AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1997
REGISTRATION NO 333-19987
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DIAMOND OFFSHORE DRILLING, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 1381 76-0321760
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification Number)
DIAMOND OFFSHORE DRILLING, INC. RICHARD L. LIONBERGER, ESQ.
15415 KATY FREEWAY VICE PRESIDENT, GENERAL COUNSEL AND COPY TO:
HOUSTON, TEXAS 77094 SECRETARY JAMES L. RICE III, ESQ.
(281) 492-5300 15415 KATY FREEWAY WEIL, GOTSHAL & MANGES LLP
(Address, Including Zip Code, and Telephone HOUSTON, TEXAS 77094 700 LOUISIANA, SUITE 1600
Number, (281) 492-5300 HOUSTON, TEXAS 77002
Including Area Code, of Registrant's (Name, Address, Including Zip Code and (713) 546-5000
Principal Executive Offices) Telephone Number, Including Area
Code, of Agent For Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
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 SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 22, 1997
[DIAMOND OFFSHORE DRILLING, INC. LOGO]
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$600,000,000
DEBT SECURITIES PREFERRED STOCK COMMON STOCK SECURITIES WARRANTS
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Diamond Offshore Drilling, Inc., a Delaware corporation (the "Company"),
may issue from time to time, together or separately, (1) its debt securities
(the "Debt Securities"), which may be either senior ("Senior Securities") or
subordinated ("Subordinated Securities") and which may be convertible into or
exchangeable for shares of common stock, par value $0.01 per share, of the
Company (the "Common Stock"), shares of preferred stock, par value $0.01 per
share, of the Company (the "Preferred Stock"), or other Debt Securities; (2)
warrants to purchase Debt Securities (the "Debt Warrants"); (3) Preferred Stock,
which may be convertible into or exchangeable for shares of Common Stock or
shares of Preferred Stock or Debt Securities; (4) warrants to purchase shares of
Preferred Stock (the "Preferred Stock Warrants"); and (5) Common Stock issuable
upon the conversion or exchange of Debt Securities or Preferred Stock offered
hereunder, to the extent such Debt Securities or Preferred Stock are, by their
terms, convertible into or exchangeable for shares of Common Stock, in amounts,
at prices and on terms to be determined by market conditions at the time of
offering thereof. The Debt Warrants and Preferred Stock Warrants are
collectively referred to herein as the "Securities Warrants" and the Debt
Securities, Preferred Stock, Common Stock and Securities Warrants are
collectively referred to herein as the "Offered Securities".
The Offered Securities may be issued in one or more series or issuances
and will be limited to $600,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Debt Securities
are issued for one or more foreign currencies or currency units). The Offered
Securities may be sold for U.S. dollars, or any foreign currency or currencies
or currency units, and the principal of, and any premium or interest on, the
Debt Securities may be payable in U.S.
dollars, or any foreign currency or currencies or currency units.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), including, where applicable, (1) in
the case of Debt Securities, the specific designation, aggregate principal
amount, authorized denomination, initial offering price, maturity, premium (if
any), interest rate (which may be fixed or floating), time of and method of
calculating the payment of interest, if any, the currency in which principal,
premium, if any, and interest, if any, are payable, any redemption or sinking
fund terms, any terms for the conversion into or exchange for shares of Common
Stock or Preferred Stock or other Debt Securities, terms of subordination of
Subordinated Securities, and other specific terms; (2) in the case of Preferred
Stock, the specific designation, any dividend, liquidation, redemption, sinking
fund, voting or other rights, time of payment of dividends, any terms for the
conversion into or exchange for shares of Common Stock or shares of Preferred
Stock or Debt Securities, the initial offering price and other specific terms;
and (3) in the case of Securities Warrants, the duration, initial offering
price, exercise price and detachability thereof. The Prospectus Supplement will
also contain information, where applicable, about certain United States Federal
income tax considerations relating to, and any listing on a securities exchange
of, the Offered Securities covered by the Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The Offered Securities will be sold directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of such
methods. If any agents of the Company or any dealers or underwriters are
involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the names of such agents, dealers or underwriters
and any applicable agent's commission, dealer's purchase price or underwriter's
discount will be set forth in or may be calculated from the Prospectus
Supplement. The net proceeds to the Company from such sale will be the purchase
price less such commission in the case of an agent, the purchase price in the
case of a dealer, or the public offering price less such discount in the case of
an underwriter and less, in each case, other attributable issuance expenses. See
"Plan of Distribution."
