SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: January 27, 1998
SONAT INC.
(Exact name of registrant as specified in its charter)
Delaware 1-7179 63-0647939
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
AmSouth-Sonat Tower,
Birmingham, Alabama 35203
(Address of Principal Executive Offices) (Zip code)
Registrant's telephone number, including area code:
(205) 325-3800
<PAGE>
Item 5. Other Events
On January 27, 1998, Sonat Inc. (the "Company") entered into an Underwriting
Agreement, in the form of Exhibit 1 hereto, with the Underwriters named therein
with respect to the issue and sale by the Company of $100,000,000 aggregate
principal amount of its 6 5/8% Notes due February 1, 2008 (the "Notes"),
registered under its Registration Statement on Form S-3 (No. 33-62166) (the
"Registration Statement"). The Notes will be issued under the Indenture dated as
of June 1, 1986, between the Company and The Chase Manhattan Bank, formerly
known as Chemical Bank, successor by merger to Manufacturers Hanover Trust
Company, as Trustee, in the form of Exhibit 4-(1) hereto, as supplemented by the
First Supplemental Indenture dated as of June 1, 1995, in the form of Exhibit
4-(2) hereto.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
The Index to Exhibits to this Report is incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SONAT INC.
By: /s/ James E. Moylan, Jr.
------------------------------
Name: James E. Moylan, Jr.
Title: Senior Vice President and
Chief Financial Officer
Dated: January 29, 1998
<PAGE>
SONAT INC.
CURRENT REPORT ON FORM 8-K
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit
<C> <C>
1.* Form of Underwriting Agreement, dated January 27, 1998,
which incorporates the Underwriting Agreement Standard
Provisions, dated September 25, 1997, filed as Exhibit 1
to the Form 8-K of Sonat Inc. dated September 25, 1997.
4-(1) Indenture, dated as of June 1, 1986, between the Company
and The Chase Manhattan Bank, formerly known as Chemical
Bank, successor by merger to Manufacturers Hanover Trust
Company, Trustee, incorporated by reference herein from
Exhibit 4-(1) to Registration Statement No. 33-5947
4-(2) First Supplemental Indenture, dated as of June 1, 1995,
between the Company and the Trustee, incorporated by
reference herein from Exhibit 4-(1) to Form 8-K of Sonat
Inc. dated June 6, 1995
4-(3)* Form of Note
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* Filed herewith.
</TABLE>
UNDERWRITING AGREEMENT
----------------------
January 27, 1998
Sonat Inc.,
Amsouth-Sonat Tower,
Birmingham, Alabama 35203.
Dear Sirs:
The underwriters named below (such underwriters being herein called
the "Underwriters") understand that Sonat Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $100,000,000 aggregate principal amount
of 6 5/8% Notes due February 1, 2008 (the "Purchased Securities"), registered on
Registration Statement No. 33-62166 (the "Registration Statement"). Subject to
the terms and conditions set forth herein and incorporated by reference herein
and referred to below, the Company hereby agrees to sell and the Underwriters
agree to purchase, severally and not jointly, the principal amount of such
Purchased Securities set forth opposite their names at 98.881% of their
principal amount.
<TABLE>
<CAPTION>
Principal Amount
NAME of Notes
- ---- ----------------
<S> <C>
Salomon Brothers Inc .......................................... $25,000,000
Credit Suisse First Boston Corporation ........................ $25,000,000
Donaldson, Lufkin & Jenrette Securities
Corporation ........... ....................................... $25,000,000
J.P. Morgan Securities Inc. ................................... $25,000,000
-----------
Total ............................................ $100,000,000
============
</TABLE>
The Underwriters will pay for such Purchased Securities upon delivery
thereof at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York at 10:00 a.m. (New York time) on January 30, 1998.
<PAGE>
The Purchased Securities shall have the following terms:
MATURITY: February 1, 2008
INTEREST RATE: 6 5/8%
REDEMPTION PROVISIONS: Redeemable, in whole or in part, at the option
of the Company, at any time, at a redemption price equal to the
greater of 100% of the principal amount redeemed and the sum of the
present values of the remaining scheduled payments thereon, discounted
to the redemption date on a semiannual basis at the Treasury Rate plus
ten basis points, plus in each case accrued interest on the principal
amount being redeemed to the date of redemption.
