<PAGE> 1
As filed with the Securities and Exchange Commission on August 27, 1999
Registration No. 333-81583
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
NEWFIELD EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 72-1133047
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
363 N. SAM HOUSTON PARKWAY E., TERRY W. RATHERT
SUITE 2020 VICE PRESIDENT-PLANNING AND
HOUSTON, TEXAS 77060 ADMINISTRATION AND SECRETARY
(281) 847-6000 363 N. SAM HOUSTON PARKWAY E.,
(Address, including zip code, and telephone number, SUITE 2020
including area code, of registrant's principal executive offices) HOUSTON, TEXAS 77060
(281) 847-6000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
</TABLE>
Copy to:
JAMES H. WILSON
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
HOUSTON, TEXAS 77002-6760
(713) 758-2222
(713) 758-2346 (FAX)
---------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
FILES 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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
EXPLANATORY NOTE
This registration statement consists of two separate prospectuses covering
registration of the offering, issuance and sale of:
(1) debt securities, preferred stock, depositary shares, common stock
and securities warrants of Newfield Exploration Company; and
(2) common stock of Newfield Exploration Company that may be issued
and sold under a sales agency agreement that Newfield Exploration
Company will enter into with PaineWebber Incorporated.
<PAGE> 3
PROSPECTUS
Newfield Exploration Company
363 N. Sam Houston Parkway E.,
Suite 2020
Houston, Texas 77060
(281) 847-6000
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
SECURITIES WARRANTS
--------------------------------------------------------------------
We may offer and sell the securities listed above with an aggregate offering
price up to $275 million in connection with this prospectus. 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.
--------------------------------------------------------------------
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.
This prospectus is dated August 27, 1999.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ABOUT THIS PROSPECTUS.....................................................2
WHERE YOU CAN FIND
MORE INFORMATION.....................................................2
CAUTIONARY STATEMENT ABOUT
FORWARD-LOOKING STATEMENTS...........................................3
THE COMPANY...............................................................3
USE OF PROCEEDS...........................................................4
RATIOS OF EARNINGS TO
FIXED CHARGES........................................................4
DESCRIPTION OF DEBT SECURITIES............................................4
DESCRIPTION OF CAPITAL STOCK..............................................9
DESCRIPTION OF DEPOSITARY
SHARES..............................................................14
DESCRIPTION OF
SECURITIES WARRANTS.................................................16
PLAN OF DISTRIBUTION.....................................................17
LEGAL MATTERS............................................................18
EXPERTS..................................................................18
</TABLE>
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 $275 million. 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 to be sold. 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 our company in a prospectus
supplement. You should read both this prospectus and any prospectus supplement
together with the additional information described in the following section.
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.
Our common stock is listed on the New York Stock Exchange under the symbol
"NFX." Our reports, proxy statements and other information may be read and
copied at the New York Stock Exchange at 30 Broad Street, New York, New
York 10005.
The SEC allows our company 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. 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 until we terminate
this offering:
o our Annual Report on Form 10-K for the year ended December 31, 1998;
- 2 -
<PAGE> 5
o our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999 and June 30, 1999;
o our Current Reports on Form 8-K, filed on February 18, 1999, August
13, 1999 and August 16, 1999;
o the description of our common stock contained in our Form 8-A filed on
November 4, 1993; and
o the description of our preferred share purchase rights contained in
our Form 8-A filed on February 18, 1999.
You may request a copy of these filings at no cost, by writing our company
at the following address or telephoning our company at the following number:
Newfield Exploration Company
Attention: Stockholder Relations
363 N. Sam Houston Parkway E.,
Suite 2020
Houston, Texas 77060
(281) 847-6000
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.
CAUTIONARY STATEMENT ABOUT
FORWARD-LOOKING STATEMENTS
This prospectus and the documents we incorporate by reference contain
statements that constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. These statements appear in a number of places in this prospectus and the
documents we incorporate by reference and include statements regarding our
plans, beliefs or current expectations, including those plans, beliefs and
expectations of our officers and directors.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, any such forward-looking statements
are not assurances of future performance and involve risks and uncertainties.
Actual results may differ materially from anticipated results for a number of
reasons, including:
o drilling results;
o oil and gas prices;
o industry conditions;
o the prices of goods and services;
o the availability of drilling rigs and other support services; and
o the availability of capital resources.
The information contained in this prospectus, and the documents
incorporated by reference into this prospectus, identify additional factors
that could affect our operating results and performance. We urge you to
carefully consider those factors.
All forward-looking statements attributable to our company are expressly
qualified in their entirety by this cautionary statement.
THE COMPANY
Newfield Exploration Company is an independent oil and gas company. We are
engaged in the exploration, development and acquisition of oil and gas
properties located primarily in the Gulf of Mexico. We also have operations
onshore in the Gulf Coast and offshore Australia and China. We discovered and
acquired our first oil and gas reserves in 1990 and have grown rapidly since
that time. At December 31, 1998, we had proved reserves equal to the equivalent
of 513 billion cubic feet of natural gas. At such date, approximately 82% of our
proved reserves were natural gas and approximately 93% were proved developed.
Our strategy is to continue to expand our reserve base and increase our
cash flow through
- 3 -
<PAGE> 6
exploration and the acquisition and exploitation of proved properties. We
emphasize the following elements in implementing this strategy:
o reserve growth through exploratory drilling of a balanced portfolio;
o balance between exploration and acquisition and exploitation of proved
properties;
o geographic focus;
o control of operations and costs;
o use of 3-D seismic and other advanced technology; and
o equity ownership and other incentives to retain and attract employees.
Our principal executive offices are located at 363 N. Sam Houston Parkway
E., Suite 2020, Houston, Texas 77060, and our telephone number at our offices
is (281) 847-6000.
USE OF PROCEEDS
Unless otherwise provided in a prospectus supplement, we will use the net
proceeds from the sale of the securities offered by this prospectus and any
prospectus supplement for general 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
The following table contains our consolidated ratios of earnings to fixed
charges and earnings to fixed charges plus dividends for the periods indicated.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------- --------
1994 1995 1996 1997 1998 1999
----------------------------------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges........ 31.2x 24.1x 28.4x 9.5x (1) 1.8x
Ratio of earnings to
fixed charges plus
dividends............ 31.2x 24.1x 28.4x 9.5x (1) 1.8x
</TABLE>
- ---------------
(1) We had a loss for the year ended December 31, 1998 for purposes
of computing these ratios. Earnings for that year were insufficient to
cover fixed charges by approximately $88.4 million.
For purposes of computing the ratios of earnings to fixed charges and
earnings to fixed charges plus dividends: (1) earnings consist of income before
income taxes plus fixed charges, excluding capitalized interest, and (2) fixed
charges consist of interest expense and the estimated interest component of
rent expense. There were no dividends paid or accrued during the periods
presented above.
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 our company 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.
- 4 -
<PAGE> 7
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 this summary have the
meanings specified in the Indentures.
GENERAL
The Indentures provide that Debt Securities in separate series may be
issued 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 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 related 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:
o the title of the Debt Securities;
o whether the Debt Securities are Senior Debt Securities or Subordinated
Debt Securities;
o the total principal amount of the Debt Securities;
o the dates on which the principal of the Debt Securities will be
payable;
o the interest rate of the Debt Securities and the interest payment
dates for the Debt Securities;
o the places where payments on the Debt Securities will be payable;
o any terms upon which the Debt Securities may be redeemed at our
option;
o any sinking fund or other provisions that would obligate our company
to repurchase or otherwise redeem the Debt Securities;
o whether the Debt Securities are defeasible;
o any addition to or change in the Events of Default;
o if convertible into our common stock or any of our other securities,
the terms on which such Debt Securities are convertible;
o any addition to or change in the covenants in the applicable
Indenture; and
o any other terms of the Debt Securities not inconsistent with the
provisions of the applicable Indenture. (Section 301)
The Indentures do not limit the amount of Debt Securities that may be
issued. Each Indenture allows Debt Securities to be issued up
- 5 -
<PAGE> 8
to the principal amount that may be authorized by our company 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 Original Issue Discount
Securities.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured senior obligations and will
rank equally with all other senior unsecured and unsubordinated debt. The
Senior Debt Securities will, however, 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 or supplemental indenture relating to a
series of Senior Debt Securities to be issued, no Senior Indenture will limit
the amount of additional indebtedness that may rank equally with the Senior
Debt Securities or the amount of indebtedness, secured or otherwise, that may
be incurred or preferred stock that may be issued by any of our subsidiaries.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Under the Subordinated Indenture, payment of the principal, interest and
any premium on the Subordinated Debt Securities will generally be subordinated
in right of payment to the prior payment in full of all of our Senior Debt,
including any 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,
bankruptcy, insolvency or similar proceedings;
o the applicability and effect of such provisions in the event of
specified defaults with respect to 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.
The failure to make any payment on any of the Subordinated Debt Securities
due to the subordination provisions of the Subordinated Indenture described in
the prospectus supplement will not prevent the occurrence of an Event of
Default under the Subordinated Debt Securities.
CONVERSION RIGHTS
The Debt Securities may be converted into other securities of our company,
if at all, according to the terms and conditions of an applicable prospectus
supplement. Such terms will include the conversion price, the conversion
period, provisions as to whether conversion will be at the option of the
holders of such series of Debt Securities or at the option of our company, the
events requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such series of Debt Securities.
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)
Subject to the terms of the applicable Indenture and the limitations
applicable to global
- 6 -
<PAGE> 9
securities, Debt Securities may be transferred or exchanged at the corporate
trust office of the Trustee or at any other office or agency maintained by our
company for such purpose, without the payment of any service charge except for
any tax or governmental charge. (Sections 305 and 1002)
GLOBAL SECURITIES
The Debt Securities of any series may be issued, in whole or in part, by
one or more global certificates that will be deposited with a depositary
identified in the applicable prospectus supplement.