The date of this Prospectus is January , 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission") relating to its business, financial position,
results of operations and other matters. Such reports and other information can
be inspected and copied at the Public Reference Section maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at certain of its Regional Offices, located at Northwest Atrium Center
(Suite 1400), 500 West Madison Street, Chicago, Illinois 60661, and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Section of the Commission at
prescribed rates. Such material can also be inspected at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Such
material may also be accessed electronically by means of the Commission's home
page on the Internet (http://www.sec.gov).
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is made to the Registration Statement
and to the exhibits relating thereto for further information with respect to the
Company and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, its Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, 1996, June 30, 1996 and
September 30, 1996, its Current Reports on Form 8-K dated February 20, 1996 and
May 13, 1996, all of which have been previously filed with the Commission under
File No. 1-13926, and the description of Common Stock of the Company that is
contained in the registration statement on Form 8-A dated September 6, 1995
filed under the Exchange Act under File No. 1-13926, and Amendment No.
1 thereto on Form 8-A/A dated October 9, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the Offered Securities offered hereby shall be
deemed incorporated herein by reference, and such documents shall be deemed to
be a part hereof from the date of filing such documents. Any statement contained
herein, in a document incorporated or deemed to be incorporated by reference
herein, or in the accompanying Prospectus Supplement, shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in the accompanying Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the above documents incorporated or deemed to be
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests should be directed to:
Diamond Offshore Drilling, Inc., 15415 Katy Freeway, Houston, Texas 77094; Attn:
Corporate Secretary (telephone 281-492-5300).
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THE COMPANY
The Company, through wholly owned subsidiaries, engages worldwide in the
contract drilling of offshore oil and gas wells and is a leader in deep water
drilling. The Company's fleet of 46 mobile offshore drilling rigs is one of the
largest in the world and includes the largest fleet of semisubmersible rigs. The
fleet is comprised of 30 semisubmersibles (including three of the world's 13
fourth-generation semisubmersibles), 15 jack-ups and one drillship.
On December 31, 1996, the Company exited the land drilling business with
the sale of its land rigs and associated equipment for approximately $26
million.
Unless the context otherwise requires, references herein and in any
Prospectus Supplement to the "Company" shall mean Diamond Offshore Drilling,
Inc. and its subsidiaries.
The Company is a Delaware corporation with its principal executive offices
located at 15415 Katy Freeway, Houston, Texas 77094, where its telephone number
is (281) 492-5300.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's fixed charges exceeded the Company's earnings by
approximately $13,803,000, $46,425,000, $21,670,000, $77,951,000, and
$22,609,000 for the years ended December 31, 1995, 1994, 1993, 1992 and 1991,
respectively. Fixed charges for the years ended December 31, 1991 through
December 31, 1995 consisted solely of interest expense on notes payable to Loews
Corporation. The Company's consolidated ratio of earnings to fixed charges for
the nine months ended September 30, 1996, was 49.49. For all such periods, the
ratio of earnings to fixed charges has been computed on a total enterprise
basis. Earnings represent income from continuing operations plus income taxes
and fixed charges. Fixed charges represent interest, whether expensed or
capitalized.
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USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
from the sale of the Offered Securities offered hereby will be used for general
corporate purposes, including repayment of borrowings, working capital, capital
expenditures and acquisitions. Additional information on the use of net proceeds
from the sale of the Offered Securities offered hereby is set forth in the
Prospectus Supplement relating to such Offered Securities.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities summarizes
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
and the extent, if any, to which such general provisions may apply to any series
of Debt Securities will be described in the Prospectus Supplement relating to
such series.
