to us or our
stockholders,
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
o for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation
law, or
o for any transaction from which the officer or director derived an improper
personal benefit.
The inclusion of this provision in our Certificate of Incorporation may
reduce the likelihood of derivative litigation against our officers and
directors, and may discourage or deter stockholders or management from bringing
a lawsuit against our officers and directors for breach of their duty of care,
even though such an action, if successful, might have otherwise benefitted us
and our stockholders. Both our Certificate of Incorporation and Bylaws provide
indemnification to our officers and directors and certain other persons with
respect to certain matters to the maximum extent allowed by Delaware law as it
exists now or may hereafter be amended. These provisions do not alter the
liability of officers and directors under federal securities laws and do not
affect the right to sue (nor to recover monetary damages) under federal
securities laws for violations thereof.
TRANSFER AGENT AND REGISTRAR
Our transfer agent and registrar of the common stock, as well as the rights
agent under our Rights Plan, is ChaseMellon Shareholder Services, L.L.C.
PLAN OF DISTRIBUTION
We may sell securities pursuant to this prospectus (a) through agents; (b)
through underwriters or dealers; or (c) directly to one or more purchasers,
including existing shareholders in a rights offering.
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BY AGENTS
Securities offered by us pursuant to this prospectus may be sold through
agents designated by us. Unless otherwise indicated in the prospectus
supplement, any such agent is acting on a best efforts basis for the period of
its appointment.
BY UNDERWRITERS
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the securities will be
subject to certain conditions. Unless otherwise indicated in the prospectus
supplement, the underwriters must purchase all the securities of the series
offered by a prospectus supplement if any of the securities are purchased. Any
initial public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
DIRECT SALES; RIGHTS OFFERINGS
Securities offered by us pursuant to this prospectus may also be sold
directly by us. In this case, no underwriters or agents would be involved. We
may sell offered securities upon the exercise of rights which may be issued to
our securityholders.
DELAYED DELIVERY ARRANGEMENTS
We may authorize agents, underwriters or dealers to solicit offers by
certain institutional investors to purchase offered securities providing for
payment and delivery on a future date specified in the prospectus supplement.
Institutional investors to which such offers may be made, when authorized,
include commercial and savings banks, insurance companies, pension funds,
investment companies, education and charitable institutions and such other
institutions as may be approved by us. The obligations of any such purchasers
under such delayed delivery and payment arrangements will be subject to the
condition that the purchase of the offered securities will not at the time of
delivery be prohibited under applicable law. The underwriters and such agents
will not have any responsibility with respect to the validity or performance of
such contracts.
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution of
the offered securities may be underwriters as defined in the Securities Act, and
any discounts or commissions received by them from us and any profit on the
resale of the offered securities by them may be treated as underwriting
discounts and commissions under the Securities Act. Any underwriters or agents
will be identified and their compensation described in a prospectus supplement.
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The securities (other than common stock) offered in this prospectus and any
prospectus supplement, when first issued, will have no established trading
market. Any underwriters or agents to or through whom such securities are sold
by us for public offering and sale may make a market in such securities, but
such underwriters or agents will not be obligated to do so and may discontinue
any market making at any time without notice. We cannot assure you as to the
liquidity of the trading market for any such securities.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
businesses.
LEGAL MATTERS
Our counsel, Vinson & Elkins L.L.P., New York, New York, will pass upon
certain legal matters in connection the offered securities. Any underwriters
will be advised about other issues relating to any offering by their own legal
counsel.
EXPERTS
The audited financial statements as of December 31, 1998 and 1997 and for
each of the three years in the period ended December 31, 1998, incorporated by
reference in this prospectus and elsewhere in the registration statement, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
Atwater Consultants, Ltd. and Cawley, Gillespie & Associates, Inc.,
independent oil and gas consultants, prepared the reserve information, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. This reserve information is incorporated by reference herein in
reliance upon the authority of said firm as experts with respect to such
reports.
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