No global security may be exchanged in whole or in part for Debt
Securities registered in the name of any person other than the depositary for
such global security or any nominee of such depositary unless:
o the depositary is unwilling or unable to continue as depositary;
o an Event of Default has occurred and is continuing; or
o as otherwise provided in a prospectus supplement.
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company ("DTC") will act as depository. Beneficial interests in global
certificates will be shown on, and transfers of global certificates will be
affected only through records maintained by DTC and its participants.
PAYMENT
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 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 interest and any premium on the Debt Securities will be paid at
designated places. However, at our option, payment may be made by check mailed
to the persons in whose names the Debt Securities are registered on days
specified in the Indenture or any prospectus supplement. (Sections 1002 and
1003)
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may consolidate with or merge into, or sell or lease substantially all
of our properties to any person if:
o 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;
o 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
o any other conditions 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 ("Event of Default") under the
Indentures:
o failure to pay principal or premium on any Debt Security of that
series when due;
o failure to pay any interest on any Debt Security of that series when
due, continued for 30 days;
o failure to deposit any sinking fund payment, when due, on any Debt
Security of that series;
- 7 -
<PAGE> 10
o failure to perform any other covenant or the breach of any warranty in
the Indenture for 90 days after being given written notice;
o certain events of bankruptcy, insolvency or reorganization affecting
us; and
o any other Event of Default included in the applicable Indenture or
supplemental indenture. (Section 501)
If an Event of Default (other than as a result of bankruptcy, insolvency
or reorganization) for any series of Debt Securities occurs and continues, the
Trustee or the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of that series may declare the principal amount of
the Debt Securities of that series (or, such portion of the principal amount of
such Debt Securities, as may be specified in a prospectus supplement) to be due
and payable immediately. If an Event of Default results from bankruptcy,
insolvency or reorganization, the principal amount of all the Debt Securities
of a series (or, such portion of the principal amount of such Debt Securities
as may be specified in a prospectus supplement) will automatically become
immediately due and payable. If an acceleration occurs, subject to certain
conditions, the holders of a majority of the aggregate principal amount of the
Debt Securities of that series can rescind the acceleration. (Section 502)
Other than its duties in case of an Event of Default, a Trustee is not
obligated to exercise any of its rights or powers under the applicable
Indenture at the request of any of the holders, unless the holders offer the
Trustee reasonable indemnity. (Section 603) Subject to the indemnification of
the Trustees, the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of any series may 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)
The holders of Debt Securities of any series will not have any right to
institute any proceeding with respect to the applicable Indenture, unless:
o the holder has given written notice to the Trustee of an Event of
Default;
o 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
o the Trustee fails 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)
Such limitations do not apply, however, to a suit instituted by a holder
of a Debt Security for the enforcement of payment of the principal, interest or
premium 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 within 120 days of
the end of each fiscal year a statement by certain of our officers as to
whether or not we are in default in the performance of any of the terms of the
applicable Indenture. (Section 1004)
MODIFICATION AND WAIVER
Under each Indenture, our rights and obligations and the rights of holders
may be modified with the consent of the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of each series
- 8 -
<PAGE> 11
affected by the modification. No modification of the principal or interest
payment terms, and no modification reducing the percentage required for
modifications, is effective against any holder without its consent.
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
Indentures, relating to defeasance and discharge of indebtedness and to
defeasance of certain restrictive covenants, applied to the Debt Securities of
any series, or to any specified part of a series. (Section 1301)
Defeasance and Discharge. The Indentures provide that, upon the exercise
of our option (if any), we will be discharged from all our obligations with
respect to the applicable Debt Securities 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. Any additional conditions to
the discharge of our obligations with respect to a series of Debt Securities
will be described in an applicable prospectus supplement.
Defeasance of Certain Covenants. The Indentures provide that, upon the
exercise of our option (if any), we may omit to comply with certain restrictive
covenants described in an applicable prospectus supplement, the occurrence of
certain Events of Default as described in an 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. Any additional conditions to exercising this option with
respect to a series of Debt Securities will be described in an applicable
prospectus supplement. (Sections 1303 and 1304)
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 ours 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
Pursuant to our certificate of incorporation, our authorized capital stock
consists of 100,000,000 shares of common stock and 5,000,000 shares of
preferred stock. As of July 30, 1999, we had 41,482,069 shares of common stock
outstanding, and no shares of preferred stock outstanding.
- 9 -
<PAGE> 12
COMMON STOCK
Our common stockholders are entitled to one vote per share in the election
of directors and on all other matters submitted to a vote of our common
stockholders. Our common stockholders do not have cumulative voting rights.
Our common stockholders are entitled to receive ratably any dividends
declared by our board of directors out of funds legally available for the
payment of dividends. Dividends on our common stock are, however, subject to
any preferential dividend rights of outstanding preferred stock. We do not
intend to pay cash dividends on our common stock in the foreseeable future.
Upon our liquidation, dissolution or winding up, our common stockholders are
entitled to receive ratably our net assets available after payment of all of
our debts and other liabilities. Any payment is, however, subject to the prior
rights of any outstanding preferred stock. Our common stockholders do not have
any preemptive, subscription, redemption or conversion rights.
PREFERRED STOCK
The following summary describes certain general terms of our authorized
preferred stock. If we offer preferred stock, a description will be filed with
the SEC and the specific terms of the preferred stock 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.
Our certificate of incorporation allows our board of directors to issue
preferred stock from time to time in one or more series, without any action
being taken by our stockholders. Subject to the provisions of our certificate
of incorporation and limitations prescribed by law, our board of directors may
adopt resolutions to issue shares of a series of our preferred stock, and
establish their terms. These terms may include:
o voting powers;
o designations;
o preferences;
o dividend rights;
o dividend rates;
o terms of redemption;
o redemption process;
o conversion rights; and
o any other terms permitted to be established by our certificate of
incorporation and by applicable law.
The preferred stock will, when issued, be fully paid and non-assessable.
- 10 -
<PAGE> 13
ANTI-TAKEOVER PROVISIONS
Certain provisions in our certificate of incorporation and bylaws may
encourage persons considering unsolicited tender offers or other unilateral
takeover proposals to negotiate with our board of directors rather than pursue
non-negotiated takeover attempts.
Stockholder Action by Written Consent. Under the Delaware General
Corporation Law, unless the certificate of incorporation of a corporation
specifies otherwise, any action that could be taken by stockholders at an
annual or special meeting may be taken without a meeting and without notice to
or a vote of other stockholders if a consent in writing is signed by the
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 and bylaws provide that stockholder
action may be taken in writing by the consent of holders of not less than
66 2/3% of the outstanding shares entitled to vote at a meeting of stockholders.
As a result, stockholders may not act upon any matter except at a duly called
meeting or by the written consent of holders of 66 2/3% or more of the
outstanding shares entitled to vote.
Supermajority Vote Required for Certain Transactions. The affirmative vote
of the holders of at least 66 2/3% of the outstanding shares of common stock is
required to approve any merger or consolidation of our company or any sale or
transfer of all or substantially all of our assets.
Blank Check Preferred Stock. Our certificate of incorporation authorizes
blank check preferred stock. Our board of directors can set the voting,
redemption, conversion and other rights relating to such preferred stock and
can issue such stock in either a private or public transaction. The issuance of
preferred stock, while providing desired flexibility in connection with
possible acquisitions and other corporate purposes, could adversely affect the
voting power of holders of common stock and the likelihood that holders will
receive dividend payments and payments upon liquidation and could have the
effect of delaying, deferring or preventing a change in control of our company.
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 an interested stockholder (i.e., a person who owns 15% or more of
our outstanding voting stock) from engaging in certain business combinations
with our company for three years following the date that the person become an
interested stockholder. These restrictions do not apply if:
o before the person became an interested stockholder, our board of
directors approved either the business combination or the transaction
that resulted in the interested stockholder becoming an interested
stockholder;
o upon completion of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned
at least 85% of our outstanding voting stock at the time the
transaction commenced; 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 our company and a person who was not an
interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of 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
- 11 -
<PAGE> 14
or who were recommended for election or elected to succeed such directors by a
majority of directors then in office.
Stockholders Rights Agreement. Our board of directors has adopted a
stockholders rights agreement. Under the rights agreement, each right entitles
the registered holder under the circumstances described below to purchase from
our company one one-thousandth of a share of our Junior Participating Preferred
Stock, par value $0.01 per share (the "preferred shares"), at a price of $85
per one one-thousandth of a preferred share, subject to adjustment. The
following is a summary of certain terms of the rights agreement. The rights
agreement 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 agreement.
Until the distribution date, 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 has acquired beneficial ownership of 20%
or more of our outstanding voting stock; or
o 10 business days following the commencement or announcement of an
intention to commence a tender offer or exchange offer the completion of
which would result in the beneficial ownership by a person or group of 20%
or more of our outstanding voting stock.
Until the distribution date or the earlier of redemption or expiration of
the rights, the rights will be evidenced by the certificates representing the
common stock. As soon as practicable following the distribution date, separate
certificates evidencing the rights will be mailed to holders of record of the
common stock as of the close of business on the distribution date and such
separate rights certificates alone will thereafter evidence the rights.
The rights are not exercisable until the distribution date. The rights
will expire on February 22, 2009, unless the expiration date is extended or the
rights are earlier redeemed or exchanged.
If a person or group acquires 20% or more of our voting stock, 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.
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 that 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
(a) $1.00 in cash, or (b) 1,000 times the aggregate per share dividend declared
on the common stock. In the event of liquidation, the holders of preferred
shares will be entitled to receive a preferential liquidation payment per whole
share equal to the greater of (a) $1,000 per share, or (b) 1,000 times the
- 12 -
<PAGE> 15
aggregate amount to be distributed per share 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 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 purchase price and the number of one one-thousandths of a preferred
share or other securities or property issuable upon exercise of the rights 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 20% or more of our outstanding voting stock
and before a person or group acquires beneficial ownership of 50% or more of
our outstanding voting stock, 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 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, or one one-thousandth of a preferred share, for each two
shares of common stock for which each right is then exercisable, subject to
adjustment.