The Debt Securities are to be issued under one or more Indentures
(collectively, the "Indenture") between the Company and a trustee selected by
the Company, which trustee shall be named in a Prospectus Supplement (the
"Trustee"). The following statements are subject to the detailed provisions of
the Indenture, a copy of which is filed as an exhibit to the Registration
Statement. Wherever any particular provisions of the Indenture or terms defined
therein are referred to, such provisions and terms are incorporated by reference
as a part of the statements made herein and such statements are qualified in
their entirety by such references. References to particular sections of the
Indenture are noted below. Defined terms used herein but not defined herein
shall have the meanings ascribed to them in the Indenture.
GENERAL
The Debt Securities may be either Senior Securities or Subordinated
Securities and will be unsecured. The Indenture does not limit the amount of
Debt Securities which may be issued thereunder and Debt Securities may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. (Section 301) Debt Securities will be issued from
time to time and offered on terms determined by market conditions at the time of
sale.
The Senior Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. To the extent
provided in the Prospectus Supplement relating thereto, the Company may be
required to secure Senior Securities equally and ratably with other Debt (as
defined in the Indenture) with respect to which the Company elects or is
required to provide security. The Subordinated Securities will be unsecured and
will be subordinated and junior to all "Senior Indebtedness" (which for this
purpose includes any Senior Securities) to the extent set forth in the
applicable supplemental Indenture and the Prospectus Supplement relating to such
series.
The Debt Securities may be issued in one or more series with the same or
various maturities at par, at a premium or at a discount. Any Debt Securities
bearing no interest or
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interest at a rate which at the time of issuance is below market rates will be
sold at a discount (which may be substantial) from their stated principal
amount. Federal income tax consequences and other special considerations
applicable to any such substantially discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities offered hereby: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the percentage
of their principal amount at which such Debt Securities will be issued; (iii)
the date or dates on which the Debt Securities will mature; (iv) the rate or
rates (which may be fixed or floating) per annum at which the Debt Securities
will bear interest, if any, or the method of determining such rate or rates; (v)
the date or dates on which any such interest will be payable, the date or dates
on which payment of any such interest will commence and the Regular Record Dates
for such Interest Payment Dates; (vi) whether such Debt Securities are Senior
Securities or Subordinated Securities; (vii) the terms of any mandatory or
optional redemption (including any provisions for any sinking, purchase or other
analogous fund) or repayment option; (viii) the currency, currencies or currency
units for which the Debt Securities may be purchased and the currency,
currencies or currency units in which the principal thereof, any premium thereon
and any interest thereon may be payable; (ix) if the currency, currencies or
currency units for which the Debt Securities may be purchased or in which the
principal thereof, any premium thereon and any interest thereon may be payable
is at the election of the Company or the purchaser, the manner in which such
election may be made; (x) if the amount of payments on the Debt Securities is
determined with reference to an index based on one or more currencies or
currency units, changes in the price of one or more securities or changes in the
price of one or more commodities, the manner in which such amounts may be
determined; (xi) the extent to which any of the Debt Securities will be issuable
in temporary or permanent global form, or the manner in which any interest
payable on a temporary or permanent Global Security will be paid; (xii) the
terms and conditions upon which conversion or exchange of the Debt Securities
into or for Common Stock, Preferred Stock or other Debt Securities will be
effected, including the conversion price or exchange ratio, the conversion or
exchange period and any other conversion or exchange provisions; (xiii)
information with respect to book-entry procedures, if any; (xiv) a discussion of
certain Federal income tax, accounting and other special considerations,
procedures and limitations with respect to the Debt Securities; and (xv) any
other specific terms of the Debt Securities not inconsistent with the Indenture.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or any
interest on any series of Debt Securities is payable in one or more foreign
currencies or foreign currency units, the restrictions, elections, Federal
income tax consequences, specific terms and other information with respect to
such issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement, the principal of,
any premium on, and any interest on the Debt Securities will be payable, and the
Debt Securities will be transferable, at the Corporate Trust Office of the
Trustee specified in the applicable Indenture, provided that payment of
interest, if any, may be made at the option of the Company by check
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mailed on or before the payment date, first class mail, to the address of the
person entitled thereto as it appears on the registry books of the Company or
its agent.