DEFEASANCE PROVISIONS: Subject to the defeasance and covenant
defeasance provisions of Article 15 of the Indenture, dated as of June
1, 1986, between the Company and The Chase Manhattan Bank (formerly
Chemical Bank, successor by merger to Manufacturers Hanover Trust
Company), as Trustee.
INTEREST PAYMENT DATES: February 1 and August 1, commencing August 1,
1998.
Unless otherwise provided herein, all the provisions contained in the
document entitled Sonat Inc. Underwriting Agreement Standard Provisions, dated
September 25, 1997, a copy of which was filed as Exhibit 1 to the Company's
Current Report on Form 8-K dated September 25, 1997, are herein incorporated by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein.
All notices and communications hereunder to an Underwriter shall be
given to Salomon Brothers Inc., 7 World Trade Center, New York, New York 10013.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
Very truly yours,
SALOMON BROTHERS INC
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
By: SALOMON BROTHERS INC
By:____________________________________
Name:
Title:
Accepted:
SONAT INC.
By:______________________
Name:
Title:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, 55 Water Street, New York, New York (the
"Depositary"), to Sonat Inc. or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.,
or in such other name as is requested by an authorized representative of the
Depositary (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of the Depositary), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No. R-1 $100,000,000
CUSIP # 835415AG5
SONAT INC.
6 5/8% NOTES DUE FEBRUARY 1, 2008
Sonat Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company", which term shall also
include any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ONE HUNDRED MILLION DOLLARS ($100,000,000) on February 1,
2008 in such coin or currency of the United States as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on said principal sum, until said principal sum is paid or made
available for payment, at the rate of 6 5/8% per annum in like coin or currency,
from January 30, 1998 or from the most recent February 1 or August 1, as the
case may be (each, an "Interest Payment Date"), to which interest has been paid
or duly provided for, semi-annually on February 1 and August 1 in each year,
commencing August 1, 1998 (PROVIDED, HOWEVER, that if the Company shall default
in payment of the interest due on any Interest Payment Date, then from the next
preceding date to which interest has been paid or if no interest has been paid
on this global Security, then from January 30, 1998), and similarly to pay
interest at the same rate per annum on any overdue principal and on any overdue
<PAGE>
instalment of interest. The interest so payable on any February 1 or August 1
will, subject to certain exceptions provided in the Indenture, be paid to the
person in whose name this permanent global Security (or one or more predecessor
Securities) is registered at the close of business on the January 15 or July 15,
as the case may be, next preceding such February 1 or August 1. As used herein,
the term "Depositary" shall mean the Depositary designated as such by the
Company under the Indenture described herein.
This permanent global Security is one of a duly authorized issue of
debentures, notes or other evidences of indebtedness of the Company (herein
referred to as the "Securities") of the series hereinafter specified, all issued
or to be issued under and pursuant to an Indenture, dated as of June 1, 1986,
duly executed and delivered by the Company to The Chase Manhattan Bank, a state
banking corporation organized and existing under the laws of the State of New
York (hereinafter referred to as the "Trustee"), formerly known as Chemical
Bank, successor by merger to Manufacturers Hanover Trust Company, as
supplemented by the First Supplemental Indenture, dated as of June 1, 1995,
between the Company and the Trustee (as so supplemented, the "Indenture").
Reference is made to the Indenture and all indentures supplemental thereto for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different redemption or sinking fund provisions (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided. This permanent global Security is one of the series
designated as the Company's 6 5/8% Notes due February 1, 2008, herein referred
to as the "Notes", limited in aggregate principal amount to $100,000,000.