At any time prior to the first public announcement that a person or group
has become the beneficial owner of 20% or more of the outstanding voting stock,
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 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.
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 our company 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 our
company 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.
- 13 -
<PAGE> 16
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 our
company 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 for the common stock is ChaseMellon
Shareholder Services L.L.C.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
We may offer fractional shares of preferred stock, rather than full shares
of preferred stock. If we decide to offer fractional shares of preferred stock,
we will issue receipts for depositary shares. Each depositary share will
represent a fraction of a share of a particular series of preferred stock. The
prospectus supplement will indicate that fraction. The shares of preferred
stock represented by depositary shares will be deposited under a deposit
agreement between our company and a depositary that is a bank or trust company
that meets certain requirements and is selected by us. Each owner of a
depositary share will be entitled to all of the rights and preferences of the
preferred stock represented by the depositary share. The depositary shares will
be evidenced by depositary receipts issued pursuant to the deposit agreement.
Depositary receipts will be distributed to those persons purchasing the
fractional shares of preferred stock in accordance with the terms of the
offering.
We have summarized selected provisions of the deposit agreement and the
depositary receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
If we pay a cash distribution or dividend on a series of preferred stock
represented by depositary shares, the depositary will distribute such dividends
to the record holders of such depositary shares. If the distributions are in
property other than cash, the depositary will distribute the property to the
record holders of the depositary shares. If the depositary determines, however,
that it is not feasible to make the distribution of property, the depositary
may, with our approval, sell such property and distribute the net proceeds from
such sale to the holders of the preferred stock.
REDEMPTION OF DEPOSITARY SHARES
If we redeem a series of preferred stock represented by depositary shares,
the depositary will redeem the depositary shares from the proceeds received by
the depositary in connection with the redemption. The redemption price per
depositary share will equal the applicable fraction of the redemption price per
share of the preferred stock. If fewer than all the depositary shares are
redeemed, the depositary shares to be redeemed will be selected by lot or pro
rata as the depositary may determine.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
preferred stock represented by depositary shares are entitled to vote, the
depositary will mail the notice to the record holders of the depositary shares
relating to such preferred stock. Each record holder of these depositary shares
on the record date, which will be the same date as the record date for the
preferred stock, may instruct the depositary as to how to vote the preferred
stock represented by such holder's depositary shares. The depositary will
endeavor, insofar as practicable, to vote the
- 14 -
<PAGE> 17
amount of the preferred stock represented by such depositary shares in
accordance with such instructions, and we will take all action that the
depositary deems necessary in order to enable the depositary to do so. The
depositary will abstain from voting shares of the preferred stock to the extent
it does not receive specific instructions from the holders of depositary shares
representing such preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended by agreement between the
depositary and us. Any amendment that materially and adversely alters the
rights of the holders of depositary shares will not, however, be effective
unless such amendment has been approved by the holders of at least a majority
of the depositary shares then outstanding. The deposit agreement may be
terminated by the depositary or our company only if (1) all outstanding
depositary shares have been redeemed or (2) there has been a final distribution
in respect of the preferred stock in connection with any liquidation,
dissolution or winding up of our company and such distribution has been
distributed to the holders of depositary receipts.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will pay charges
of the depositary in connection with the initial deposit of the preferred stock
and any redemption of the preferred stock. Holders of depositary receipts will
pay other transfer and other taxes and governmental charges and any other
charges, including a fee for the withdrawal of shares of preferred stock upon
surrender of depositary receipts, as are expressly provided in the deposit
agreement to be for their accounts.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of depositary receipts at the principal office of the
depositary, subject to the terms of the deposit agreement, the owner of the
depositary shares may demand delivery of the number of whole shares of
preferred stock and all money and other property, if any, represented by those
depositary shares. Partial shares of preferred stock will not be issued. If the
depositary receipts delivered by the holder evidence a number of depositary
shares in excess of the number of depositary shares representing the number of
whole shares of preferred stock to be withdrawn, the depositary will deliver to
such holder at the same time a new depositary receipt evidencing the excess
number of depositary shares. Holders of preferred stock thus withdrawn may not
thereafter deposit those shares under the deposit agreement or receive
depositary receipts evidencing depositary shares therefor.
MISCELLANEOUS
The depositary will forward to holders of depositary receipts all reports
and communications from our company that are delivered to the depositary and
that we are required to furnish to the holders of the preferred stock.
Neither the depositary nor our company will be liable if we are prevented
or delayed by law or any circumstance beyond our control in performing our
obligations under the deposit agreement. The obligations of the depositary and
our company under the deposit agreement will be limited to performance in good
faith of our duties thereunder, and we will not be obligated to prosecute or
defend any legal proceeding in respect of any depositary shares or preferred
stock unless satisfactory indemnity is furnished. We may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting preferred stock for deposit, holders of depositary receipts or other
persons believed to be competent and on documents believed to be genuine.
- 15 -
<PAGE> 18
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering notice to our company
of its election to do so, and we may at any time remove the depositary. Any
such resignation or removal will take effect upon the appointment of a
successor depositary and its acceptance of such appointment. Such successor
depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $100,000,000.
DESCRIPTION OF SECURITIES
WARRANTS
We may issue securities warrants for the purchase of debt securities,
preferred stock, depositary shares, common stock or other securities.
Securities warrants may be issued independently or together with debt
securities, preferred stock, depositary shares or common stock offered by any
prospectus supplement and may be attached to or separate from any such offered
securities. Each series of securities warrants will be issued under a separate
warrant agreement to be entered into between our company and a bank or trust
company, as warrant agent, all as set forth in the prospectus supplement
relating to the particular issue of securities warrants. The securities warrant
agent will act solely as an agent of our company in connection with the
securities warrants and will not assume any obligation or relationship of
agency or trust for or with any holders of securities warrants or beneficial
owners of securities warrants.
The following summary of certain provisions of the securities warrants
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all provisions of the securities warrant agreements.
Reference is made to the prospectus supplement relating to the particular
issue of securities warrants offered thereby for the terms of and information
relating to such securities warrants, including, where applicable:
o the designation, aggregate principal amount, currencies, denominations
and terms of the series of debt securities purchasable upon exercise
of securities warrants to purchase debt securities and the price at
which such debt securities may be purchased upon such exercise;
o the number of shares of common stock purchasable upon the exercise of
securities warrants to purchase common stock and the price at which
such number of shares of common stock may be purchased upon such
exercise;
o the number of shares and series of preferred stock or depositary
shares purchasable upon the exercise of securities warrants to
purchase preferred stock and the price at which such number of shares
of such series of preferred stock or depositary shares may be
purchased upon such exercise;
o the designation and number of units of other securities purchasable
upon the exercise of securities warrants to purchase other securities
and the price at which such number of units of such other securities
may be purchased upon such exercise;
o the date on which the right to exercise such securities warrants shall
commence and the date on which such right shall expire;
o United States federal income tax consequences applicable to such
securities warrants;
o the amount of securities warrants outstanding as of the most recent
practicable date; and
o any other terms of such securities warrants.
- 16 -
<PAGE> 19
Securities warrants will be issued in registered form only. The exercise price
for securities warrants will be subject to adjustment in accordance with the
applicable prospectus supplement.
Each securities warrant will entitle the holder thereof to purchase such
principal amount of debt securities or such number of shares of preferred
stock, depositary shares, common stock or other securities at such exercise
price as shall in each case be set forth in, or calculable from, the prospectus
supplement relating to the securities warrants, which exercise price may be
subject to adjustment upon the occurrence of certain events as set forth in
such prospectus supplement. After the close of business on the expiration date,
or such later date to which such expiration date may be extended by us,
unexercised securities warrants will become void. The place or places where,
and the manner in which, securities warrants may be exercised shall be
specified in the prospectus supplement relating to such securities warrants.
Prior to the exercise of any securities warrants to purchase debt
securities, preferred stock, depositary shares, common stock or other
securities, holders of such securities warrants will not have any of the rights
of holders of debt securities, preferred stock, depositary shares, common stock
or other securities, as the case may be, purchasable upon such exercise,
including the right to receive payments of principal of, premium, if any, or
interest, if any, on the debt securities purchasable upon such exercise or to
enforce covenants in the applicable Indenture, or to receive payments of
dividends, if any, on the preferred stock, depositary shares or common stock
purchasable upon such exercise, or to exercise any applicable right to vote.
PLAN OF DISTRIBUTION
We may sell the offered securities:
o through underwriters or dealers;
o through agents; or
o directly to one or more purchasers, including existing stockholders in
a rights offering.
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 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.
BY AGENTS
Offered securities may also be sold through agents designated by us.
Unless indicated in the prospectus supplement, any such agent is acting on a
best efforts basis for the period of its appointment.
DIRECT SALES; RIGHTS OFFERINGS
Offered securities 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
- 17 -
<PAGE> 20
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
offered securities may be underwriters as defined in the Securities Act, and
any discounts or commissions received by them from our company 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.
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 that the
underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, our company or our subsidiaries in the ordinary course of
their businesses.
LEGAL MATTERS
Our legal counsel, Vinson & Elkins L.L.P., Houston, Texas, will pass upon
certain legal matters in connection with 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 included in our annual report on Form 10-K
for the year ended December 31, 1998 are incorporated by reference herein in
reliance upon the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
Certain information included or incorporated by reference in this
prospectus relating to our proved oil and gas reserves and future net cash
flows therefrom is derived from estimates prepared by Ryder Scott Company,
Petroleum Engineers, and is incorporated by reference herein in reliance upon
such firm as experts with respect to such matters.