Unless otherwise specified in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. (Sections 301 and 302) No service
charge will be made for any transfer or exchange of any Debt Securities, but the
Company may, except in certain specified cases not involving any transfer,
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 305)
GLOBAL SECURITIES
The Debt Securities of a series may be issued, in whole or in part, in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee of such Depositary to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests
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in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing such Debt Securities.
Payments of principal of, any premium on, and any interest on, individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the Company, the Trustee for such Debt Securities, any
Paying Agent, nor the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name". Such payments will be
the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Security or Securities representing such
series of Debt Securities. Further, if the Company so specifies with respect to
the Debt Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable to
the Company, the Trustee and the Depositary for such Global Security, receive
individual Debt Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery of
individual Debt Securities of the series represented by such Global Security
equal in principal amount to such beneficial interest and to have such Debt
Securities registered in its name. Individual Debt Securities of such series so
issued will be issued in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof.
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SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the
Company, and will constitute Senior Indebtedness (in each case as defined in the
applicable supplemental Indenture) ranking on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of the
Company. The obligations of the Company pursuant to the Subordinated Securities
will be subordinate in right of payment to the extent set forth in the Indenture
and the applicable supplemental Indenture to all Senior Indebtedness (including
all Senior Securities) (in each case as defined in the applicable supplemental
Indenture). Except to the extent otherwise set forth in a Prospectus Supplement,
the Indenture does not contain any restriction on the amount of Senior
Indebtedness which the Company may incur.
The terms of the subordination of a series of Subordinated Securities,
together with the definition of Senior Indebtedness related thereto, will be as
set forth in the applicable supplemental Indenture and the Prospectus Supplement
relating to such series.
The Subordinated Securities will not be subordinated to indebtedness of
the Company which is not Senior Indebtedness, and the creditors of the Company
who do not hold Senior Indebtedness will not benefit from the subordination
provisions described herein. In the event of the bankruptcy or insolvency of the
Company before or after maturity of the Subordinated Securities, such other
creditors would rank pari passu with holders of the Subordinated Securities,
subject, however, to the broad equity powers of the Federal bankruptcy court
pursuant to which such court may, among other things, reclassify the claims of
any series of Subordinated Securities into a class of claims having a different
relative priority with respect to the claims of such other creditors or any
other claims against the Company.
CERTAIN DEFINITIONS
Certain terms defined in Section 101 of the Indenture are summarized
below.
"Debt" means indebtedness for money borrowed.
"Subsidiary", when used with respect to the Company, means (i) any
corporation of which a majority of the outstanding voting stock is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
both, (ii) a partnership in which the Company or any Subsidiary of the Company
is, at the date of determination, a general or limited partner of such
partnership, but only if the Company or its Subsidiary is entitled to receive
more than fifty percent of the assets of such partnership upon its dissolution,
or (iii) any other Person (other than a corporation or partnership) in which the
Company or any Subsidiary of the Company, directly or indirectly, at the date of
determination thereof, has (x)
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at least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such Person.