This permanent global Security is exchangeable in whole or from time
to time in part for Securities of this series in definitive registered form only
as provided herein and in the Indenture. If (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for this
<PAGE>
permanent global Security or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (ii) the Company in its sole discretion determines that this permanent
global Security shall be exchangeable for Securities of this series in
definitive registered form and executes and delivers to the Securities registrar
a written order of the Company providing that this permanent global Security
shall be so exchangeable, or (iii) any event shall have occurred and be
continuing which, after notice or lapse of time, or both, would become an Event
of Default with respect to the Securities of the series of which this permanent
global Security is a part, this permanent global Security shall be exchangeable
for Securities of this series in definitive registered form, PROVIDED that the
definitive Securities so issued in exchange for this permanent global Security
shall be in denominations of $1,000 and any integral multiples, without coupons,
and be of like aggregate principal amount and tenor as the portion of this
permanent global Security to be exchanged, and PROVIDED FURTHER that, unless the
Company agrees otherwise, Securities of this series in definitive registered
form will be issued in exchange for this permanent global Security, or any
portion hereof, only if such Securities in definitive registered form were
requested by written notice to the Trustee or the Security registrar by or on
behalf of a Person who is the beneficial owner of an interest hereof given
through the Holder hereof. Except as provided above, owners of beneficial
interests in this permanent global Security will not be entitled to have
Securities registered in their names, will not receive or be entitled to
physical delivery of Securities in definitive registered form and will not be
considered the Holders thereof for any purpose under the Indenture. Neither the
Company, the Trustee, any Paying Agent nor the Securities registrar shall have
any responsibility or liability for any aspect of records relating to or
payments made on account of beneficial ownership interests in this permanent
global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Any exchange of this permanent global Security or portion hereof for
one or more Securities of this series in definitive registered form will be made
at the New York office of the Trustee or the Security registrar, upon request by
or on behalf of the Person who is the beneficial owner of an interest herein
given through the Holder hereof and in accordance with instructions given by the
Company to the Trustee, the Security registrar and the Depositary. Upon exchange
<PAGE>
of any portion of this permanent global Security for one or more Securities of
this series in definitive registered form, the Trustee or the Securities
registrar, as the case may be, shall cancel this permanent global Security and
issue a new permanent global Security or Securities of this series and of like
tenor for the remaining principal amount. Except as otherwise provided herein or
in the Indenture, until exchanged in full for one or more Securities of this
series in definitive registered form, this permanent global Security shall in
all respects be subject to and entitled to the same benefits and conditions
under the Indenture as a duly authenticated and delivered Security of this
series in definitive registered form.
Payment of the principal of (and premium, if any) and interest on this
permanent global Security due at maturity will be made by wire transfer in
immediately available funds to such account as may have been designated to the
Paying Agent upon surrender of this Security at the corporate trust office of
the Paying Agent in the Borough of Manhattan, The City of New York, PROVIDED
that this permanent global Security is presented to the Paying Agent in time for
the Paying Agent to make such payment in accordance with its normal procedures.
Payments of interest (other than interest payable at maturity) will be made by
check mailed to the address of the Person entitled thereto as it appears in the
Security register, or by wire transfer in immediately available funds to such
account as may have been designated to the Paying Agent.
In case an Event of Default, as defined in the Indenture, with respect
to the Notes shall have occurred and be continuing, the principal of all of the
Notes (including this permanent global Security) and the accrued interest
thereon may be declared, and upon such declaration shall become, due and
payable, and such declaration may in certain events be rescinded by the Holders
of a majority in aggregate principal amount of the Notes at the time
Outstanding, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture also provides that the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding may waive (with
certain exceptions) any past default under the Indenture and its consequences.
The Indenture contains provisions permitting the Company and the Trustee, with
<PAGE>
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected, evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Holders of the Securities of each such series; PROVIDED, HOWEVER,
that no such supplemental indenture shall (i) extend the fixed maturity of any
Security, or reduce the rate or extend the time of payment of interest thereon,
or reduce the principal amount thereof or any premium thereon, or make the
principal thereof or any premium or interest thereon payable in any coin or
currency other than that hereinbefore provided, without the consent of the
Holder of such Security, or (ii) reduce the aforesaid percentage of Securities,
the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holders of all Securities affected thereby. Any such
waiver or consent by the Holder of this permanent global Security (unless
effectively revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
permanent global Security and of any Security or Securities issued in exchange
herefor or in lieu hereof, irrespective of whether any notation of such waiver
or consent is made upon this permanent global Security.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this permanent global Security and (b)
a restrictive covenant and the related Event of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this permanent global Security.