- 18 -
<PAGE> 21
PROSPECTUS
2,500,000 SHARES
Newfield Exploration Company
COMMON STOCK
---------------
We intend to enter into a sales agency agreement with PaineWebber
Incorporated relating to the shares of common stock offered by this prospectus.
In accordance with the terms of the proposed sales agency agreement, we may
offer and sell up to 2,500,000 shares of our common stock from time to time
through PaineWebber, as our exclusive sales agent. Sales of the shares, if any,
will be made by means of ordinary brokers' transactions on the New York Stock
Exchange. Our common stock is listed on the New York Stock Exchange under the
symbol "NFX." On August 25, 1999, the last reported sales price of our common
stock on the New York Stock Exchange was $31 13/16 per share. No more than
1,500,000 shares of common stock will be issued and sold under the sales agency
agreement in any consecutive 12-month period.
PaineWebber will be entitled to a commission equal to 3.0% of the gross
sales price per share for the first 1,000,000 shares sold under the sales
agency agreement and 2.5% of the gross sales price per share for the next
1,500,000 shares sold under the agreement.
See "Risk Factors" beginning on page E-4 for factors you should consider
before buying shares of common stock.
---------------
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.
---------------
PaineWebber Incorporated
---------------
This prospectus is dated August 27, 1999.
<PAGE> 22
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ABOUT THIS PROSPECTUS..........................................E-2
WHERE YOU CAN FIND
MORE INFORMATION..........................................E-2
CAUTIONARY STATEMENT ABOUT
FORWARD-LOOKING
STATEMENTS................................................E-3
THE COMPANY....................................................E-3
RISK FACTORS...................................................E-4
USE OF PROCEEDS................................................E-9
DESCRIPTION OF CAPITAL STOCK...................................E-9
PLAN OF DISTRIBUTION..........................................E-13
LEGAL MATTERS.................................................E-14
EXPERTS.......................................................E-14
</TABLE>
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 the shares of common stock
described in this prospectus from time to time. This prospectus provides you
with a general description of the common stock we may offer. We may also add,
update or change information contained in this prospectus through a supplement
to this prospectus. Any statement that we make in this prospectus will be
modified or superseded by any inconsistent statement made by our company in a
prospectus supplement. You should read both this prospectus and any prospectus
supplement together with the additional information described in the following
section.
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.
Our common stock is listed on the New York Stock Exchange under the symbol
"NFX." Our reports, proxy statements and other information may be read and
copied at the New York Stock Exchange at 30 Broad Street, New York, New
York 10005.
The SEC allows our company 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. 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 common stock offered by this
prospectus or until we terminate this offering:
o our Annual Report on Form 10-K for the year ended December 31, 1998;
o our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999 and June 30, 1999;
o our Current Reports on Form 8-K, filed on February 18, 1999, August
13, 1999 and August 16, 1999;
E-2
<PAGE> 23
o the description of our common stock contained in our Form 8-A filed on
November 4, 1993; and
o the description of our preferred share purchase rights contained in
our Form 8-A filed on February 18, 1999.
You may request a copy of these filings at no cost, by writing our company
at the following address or telephoning our company at the following number:
Newfield Exploration Company
Attention: Stockholder Relations
363 N. Sam Houston Parkway E.,
Suite 2020
Houston, Texas 77060
(281) 847-6000
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 this common stock 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.
CAUTIONARY STATEMENT ABOUT
FORWARD-LOOKING STATEMENTS
This prospectus and the documents we incorporate by reference contain
statements that constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. These statements appear in a number of places in this prospectus and the
documents we incorporate by reference and include statements regarding our
plans, beliefs or current expectations, including those plans, beliefs and
expectations of our officers and directors.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, any such forward-looking statements
are not assurances of future performance and involve risks and uncertainties.
Actual results may differ materially from anticipated results for a number of
reasons, including:
o drilling results;
o oil and gas prices;
o industry conditions;
o the prices of goods and services;
o the availability of drilling rigs and other support services; and
o the availability of capital resources.
The information contained in this prospectus, and the documents
incorporated by reference into this prospectus, identify additional factors
that could affect our operating results and performance. We urge you to
carefully consider those factors.
All forward-looking statements attributable to our company are expressly
qualified in their entirety by this cautionary statement.
THE COMPANY
Newfield Exploration Company is an independent oil and gas company. We are
engaged in the exploration, development and acquisition of oil and gas
properties located primarily in the Gulf of Mexico. We also have operations
onshore in the Gulf of Mexico and offshore Australia and China. We discovered
and acquired our first oil and gas reserves in 1990 and have grown rapidly since
that time. At December 31, 1998, we had proved reserves equal to the equivalent
of 513 billion cubic feet of natural gas. At such date, approximately 82% of our
proved reserves were natural gas and approximately 93% were proved developed.
Our strategy is to continue to expand our reserve base and increase our
cash flow through exploration and the acquisition and exploitation of proved
properties. We emphasize the following elements in implementing this strategy:
E-3
<PAGE> 24
o reserve growth through exploratory drilling of a balanced portfolio;
o balance between exploration and acquisition and exploitation of proved
properties;
o geographic focus;
o control of operations and costs;
o use of 3-D seismic and other advanced technology; and
o equity ownership and other incentives to retain and attract employees.
Our principal executive offices are located at 363 N. Sam Houston Parkway
E., Suite 2020, Houston, Texas 77060, and our telephone number at our offices
is (281) 847-6000.
RISK FACTORS
You should carefully consider the following factors as well as other
information contained in this prospectus before deciding to invest in shares of
our common stock.
OIL AND GAS PRICES FLUCTUATE WIDELY, AND LOW PRICES FOR AN EXTENDED PERIOD OF
TIME ARE LIKELY TO HAVE A MATERIAL ADVERSE IMPACT ON OUR BUSINESS.
Our revenues, profitability and future growth depend substantially on
prevailing prices for oil and gas. These prices also affect the amount of cash
flow available for capital expenditures and our ability to borrow and raise
additional capital. The amount we can borrow under our credit facility is
subject to periodic redeterminations based in part on changing expectations of
future prices. Lower prices may also reduce the amount of oil and gas that we
can economically produce.
Prices for oil and gas fluctuate widely. For example, oil and gas
prices declined significantly in 1998 and, for an extended period of time,
remained substantially below prices received in recent years. Among the factors
that can cause fluctuations are:
o the domestic and foreign supply of oil and natural gas;
o the price of foreign imports;
o world-wide economic conditions;
o political conditions in oil and gas producing regions;
o the level of consumer demand;
o weather conditions;
o domestic and foreign governmental regulations; and
o the price and availability of alternative fuels.
We use hedging transactions with respect to a portion of our oil and
gas production to achieve more predictable cash flow and to reduce our exposure
to price fluctuations. While the use of hedging transactions limits the downside
risk of price declines, their use may also limit future revenues from price
increases. Please read our most recently filed annual report on Form 10-K or
quarterly report on Form 10-Q for a more detailed discussion of our hedging
program.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO REPLACE RESERVES THAT WE PRODUCE.
Our future success depends on our ability to find, develop and acquire
oil and gas reserves that are economically recoverable. As is generally the case
in the Gulf Coast region, our producing properties usually have high initial
production rates, followed by steep declines in production. As of December 31,
1998, our proved reserves, if produced constantly at the then current rate of
production, would produce for approximately five years. As a result, we must
locate and develop or acquire new oil and gas reserves to replace those being
depleted by production. We must do this even during periods of low oil and gas
prices when it is difficult to raise the capital necessary to finance these
activities. Without successful exploration or acquisition activities, our
reserves, production and revenues will decline rapidly. We cannot assure you
that we will be able to find and develop or acquire additional reserves at an
acceptable cost.
E-4
<PAGE> 25
SUBSTANTIAL CAPITAL IS REQUIRED TO REPLACE AND GROW RESERVES.
We make, and will continue to make, substantial expenditures for the
development, exploration, acquisition and production of oil and natural gas
reserves. We made capital expenditures, including exploration expense, of $253
million during 1997 and $311 million during 1998. We plan to make capital
expenditures of $225 million in 1999. We believe that we will have sufficient
cash provided by operating activities and borrowings under our credit facility
to fund planned capital expenditures in 1999 and 2000. If, however, lower oil
and gas prices or operating difficulties result in our cash flow from operations
being less than expected or limit our ability to borrow under our credit
facility, we may be unable to expend the capital necessary to undertake or
complete our drilling program unless we raise additional funds through debt or
equity financings. We cannot assure you that debt or equity financing, cash
generated by operations or borrowing capacity will be available to meet these
requirements.
IF OIL AND GAS PRICES DECREASE, WE MAY BE REQUIRED TO TAKE ADDITIONAL
WRITEDOWNS.
There is a risk that we will be required to writedown the carrying
value of our oil and gas properties when oil and gas prices are low or if we
have substantial downward adjustments to our estimated proved reserves,
increases in our estimates of development costs or deterioration in our
exploration results.
We capitalize the costs to acquire, explore for and develop our oil and
gas properties. Under the full cost accounting method we use, the net
capitalized costs of our oil and gas properties may not exceed the present value
of estimated future net cash flows from proved reserves, using constant oil and
gas prices and a 10% discount factor, plus the lower of cost or fair market
value of unproved properties. If net capitalized costs of our oil and gas
properties exceed this limit, we must charge the amount of this excess to
earnings. This type of charge will not affect our cash flow from operating
activities, but it will reduce the book value of our stockholders' equity. We
review the carrying value of our properties quarterly, based on prices in effect
as of the end of each quarter or as of the time of reporting our results. The
carrying value of oil and gas properties is computed on a country-by-country
basis. Therefore, while our properties in one country may be subject to a
writedown, our properties in other countries could be unaffected. Once incurred,
a writedown of oil and gas properties is not reversible at a later date even if
oil or gas prices increase.