COVENANTS
The Indenture contains certain covenants that will be applicable (unless
waived or amended) so long as any of the Debt Securities are outstanding, unless
stated otherwise in the Prospectus Supplement.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indenture provides that the Company may not consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless (i) the successor Person
shall be a corporation or partnership organized and existing under the laws of
the United States or any State thereof or the District of Columbia, and shall
expressly assume by a supplemental indenture executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of, any premium on, and any interest on, all the outstanding Debt
Securities and the performance of every covenant in the Indenture on the part of
the Company to be performed or observed; (ii) immediately after giving effect to
such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer and such supplemental indenture
comply with the foregoing provisions relating to such transaction. (Section 801)
In case of any such consolidation, merger, conveyance or transfer, such
successor Person will succeed to and be substituted for the Company as obligor
on the Debt Securities, with the same effect as if it had been named in the
Indenture as the Company. (Section 802 )
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; DEBT SECURITIES IN FOREIGN
CURRENCIES
As to any series of Debt Securities, an Event of Default is defined in the
Indenture as (a) default for 30 days in payment of any interest on the Debt
Securities of such series; (b) default in payment of principal of or any premium
on the Debt Securities of such series at maturity; (c) default in payment of any
sinking or purchase fund or analogous obligation, if any, on the Debt Securities
of such series; (d) default by the Company in the performance of any other
covenant or warranty contained in the Indenture for the benefit of such series
which shall not have been remedied by the end of a period of 60 days after
notice is given as specified in the Indenture; (e) certain events of bankruptcy,
insolvency and reorganization of the Company; and (f) to the extent set forth in
the applicable supplemental Indenture and Prospectus Supplement, certain
defaults under other Debt. (Section 501)
A default under one series of Debt Securities will not necessarily be a
default under another series. Any additions, deletions or other changes to the
Events of Default which will be applicable to a series of Debt Securities will
be described in the Prospectus Supplement relating to such series of Debt
Securities.
9
The Indenture provides that (i) if an Event of Default described in clause
(a), (b), (c), (d) or (f) above (if the Event of Default under clause (d) is
with respect to less than all series of Debt Securities then outstanding) shall
have occurred and be continuing with respect to any series, either the Trustee
or the holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding (each such series acting as a
separate class) may declare the principal (or, in the case of Original Issue
Discount Securities, the portion thereof specified in the terms thereof) of all
outstanding Debt Securities of such series and the interest accrued thereon, if
any, to be due and payable immediately and (ii) if an Event of Default described
in clause (d) or (f) above (if the Event of Default under clause (d) is with
respect to all series of Debt Securities then outstanding) shall have occurred
and be continuing, either the Trustee or the holders of at least 25% in
aggregate principal amount of all Debt Securities then outstanding (treated as
one class) may declare the principal (or, in the case of Original Issue Discount
Securities, the portion thereof specified in the terms thereof) of all Debt
Securities then outstanding and the interest accrued thereon, if any, to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults (except for defaults in the payment of principal of,
any premium on, or any interest on, such Debt Securities and in compliance with
certain covenants) may be waived by the holders of a majority in aggregate
principal amount of the Debt Securities of such series then outstanding. If an
Event of Default described in clause (e) occurs and is continuing, then the
principal amount (or, in the case of Debt Securities originally issued at a
discount, such portion of the principal amount as may be specified in the terms
hereof) of all the Debt Securities then outstanding and all accrued interest
thereon shall become and be due and payable immediately, without any declaration
or other act by the Trustee or any other Holder. (Sections 502 and 513)
Under the Indenture the Trustee must give to the holders of each series of
Debt Securities notice of all uncured defaults known to it with respect to such
series within 90 days after such a default occurs (the term default to include
the events specified above without notice or grace periods); provided that,
except in the case of default in the payment of principal of, any premium on, or
any interest on, any of the Debt Securities, or default in the payment of any
sinking or purchase fund installment or analogous obligations, the Trustee shall
be protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of the Debt
Securities of such series. (Section 602)
No holder of any Debt Securities of any series may institute any action
under the Indenture unless (a) such holder shall have given the Trustee written
notice of a continuing Event of Default with respect to such series, (b) the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding shall have requested the Trustee to
institute proceedings in respect of such Event of Default, (c) such holder or
holders shall have offered the Trustee such reasonable indemnity as the Trustee
may require, (d) the Trustee shall have failed to institute an action for 60
days thereafter and (e) no inconsistent direction shall have been given to the
Trustee during such 60-day period by the holders of a majority in aggregate
principal amount of Debt Securities of such series. (Section 507)
10
The holders of a majority in aggregate principal amount of the Debt
Securities of any series affected and then outstanding will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to such series of Debt
Securities. (Section 512) The Indenture provides that, in case an Event of
Default shall occur and be continuing, the Trustee, in exercising its rights and
powers under the Indenture, will be required to use the degree of care of a
prudent man in the conduct of his own affairs. (Section 601) The Indenture
further provides that the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties under the Indenture unless it has reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is reasonably assured to it.