Nothing in the Indenture prohibits the consolidation or merger of the
Company with or into any corporation or corporations, or the sale or conveyance
of all or substantially all of the Company's properties and assets to any other
person, without the consent of the Holders, provided that, in the case of any
consolidation of the Company with, or merger of the Company into, any
corporation or corporations, or any sale or conveyance of the properties and
assets of the Company as an entirety or substantially as an entirety, the
successor corporation, or the person which acquired by sale or conveyance all or
substantially all of the Company's properties and assets, as the case may be,
<PAGE>
assumes all of the obligations of the Company under the Indenture and certain
other conditions are met. Upon such assumption the Company will be released from
its liability as obligor on this permanent global Security and all other
obligations and covenants under the Indenture.
Except as set forth in the preceding two paragraphs, no reference
herein to the Indenture and no provision of this permanent global Security shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium if any, and interest on this
permanent global Security at the time and place and at the rate and in the coin
or currency herein prescribed.
This global Security will be redeemable as a whole or in part, at the
option of the Company at any time, at a redemption price equal to the greater of
(i) 100% of the principal amount of the Securities to be redeemed and (ii) the
sum of the present values of the Remaining Scheduled Payments (as hereinafter
defined) thereon, discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as hereinafter defined) plus ten basis points, plus in either case accrued
interest on the principal amount being redeemed to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities. "Independent Investment Banker" means one of
the Reference Treasury Dealers appointed by the Trustee after consultation with
the Company.
<PAGE>
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the arithmetic average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, the arithmetic
average of the Reference Treasury Dealer Quotations for such redemption date.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the arithmetic average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer by 5:00 p.m. on the
third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Credit
Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation and J.P. Morgan Securities Inc. and their respective successors;
PROVIDED, HOWEVER, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any Security,
the remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the related redemption date but for
such redemption; PROVIDED, HOWEVER, that, if such redemption date is not an
interest payment date with respect to such Security, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Securities to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and
after the redemption date interest will cease to accrue on the Securities or
portions thereof called for redemption.
<PAGE>
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this permanent global Security is registrable
in the Security register, upon surrender of this permanent global Security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this permanent
global Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
registrar duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
No service charge shall be made for any such registration of transfer
or exchange of Securities as provided above, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee, any Paying Agent and any agent of the
Company or the Trustee may treat the Person in whose name this permanent global
Security is registered as the owner hereof for all purposes, whether or not this
permanent global Security be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary (including, without
limitation, notice of any beneficial interests herein).
Prior to due presentment of this permanent global Security for
registration of transfer, the Company, the Trustee, any Paying Agent and any
agent of the Company or the Trustee may treat the Person in whose name this
permanent global Security is registered as the owner hereof for all purposes,
whether or not this permanent global Security is overdue, and neither the
Company, the Trustee, any Paying Agent nor any such agent shall be affected by
notice to the contrary (including, without limitation, notice of any beneficial
interests herein).
No recourse shall be had for the payment of the principal of, or
premium, if any, or the interest on this permanent global Security, or for any
<PAGE>
claim based hereon, or otherwise in respect hereof, or based on or in respect of
the Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
All terms used in this permanent global Security which are defined in
the Indenture and not herein otherwise defined shall have the meanings assigned
to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this permanent global Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: January 30, 1998 SONAT INC.
By:_______________________________________
Name:
Title:
[SEAL]
Attest:_________________________
Title:
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the permanent global Securities of the series designated herein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:_______________________________________
Authorized Officer
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
- --------------------------------------------------------------------------------
the within permanent global Security and all rights thereunder, and hereby does
irrevocably appoint ____________________________________ attorney to transfer
said permanent global Security on the books of the Company, with full power of
substitution in the premises.
Dated: _______________________
NOTICE: The signature to this assignment must correspond with the
name as written upon the face of the within permanent global Security
in every particular without alteration or enlargement or any change
whatsoever and must be guaranteed by a commercial bank or trust
company having its principal office or correspondent in The City of
New York or by a member of the New York Stock Exchange.