Primarily because of low oil and gas prices, we recorded a writedown of
the carrying value of our properties for the year ended December 31, 1998 in the
amount of $105 million. Although the prices of oil and gas have recently
recovered, we cannot assure you that we will not be required to take additional
writedowns in future periods.
RESERVE ESTIMATES ARE INHERENTLY UNCERTAIN AND DEPEND ON MANY ASSUMPTIONS THAT
MAY TURN OUT TO BE INACCURATE.
Estimating accumulations of oil and gas is complex and is not an exact
science because of the numerous uncertainties inherent in the process. The
process relies upon interpretations of available geologic, geophysic,
engineering and production data. The extent, quality and reliability of this
technical data can vary. The process also requires certain economic assumptions,
some of which are mandated by the SEC, such as oil and gas prices, drilling and
operating expenses, capital expenditures, taxes and availability of funds. The
accuracy of a reserve estimate is a function of:
o the quality and quantity of available data;
o the interpretation of that data;
o the accuracy of various mandated economic assumptions; and
o the judgment of the persons preparing the estimate.
Our proved reserve information incorporated by reference in this prospectus is
based upon estimates we prepared. Estimates prepared by others might differ
materially from our estimates.
E-5
<PAGE> 26
Actual future production, oil and gas prices, revenues, taxes,
development expenditures, operating expenses and quantities of recoverable oil
and gas reserves most likely will vary from our estimates. Any significant
variance could materially affect the quantities and present value of our
reserves. In addition, we may adjust estimates of proved reserves to reflect
production history, results of exploration and development and prevailing oil
and gas prices. Our reserves may also be susceptible to drainage by operators on
adjacent properties.
You should not assume that the present value of future net cash flows
incorporated by reference in this prospectus is the current market value of our
estimated proved oil and gas reserves. In accordance with SEC requirements, we
generally base the estimated discounted future net cash flows from proved
reserves on prices and costs on the date of the estimate. Actual future prices
and costs may be materially higher or lower than the prices and costs as of the
date of the estimate.
WE MAY BE SUBJECT TO RISKS IN CONNECTION WITH FUTURE ACQUISITIONS.
The successful acquisition of producing properties requires an
assessment of several factors, including:
o recoverable reserves;
o future oil and gas prices;
o operating costs; and
o potential environmental and other
liabilities.
The accuracy of these assessments is inherently uncertain. In
connection with these assessments, we perform a review of the subject properties
that we believe to be generally consistent with industry practices, which
usually includes on-site inspections and the review of reports filed with the
Minerals Management Service for environmental compliance. Our review will not
reveal all existing or potential problems nor will it permit us to become
sufficiently familiar with the properties to fully assess their deficiencies and
capabilities. Inspections may not always be performed on every platform or well,
and structural and environmental problems are not necessarily observable even
when an inspection is undertaken. Even when problems are identified, the seller
may be unwilling or unable to provide effective contractual protection against
all or part of the problems. We are generally not entitled to contractual
indemnification for environmental liabilities and acquire structures on a
property on an "as is" basis.
COMPETITIVE INDUSTRY CONDITIONS MAY NEGATIVELY AFFECT OUR ABILITY TO CONDUCT
OPERATIONS.
Competition in the oil and gas industry is intense, particularly with
respect to the acquisition of producing properties and proved undeveloped
acreage. Major and independent oil and gas companies actively bid for desirable
oil and gas properties, as well as for the equipment and labor required to
operate and develop these properties. Many of our competitors have financial
resources and exploration and development budgets that are substantially greater
than ours, which may adversely affect our ability to compete with these
companies.
EXPLORATION AND DEVELOPMENT DRILLING IS A HIGH-RISK ACTIVITY.
Our future success will depend on the success of our exploration and
development drilling programs. In addition to the numerous operating risks
described in more detail below, these activities involve the risk that no
commercially productive oil or gas reservoirs will be discovered. In addition,
we often are uncertain as to the future cost or timing of drilling, completing
and producing wells. Furthermore, our drilling operations may be curtailed,
delayed or canceled as a result of a variety of factors, including:
E-6
<PAGE> 27
o unexpected drilling conditions;
o pressure or irregularities in formations;
o equipment failures or accidents;
o adverse weather conditions;
o compliance with governmental requirements; and
o shortages or delays in the availability of drilling rigs and
the delivery of equipment.
THE OIL AND GAS BUSINESS INVOLVES MANY OPERATING RISKS THAT CAN CAUSE
SUBSTANTIAL LOSSES; INSURANCE MAY NOT PROTECT US AGAINST ALL THESE
RISKS.
The oil and gas business involves a variety of operating risks,
including:
o fires;
o explosions;
o blow-outs;
o uncontrollable flows of oil, gas, formation water or drilling
fluids;
o natural disasters;
o pipe or cement failures;
o casing collapses;
o embedded oilfield drilling and service tools;
o abnormally pressured formations; and
o environmental hazards such as oil spills, natural gas leaks,
pipeline ruptures and discharges of toxic gases.
If any of these events occur, we could incur substantial losses as a
result of:
o injury or loss of life;
o severe damage to and destruction of property, natural
resources and equipment;
o pollution and other environmental damage;
o clean-up responsibilities;
o regulatory investigation and penalties;
o suspension of our operations; and
o repairs to resume operations.
If we experience any of these problems, our ability to conduct
operations could be adversely affected.
Offshore operations are subject to a variety of operating risks
peculiar to the marine environment, such as capsizing, collisions and damage or
loss from hurricanes or other adverse weather conditions. These conditions can
cause substantial damage to facilities and interrupt production. As a result, we
could incur substantial liabilities that could reduce or eliminate the funds
available for exploration, development and acquisitions, or result in loss of
properties.
We maintain insurance against some, but not all, of these potential
risks and losses. We may elect not to obtain insurance if we believe that the
cost of available insurance is excessive relative to the risks presented. In
addition, pollution and environmental risks generally are not fully insurable.
If a significant accident or other event occurs and is not fully covered by
insurance, it could adversely affect us.
WE HAVE RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS.
We continue to evaluate and pursue new opportunities for international
expansion in areas where we can use our core competencies. We believe these
areas include offshore Australia, China, West Africa and South America. To date,
we have expanded our operations to Australia and China. If our exploratory
drilling in Australia and China is successful, we may make significant future
investments in these areas.
Ownership of property interests and production operations in areas
outside the United States are subject to the various risks inherent in foreign
operations. These risks may include:
o currency restrictions and exchange rate fluctuations;
o loss of revenue, property and equipment as a result of
expropriation, nationalization, war or insurrection;
o increases in taxes and governmental royalties;
o renegotiation of contracts with governmental entities and
quasi-governmental agencies;
o change in laws and policies governing operations of foreign-
based companies;
o labor problems; and
o other uncertainties arising out of foreign government
sovereignty over our international operations.
E-7
<PAGE> 28
Our international operations may also be adversely affected by laws and
policies of the United States affecting foreign trade, taxation and investment.
In addition, in the event of a dispute arising from foreign operations, we may
be subject to the exclusive jurisdiction of foreign courts or may not be
successful in subjecting foreign persons to the jurisdiction of the courts of
the United States. Four labor unions represent our non-administrative employees
in Australia.
WE DEPEND ON OUR KEY PERSONNEL.
Our operations depend on a relatively small group of management and
technical personnel. The loss of one or more of these individuals could have a
material adverse effect on us.
THE RECENT DEPRESSED FINANCIAL CONDITIONS IN THE OIL AND GAS INDUSTRY MAY CHANGE
OUR EXPLORATION AND DEVELOPMENT PLANS.
The recent low prices for oil and gas have limited the access of many
independent oil and gas companies to the capital necessary to finance
activities. Most oil and gas companies have substantially reduced their capital
budgets for 1999 and 2000. As a result, some of the other working interest
owners of our wells may be unwilling or unable to pay their share of the costs
of projects as they become due. These problems could cause us to change, suspend
or terminate our exploration and development plans with respect to the affected
project.
WE ARE SUBJECT TO COMPLEX LAWS THAT CAN AFFECT THE COST, MANNER OR FEASIBILITY
OF DOING BUSINESS.
Exploration, development, production and sale of oil and gas are
subject to extensive federal, state, local and international regulation. We may
be required to make large expenditures to comply with environmental and other
governmental regulations. Matters subject to regulation include:
o discharge permits for drilling operations;
o drilling bonds;
o reports concerning operations;
o the spacing of wells;
o unitization and pooling of properties; and
o taxation.
Under these laws, we could be liable for personal injuries, property
damage, oil spills, discharge of hazardous materials, remediation and clean-up
costs and other environmental damages. Failure to comply with these laws also
may result in the suspension or termination of our operations and subject us to
administrative, civil and criminal penalties. Moreover, these laws could change
in ways that substantially increase our costs. Any such liabilities, penalties,
suspensions, terminations or regulatory changes could materially adversely
affect our financial condition and results of operations.
E-8
<PAGE> 29
OUR CERTIFICATE OF INCORPORATION, STOCKHOLDERS RIGHTS AGREEMENT AND BYLAWS
CONTAIN PROVISIONS THAT COULD DISCOURAGE AN ACQUISITION OR CHANGE OF CONTROL OF
OUR COMPANY.
Our stockholders rights agreement, together with certain provisions of
our certificate of incorporation and bylaws, may make it more difficult to
effect a change in control of our company, to acquire us or to replace incumbent
management. These provisions could potentially deprive our stockholders of
opportunities to sell shares of our stock at above-market prices.
WE DO NOT INTEND TO PAY, AND HAVE RESTRICTIONS UPON OUR ABILITY TO PAY,
DIVIDENDS ON OUR COMMON STOCK.
We have not paid cash dividends in the past and do not intend to pay
dividends on our common stock in the foreseeable future. We currently intend to
retain any earnings for the future operation and development of our business.
Our ability to make dividend payments in the future will be dependent on our
future performance and liquidity. In addition, our credit facility contains
restrictions on our ability to pay cash dividends on our capital stock,
including the common stock.
YEAR 2000 ISSUES.
Year 2000 issues result from the inability of computer programs or
computerized equipment to accurately calculate, store or use a date subsequent
to December 31, 1999. The erroneous date can be interpreted in a number of
different ways; typically, the year 2000 is interpreted as the year 1900. This
could result in a system failure or miscalculations causing disruptions of
operations, including a temporary inability to process transactions, send
invoices or engage in similar normal business. Please read our most recently
filed annual report on Form 10-K or quarterly report on Form 10-Q for a
discussion of our preparedness with respect to year 2000 issues.
USE OF PROCEEDS
Unless otherwise provided in a prospectus supplement, we will use the net
proceeds from the sale of the common stock offered by this prospectus for
general corporate purposes, which may include repayment of indebtedness, the
financing of capital expenditures, future acquisitions and additions to our
working capital.
DESCRIPTION OF CAPITAL STOCK
Pursuant to our certificate of incorporation, our authorized capital stock
consists of 100,000,000 shares of common stock and 5,000,000 shares of
preferred stock. As of July 30, 1999, we had 41,482,069 shares of common stock
outstanding, and no shares of preferred stock outstanding.
COMMON STOCK
Our common stockholders are entitled to one vote per share in the election
of directors and on all other matters submitted to a vote of our common
stockholders. Our common stockholders do not have cumulative voting rights.
Our common stockholders are entitled to receive ratably any dividends
declared by our board of directors out of funds legally available for the
payment of dividends. Dividends on our common stock are, however, subject to
any preferential dividend rights of outstanding preferred stock. We do not
intend to pay cash dividends on our common stock in the foreseeable future.
Upon our liquidation, dissolution or winding up, our common stockholders are
entitled to receive ratably our net assets available after payment of all of
our debts and other liabilities. Any payment is
E-9
<PAGE> 30
subject, however, to the prior rights of any outstanding preferred stock. Our
common stockholders do not have any preemptive, subscription, redemption or
conversion rights.
PREFERRED STOCK
Our certificate of incorporation allows our board of directors to issue
preferred stock from time to time in one or more series, without any action
being taken by our stockholders. Subject to the provisions of our certificate
of incorporation and limitations prescribed by law, our board of directors may
adopt resolutions to issue shares of a series of our preferred stock, and
establish their terms. These terms may include:
o voting powers;
o designations;
o preferences;
o dividend rights;
o dividend rates;
o terms of redemption;
o redemption prices;
o conversion rights; and
o any other terms permitted to be established by our certificate of
incorporation and by applicable law.
ANTI-TAKEOVER PROVISIONS
Certain provisions in our certificate of incorporation and bylaws may
encourage persons considering unsolicited tender offers or other unilateral
takeover proposals to negotiate with our board of directors rather than pursue
non-negotiated takeover attempts.
Stockholder Action by Written Consent. Under the Delaware General
Corporation Law, unless the certificate of incorporation of a corporation
specifies otherwise, any action that could be taken by stockholders at an
annual or special meeting may be taken without a meeting and without notice to
or a vote of other stockholders if a consent in writing is signed by the
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 and bylaws provide that stockholder
action may be taken in writing by the consent of holders of not less than
66 2/3% of the outstanding shares entitled to vote at a meeting of stockholders.
As a result, stockholders may not act upon any matter except at a duly called
meeting or by the written consent of holders of 66 2/3% or more of the
outstanding shares entitled to vote.
Supermajority Vote Required for Certain Transactions. The affirmative vote
of the holders of at least 66 2/3% of the outstanding shares of common stock is
required to approve any merger or consolidation of our company or any sale or
transfer of all or substantially all of our assets.
Blank Check Preferred Stock. Our certificate of incorporation authorizes
blank check preferred stock. Our board of directors can set the voting,
redemption, conversion and other rights relating to such preferred stock and
can issue such stock in either a private or public transaction. The issuance of
preferred stock, while providing desired flexibility in connection with
possible acquisitions and other corporate purposes, could adversely affect the
voting power of holders of common stock and the likelihood that holders will
receive dividend payments and payments upon liquidation and could have the
effect of delaying, deferring or preventing a change in control of our company.
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 an interested stockholder (i.e., a person who owns 15% or more of
our outstanding voting stock) from engaging in certain business combinations
E-10
<PAGE> 31
with our company for three years following the date that the person become an
interested stockholder. These restrictions do not apply if:
o before the person became an interested stockholder, our board of
directors approved either the business combination or the transaction
that resulted in the interested stockholder becoming an interested
stockholder;
o upon completion of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned
at least 85% of our outstanding voting stock at the time the
transaction commenced; 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 our company and a person who was not an
interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of 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 directors then in office.
Stockholders Rights Agreement. Our board of directors has adopted a
stockholders rights agreement. Under the rights agreement, each right entitles
the registered holder under the circumstances described below to purchase from
our company one one-thousandth of a share of our Junior Participating Preferred
Stock, par value $0.01 per share (the "preferred shares"), at a price of $85
per one one-thousandth of a preferred share, subject to adjustment. The
following is a summary of certain terms of the rights agreement. The rights
agreement 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 agreement.
Until the distribution date, 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 has acquired beneficial ownership of 20%
or more of our outstanding voting stock; or
o 10 business days following the commencement or announcement of an
intention to commence a tender offer or exchange offer the completion of
which would result in the beneficial ownership by a person or group of 20%
or more of our outstanding voting stock.
Until the distribution date or the earlier of redemption or expiration of
the rights, the rights will be evidenced by the certificates representing the
common stock. As soon as practicable following the distribution date, separate
certificates evidencing the rights will be mailed to holders of record of the
common stock as of the close of business on the distribution date and such
separate rights certificates alone will thereafter evidence the rights.
The rights are not exercisable until the distribution date. The rights
will expire on February 22, 2009, unless the expiration date is extended or the
rights are earlier redeemed or exchanged.
If a person or group acquires 20% or more of our voting stock, each right
then outstanding,
E-11
<PAGE> 32
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.
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 that 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
(a) $1.00 in cash, or (b) 1,000 times the aggregate per share dividend declared
on the common stock. In the event of liquidation, the holders of preferred
shares will be entitled to receive a preferential liquidation payment per whole
share equal to the greater of (a) $1,000 per share, or (b) 1,000 times the
aggregate amount to be distributed per share 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 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 purchase price and the number of one one-thousandths of a preferred
share or other securities or property issuable upon exercise of the rights 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 20% or more of our outstanding voting stock
and before a person or group acquires beneficial ownership of 50% or more of
our outstanding voting stock, 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 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, or one one-thousandth of a preferred share, for each two
shares of common stock for which each right is then exercisable, subject to
adjustment.
At any time prior to the first public announcement that a person or group
has become the beneficial owner of 20% or more of the outstanding voting stock,
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 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.
E-12
<PAGE> 33
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 our company 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 our
company or our stockholder;
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 our
company 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 for the common stock is ChaseMellon
Shareholder Services L.L.C.
PLAN OF DISTRIBUTION
We intend to enter into a sales agency agreement with PaineWebber
Incorporated under which we may issue and sell up to 2,500,000 shares of common
stock from time to time through PaineWebber, as our exclusive sales agent. No
more than 1,500,000 shares of common stock will be issued and sold under the
sales agency agreement in any consecutive 12- month period. The form of the
sales agency agreement is an exhibit to the registration statement of which
this prospectus is a part and is incorporated by reference into this
prospectus. The sales, if any, of common stock made under the sales agency
agreement will be made only by means of ordinary brokers' transactions on the
New York Stock Exchange.
PaineWebber will sell the shares of common stock subject to the sales
agency agreement on a daily basis or as otherwise agreed upon by our company
and PaineWebber. We will designate the maximum amount of shares of common stock
to be sold by PaineWebber daily as reasonably agreed to by PaineWebber. Subject
to the terms
E-13
<PAGE> 34
and conditions of the sales agency agreement, PaineWebber will use its
reasonable efforts to sell all of the designated shares of common stock. We may
instruct PaineWebber not to sell shares of common stock if the sales cannot be
effected at or above the price designated by our company in any such
instruction. PaineWebber will not be obligated to use reasonable efforts to sell
shares at any price below the designated price. Our company or PaineWebber may
suspend the offering of shares of common stock upon proper notice and subject to
other conditions.
PaineWebber will provide written confirmation to our company following the
close of trading on the New York Stock Exchange each day in which shares of
common stock are sold under the sales agency agreement. Each confirmation will
include the number of shares sold on that day, the net proceeds to our company
and the compensation payable by our company to PaineWebber in connection with
the sales.
The compensation to PaineWebber for sales of common stock will equal a
fixed commission rate of the gross sales price of any shares sold, as follows:
3.0% for the first 1,000,000 shares of common stock sold under the sales agency
agreement and 2.5% for the next 1,500,000 shares sold under the agreement. The
remaining sales proceeds, after deducting any transaction fees imposed by any
governmental or self-regulatory organization in connection with the sales, will
equal our net proceeds for the sale of the shares.
Settlement for sales of common stock will occur on the third business day
following the date on which any sales are made in return for payment of the net
proceeds to us. There is no arrangement for funds to be received in an escrow,
trust or similar arrangement.
On or prior to the second business day after the end of each calendar week
during which sales of common stock were made by PaineWebber, we will file a
prospectus supplement with the SEC under the applicable paragraph of Rule
424(b) of the Securities Act. We will also deliver to the New York Stock
Exchange the number of copies of the prospectus supplements that are required
by the exchange. The prospectus supplement will include the dates covered, the
number of shares of common stock sold through PaineWebber, the net proceeds to
our company and the compensation payable by our company to PaineWebber in
connection with the sales of common stock. Unless otherwise indicated in a
prospectus supplement, PaineWebber will act as sales agent on a reasonable
efforts basis.
In connection with the sale of the common stock on our behalf, PaineWebber
may be deemed to be an "underwriter" within the meaning of the Securities Act,
and the compensation of PaineWebber may be deemed to be underwriting
commissions or discounts. We have agreed to provide indemnification and
contribution to PaineWebber against certain civil liabilities, including
liabilities under the Securities Act. PaineWebber may engage in transactions
with, or perform services for, our company in the ordinary course of business.
If either our company or PaineWebber has reason to believe that the
exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the
Exchange Act are not satisfied, that party will promptly notify the other and
sales of common stock under the sales agency agreement will be suspended until
that or other exemptive provisions have been satisfied in the judgment of our
company and PaineWebber.
The offering of common stock pursuant to the sales agency agreement will
terminate upon the earlier of (1) the sale of all shares of common stock
subject to the agreement and (2) termination of the sales agency agreement. The
sales agency agreement may be terminated by our company in our sole discretion
at any time on or after the first anniversary of the date of the sales agency
agreement and may be terminated by PaineWebber in its sole discretion at any
time.
E-14
<PAGE> 35
LEGAL MATTERS
Our legal counsel, Vinson & Elkins L.L.P., Houston, Texas, will pass upon
certain legal matters in connection with the offered common stock. Certain
legal matters in connection with the offered common stock will be passed upon
for PaineWebber by its counsel, Brown & Wood LLP.
EXPERTS
The audited financial statements included in our annual report on Form 10-K
for the year ended December 31, 1998 are incorporated by reference herein in
reliance upon the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
Certain information included or incorporated by reference in this
prospectus relating to our proved oil and gas reserves and future net cash
flows therefrom is derived from estimates prepared by Ryder Scott Company,
Petroleum Engineers, and is incorporated by reference herein in reliance upon
such firm as experts with respect to such matters.
E-15
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses payable by
Newfield Exploration Company (the "Company") in connection with the issuance
and distribution of the securities covered by this Registration Statement.
<TABLE>
<S> <C>
Registration fee............................................................ $ 76,450
Fees and expenses of accountants............................................ 35,000
Fees and expenses of legal counsel ......................................... 150,000
Fees and expenses of Trustee and counsel.................................... 7,500
Printing and engraving expenses............................................. 85,000
Miscellaneous............................................................... 1,050
---------------
Total......................................................... $ 355,000
===============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL"), a Delaware corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents in
connection with threatened, pending or completed actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than an action
by or in right of the corporation), brought against them by reason of the fact
that they were or are such directors, officers, employees or agents, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in any such action, suit or proceeding. Article Seventh of
the Company's Second Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), together with Article VI of its Restated
Bylaws (the "Bylaws") provide for indemnification of each person who is or was
made a party to any actual or threatened civil, criminal, administrative or
investigative action, suit or proceeding because such person is, was or has
agreed to become an officer or director of the Company or is a person who is or
was serving or has agreed to serve at the request of the Company as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another corporation or of a partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise to the fullest
extent permitted by the DGCL as it existed at the time the indemnification
provisions of the Certificate of Incorporation and Bylaws were adopted or as
may be thereafter amended. Article VI of the Bylaws expressly provides that it
is not the exclusive method of indemnification.
Article Seventh of the Certificate of Incorporation and Article VI of
the Bylaws also provide that the Company may maintain insurance, at its own
expense, to protect itself and any director, officer, employee or agent of the
Company or of another entity against any expense, liability or loss, regardless
of whether the Company would have the power to indemnify such person against
such expense, liability or loss under the DGCL.
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 shall 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
of the DGCL (relating to liability for unauthorized acquisitions or redemptions
of,
II-1
<PAGE> 37
or dividends on, capital stock) or (iv) for any transaction from which the
director derived an improper personal benefit. Article Seventh of the
Certificate of Incorporation contains such a provision.
Howard H. Newman, a director of the Company and a Managing Director of
E.M. Warburg, Pincus & Co., LLC ("Warburg"), is indemnified by an affiliate of
Warburg against certain liabilities that he may incur as a result of his
serving as a director of the Company. Thomas G. Ricks, a director of the
Company and President and Chief Executive Officer of The University of Texas
Investment Management Company ("UTIMCO"), is indemnified by UTIMCO against
certain liabilities that he may incur as a result of his serving as a director
of the Company.
The Underwriting Agreements and the Sales Agency Agreement that the
Company may enter into with respect to the offer and sale of securities covered
by this Registration Statement will contain certain provisions for the
indemnification of directors and officers of the Company and the Underwriters
or Sales Agent, as applicable, against civil liabilities under the Securities
Act.
ITEM 16. EXHIBITS.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
in parentheses:
EXHIBIT
NO. EXHIBIT
*1.1 -- Form of Underwriting Agreement (Debt Securities).
*1.2 -- Form of Underwriting Agreement (Preferred Stock).
*1.3 -- Form of Underwriting Agreement (Common Stock).
*1.4 -- Form of Underwriting Agreement (Securities Warrants).
**1.5 -- Form of Sales Agency Agreement between the Company and
PaineWebber Incorporated.
4.1 -- Second Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-
69540)).
4.1.1 -- Certificate of Amendment to Second Restated Certificate of
Incorporation of the Company dated May 15, 1997 (incorporated
by reference to Exhibit 3.1.1 to the Company's Registration
Statement on Form S-3 (Registration No. 333-32582)).
4.1.2 -- Certificate of Designation of Series A Junior Participating
Preferred Stock setting forth the terms of the Junior
Participating Preferred Stock (incorporated by reference to
Exhibit 3.5 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998).
4.2 -- Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994).
4.3 -- Indenture dated as of October 15, 1997 among the Company, as
issuer, and First Union National Bank, as trustee
(incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-4 (Registration No.
333-39563)).
**4.4 -- Form of Senior Debt Indenture.
**4.5 -- Form of Subordinated Debt Indenture.
*4.6 -- Form of Debt Securities.
*4.7 -- Form of Securities Warrants.
*4.8 -- Form of Depositary Agreement.
*4.9 -- Form of Depositary Receipt.
II-2
<PAGE> 38
4.10 -- Rights Agreement, dated as of February 12, 1999, between the
Company and ChaseMellon Shareholder Services, L.L.C., as
rights agent (incorporated by reference to Exhibit 1 to the
Company's Registration Statement on Form 8-A dated February
17, 1999).
*+5.1 -- Opinion of Vinson & Elkins L.L.P.
*8.1 -- Opinion of Vinson & Elkins L.L.P. relating to certain tax
matters.
**12.1 -- Calculation of Ratio of Earnings to Fixed Charges.
**23.1 -- Consent of PricewaterhouseCoopers LLP.
**23.2 -- Consent of Ryder Scott Company.
23.3 -- Consent of Vinson & Elkins L.L.P. (included in Exhibits 5.1
and 8.1).
**24.1 -- Powers of Attorney.
*25.1 -- Form T-1 Statement of Eligibility of Trustee under the Senior
Indenture.
*25.2 -- Form T-1 Statement of Eligibility of Trustee under the
Subordinated Indenture.
- ---------------------------
* The Company will file as an exhibit to a Current Report on Form 8-K (i)
any form of Debt Securities, Securities Warrant Agreement or Securities
Warrants, Depositary Receipts or Depositary Agreement and any Preferred
Stock certificate or certificate of designations, (ii) any form of
underwriting agreement to be used in connection with an offering of
securities, (iii) any opinions of Vinson & Elkins L.L.P. not previously
filed and (iv) any statement of eligibility of a trustee in connection
with an offering of Debt Securities.
** Previously filed.
+ Filed herewith and replaces the exhibit that was previously filed.
ITEM 17. UNDERTAKINGS.
(a) The registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if
the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that the undertakings set forth in clauses (i) and
(ii) above do not apply if the information required to be included in
a post-effective amendment by those clauses is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the registrant
II-3
<PAGE> 39
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The 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 a 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 of 1933 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 post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 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.
(d) 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 provisions set forth in Item 15, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(e) The registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Act.
II-4
<PAGE> 40
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on August 26, 1999.
NEWFIELD EXPLORATION COMPANY
By: /s/ Terry W. Rathert
-------------------------------------
Terry W. Rathert
Vice President - Planning
and Administration
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the following
persons in the capacities indicated on the 26th day of August, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chairman of the Board and Chief Executive
------------------------------------------------ Officer (Principal Executive Officer)
Joe B. Foster
* Vice President -- Operations and Director
------------------------------------------------
Robert W. Waldrup
/s/ Terry W. Rathert Vice President -- Planning and Administration
------------------------------------------------ and Secretary (Principal Financial Officer)
Terry W. Rathert
* Controller and Assistant Secretary (Principal
------------------------------------------------ Accounting Officer)
Ronald P. Lege
* Director
------------------------------------------------
Phillip J. Burguieres
* Director
------------------------------------------------
Charles W. Duncan, Jr.
* Director
------------------------------------------------
Dennis R. Hendrix
* Director
------------------------------------------------
Terry Huffington
</TABLE>
II-5
<PAGE> 41
* Director
------------------------------------------------
Howard H. Newman
* Director
------------------------------------------------
Thomas G. Ricks
* Director
------------------------------------------------
John C. Sawhill
* Director
------------------------------------------------
C.E. Shultz
* By: /s/ Terry W. Rathert
-----------------------------------------------
Terry W. Rathert,
as attorney-in-fact
II-6
<PAGE> 42
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<S> <C>
*1.1 -- Form of Underwriting Agreement (Debt Securities).
*1.2 -- Form of Underwriting Agreement (Preferred Stock).
*1.3 -- Form of Underwriting Agreement (Common Stock).
*1.4 -- Form of Underwriting Agreement (Securities Warrants).
**1.5 -- Form of Sales Agency Agreement between the Company and
PaineWebber Incorporated.
4.1 -- Second Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-
69540)).
4.1.1 -- Certificate of Amendment to Second Restated Certificate of
Incorporation of the Company dated May 15, 1997 (incorporated
by reference to Exhibit 3.1.1 to the Company's Registration
Statement on Form S-3 (Registration No. 333-32582)).
4.1.2 -- Certificate of Designation of Series A Junior Participating
Preferred Stock setting forth the terms of the Junior
Participating Preferred Stock (incorporated by reference to
Exhibit 3.5 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998).
4.2 -- Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994).
4.3 -- Indenture dated as of October 15, 1997 among the Company, as
issuer, and First Union National Bank, as trustee
(incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-4 (Registration No.
333-39563)).
**4.4 -- Form of Senior Debt Indenture.
**4.5 -- Form of Subordinated Debt Indenture.
*4.6 -- Form of Debt Securities.
*4.7 -- Form of Securities Warrants.
*4.8 -- Form of Depositary Agreement.
*4.9 -- Form of Depositary Receipt.
4.10 -- Rights Agreement, dated as of February 12, 1999, between the
Company and ChaseMellon Shareholder Services, L.L.C., as
rights agent (incorporated by reference to Exhibit 1 to the
Company's Registration Statement on Form 8-A dated February
17, 1999).
*+5.1 -- Opinion of Vinson & Elkins L.L.P.
*8.1 -- Opinion of Vinson & Elkins L.L.P. relating to certain tax
matters.
**12.1 -- Calculation of Ratio of Earnings to Fixed Charges.
**23.1 -- Consent of PricewaterhouseCoopers LLP.
**23.2 -- Consent of Ryder Scott Company.
23.3 -- Consent of Vinson & Elkins L.L.P. (included in Exhibits 5.1
and 8.1).
**24.1 -- Powers of Attorney
*25.1 -- Form T-1 Statement of Eligibility of Trustee under the Senior
Indenture.
*25.2 -- Form T-1 Statement of Eligibility of Trustee under the
Subordinated Indenture.
</TABLE>
- ---------------------------
* The Company will file as an exhibit to a Current Report on Form 8-K (i)
any form of Debt Securities, Securities Warrant Agreement or Securities
Warrants, Depositary Receipts or Depositary Agreement and any Preferred
Stock certificate or certificate of designations, (ii) any form of
underwriting agreement to be used in connection with an offering of
securities, (iii) any opinions of Vinson & Elkins L.L.P. not previously
filed and (iv) any statement of eligibility of a trustee in connection
with an offering of Debt Securities.
** Previously filed.
+ Filed herewith and replaces the exhibit that was previously filed.
<PAGE> 1
EXHIBIT 5.1
[VINSON & ELKINS L.L.P. LETTERHEAD]
August 26, 1999
Newfield Exploration Company
363 N. Sam Houston Parkway, E.
Suite 2020
Houston, Texas 77060
Ladies and Gentlemen:
We acted as counsel for Newfield Exploration Company, a Delaware
corporation (the "Company"), in connection with the registration by the Company
under the Securities Act of 1933, as amended (the "Securities Act"), of the
offer and sale by the Company from time to time, pursuant to Rule 415 under the
Securities Act, of (i) unsecured debt securities, in one or more series,
consisting of notes, debentures or other evidences of indebtedness ("Debt
Securities"), (ii) shares of preferred stock, par value $.01 per share, of the
Company, in one or more series ("Preferred Stock"), which may be issued in the
form of depositary shares evidenced by depositary receipts ("Depositary
Shares"), (iii) shares of common stock, par value $.01 per share, of the
Company ("Common Stock"), including up to 2,500,000 shares (the "Sales Agency
Shares") that may be sold by the Company pursuant to the Sales Agency Agreement
(as defined below) and (iv) warrants ("Warrants") to purchase Debt Securities,
Preferred Stock, Depositary Shares or Common Stock. The aggregate initial
offering price of the Debt Securities, Preferred Stock, Depositary Shares,
Common Stock (including the Sales Agency Shares) and Warrants offered by the
Company (the "Securities") will not exceed $275,000,000 or, if applicable, the
equivalent thereof in any other currency or currency unit. The Securities will
be offered in amounts, at prices and on terms to be determined in light of
market conditions at the time of sale and to be set forth in supplements to the
applicable Prospectus contained in the Company's Registration Statement on
Form S-3 to which this opinion is an exhibit (the "Registration Statement").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of (i) the Second Restated Certificate of Incorporation and
Restated Bylaws of the Company, each as amended to the date hereof, (ii) the
form of Senior Indenture relating to senior Debt Securities of the Company
included as an exhibit to the Registration Statement, (iii) the form of
Subordinated Indenture relating to subordinated Debt Securities of the Company
included as an exhibit to the Registration Statement, (iv) the form of Sales
Agency Agreement between the Company and PaineWebber Incorporated (the "Sales
Agency Agreement") included as an exhibit to the Registration Statement and (v)
such other certificates, instruments and documents as we considered appropriate
for purposes of the opinions hereinafter expressed. In addition, we reviewed
such questions of law as we considered appropriate.
<PAGE> 2
Newfield Exploration Company
Page 2
July 9, 1999
In connection with this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post-effective
amendments), have become effective, (ii) other than with respect to the Sales
Agency Shares, a Prospectus Supplement will have been prepared and filed with
the Securities and Exchange Commission describing any Securities offered
thereby, (iii) all Securities will be issued and sold in compliance with
applicable federal and state securities laws and in the manner stated in the
Registration Statement and any applicable Prospectus Supplement, (iv) the Sales
Agency Agreement and each applicable Indenture will be duly authorized, executed
and delivered by the parties thereto in substantially the form reviewed by us,
(v) each person signing the Sales Agency Agreement and each Indenture will have
the legal capacity and authority to do so, (vi) at the time of any offering or
sale of any shares of Common Stock (other than the Sales Agency Shares) or
Preferred Stock, that the Company will have such number of shares of Common
Stock or Preferred Stock, as set forth in such offering or sale, authorized,
established (if applicable) and available for issuance, (vii) a definitive
purchase, underwriting or similar agreement with respect to any Securities
offered (other than the Sales Agency Shares) will have been duly authorized and
validly executed and delivered by the Company and the other parties thereto and
(viii) Securities issuable upon conversion, exchange or exercise of any
Securities being offered will have been duly authorized, established (if
appropriate) and reserved for issuance upon such conversion, exchange or
exercise (if appropriate).
Based upon the foregoing examination and review, we are of the opinion
that:
(i) When (a) the applicable Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended (the "TIA"),
(b) the Board of Directors of the Company (or a duly
authorized committee thereof) has taken all necessary action
to approve the issuance and terms of any Debt Securities, (c)
the terms of such Debt Securities and of their issuance and
sale have been duly established in conformity with the
applicable Indenture so as not to violate any applicable law
or result in a default under or breach of any agreement or
instrument binding upon the Company and so as to comply with
any requirements or restrictions imposed by any court or
governmental body having jurisdiction over the Company and (d)
such Debt Securities have been duly executed and authenticated
in accordance with the applicable Indenture and issued and
sold as contemplated in the Registration Statement, such Debt
Securities will constitute valid and legally binding
obligations of the Company, subject to bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally and
to general equitable principles, and any shares of Common
Stock issued upon conversion of any such Debt Securities in
accordance with the terms of the applicable Indenture will be
duly authorized, validly issued, fully paid and nonassessable.
<PAGE> 3
Newfield Exploration Company
Page 3
July 9, 1999
(ii) When (a) the Board of Directors of the Company (or a duly
authorized committee thereof) has taken all necessary
corporate action to approve the issuance and sale of any
shares of Common Stock (other than the Sales Agency Shares) or
of any series of Preferred Stock (and Depositary Shares, if
applicable) and (b) such shares have been issued and sold as
contemplated in the Registration Statement, all such shares
will be duly authorized, validly issued, fully paid and
nonassessable.
(iii) When (a) the Board of Directors of the Company (or a duly
authorized committee thereof) has taken all necessary
corporate action to approve the issuance and sale of any
Warrants, (b) the terms of such Warrants and of their issuance
and sale have been duly established in conformity with the
applicable Warrant Agreement so as not to violate any
applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to
comply with any requirements or restrictions imposed by any
court or governmental body having jurisdiction over the
Company and (c) such Warrants have been duly executed and
authenticated in accordance with the applicable Warrant
Agreement and issued and sold as contemplated in the
Registration Statement, (1) such Warrants will constitute
valid and legally binding obligations of the Company, subject
to bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium and similar laws relating to or affecting
creditors' rights generally and to general equitable
principles, (2) any Debt Securities issued upon exercise of
any such Warrant will, subject to the qualifications set forth
in paragraph (i) above being met, constitute valid and legally
binding obligations of the Company, subject to bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium and
similar laws relating to or affecting creditors' rights
generally and to general equitable principles, (3) any shares
of Common Stock issued upon conversion of any such Debt
Securities will be duly authorized, validly issued, fully paid
and nonassessable and (4) any shares of Common Stock or
Preferred Stock (or Depositary Shares, if applicable) issued
upon exercise of any such Warrant will, subject to the
qualifications set forth in paragraph (ii) above being met, be
duly authorized, validly issued, fully paid and nonassessable.
(iv) When any Sales Agency Shares have been issued and sold as
contemplated in the Sales Agency Agreement, all such shares
will be duly authorized, validly issued, fully paid and
nonassessable.
The foregoing opinions are limited to the laws of the United States of
America and to the General Corporation Law of the State of Delaware.
<PAGE> 4
Newfield Exploration Company
Page 4
July 9, 1999
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectuses forming a
part of the Registration Statement under the caption "Legal Matters." In
giving this consent, we do not admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act and the rules
and regulations thereunder.
/s/ Vinson & Elkins L.L.P.