(Section 601)
The Company must furnish to the Trustee within 120 days after the end of
each fiscal year a statement signed by one of certain officers of the Company to
the effect that a review of the activities of the Company during such year and
of its performance under the Indenture and the terms of the Debt Securities has
been made, and, to the best of the knowledge of the signatories based on such
review, the Company has complied with all conditions and covenants of the
Indenture or, if the Company is in default, specifying such default. (Section
1004)
If any Debt Securities are denominated in a coin or currency other than
that of the United States, then for the purposes of determining whether the
holders of the requisite principal amount of Debt Securities have taken any
action as herein described, the principal amount of such Debt Securities shall
be deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Debt Securities are denominated
(as evidenced to the Trustee by an Officers' Certificate) as of the date the
taking of such action by the holders of such requisite principal amount is
evidenced to the Trustee as provided in the Indenture. (Section 104)
If any Debt Securities are Original Issue Discount Securities, then for
the purposes of determining whether the holders of the requisite principal
amount of Debt Securities have taken any action herein described, the principal
amount of such Debt Securities shall be deemed to be the portion of such
principal amount that would be due and payable at the time of the taking of such
action upon a declaration of acceleration of maturity thereof. (Section 101)
MODIFICATION OF THE INDENTURE
The Company and the Trustee may, without the consent of the holders of the
Debt Securities, enter into indentures supplemental to the Indenture for, among
others, one or more of the following purposes; (i) to evidence the succession of
another corporation to the Company, and the assumption by such successor of the
Company's obligations under the Indenture and the Debt Securities of any series;
(ii) to add covenants of the Company, or surrender any rights of the Company,
for the benefit of the holders of Debt Securities of any or all series; (iii) to
cure any ambiguity, omission, defect or inconsistency in such Indenture; (iv) to
establish the form or terms of any series of Debt Securities, including any
Subordinated
11
Securities; (v) to evidence and provide for the acceptance of any successor
Trustee with respect to one or more series of Debt Securities or to facilitate
the administration of the trusts thereunder by one or more trustees in
accordance with such Indenture; and (vi) to provide any additional Events of
Default (Section 901).
With certain exceptions, the Indenture or the rights of the holders of the
Debt Securities may be modified by the Company and the Trustee with the consent
of the holders of a majority in aggregate principal amount of the Debt
Securities of each series affected by such modification then outstanding, but no
such modification may be made without the consent of the holder of each
outstanding Debt Security affected thereby which would (i) change the maturity
of any payment of principal of, or any premium on, or any installment of
interest on any Debt Security, or reduce the principal amount thereof or the
interest or any premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any place of payment
where, or the coin or currency in which, any Debt Security or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof (or, in the
case of redemption or repayment, on or after the redemption date or the
repayment date, as the case may be), or (ii) reduce the percentage in principal
amount of the outstanding Debt Securities of any series, the consent of whose
holders is required for any such modification, or the consent of whose holders
is required for any waiver of compliance with certain provisions of the
Indenture or certain defaults thereunder and their consequences provided for in
the Indenture, or (iii) modify any of the provisions of certain Sections of the
Indenture, including the provisions summarized in this paragraph, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the holder of each
outstanding Debt Security affected thereby. (Section 902)
DISCHARGE AND DEFEASANCE
Unless otherwise set forth in the applicable Prospectus Supplement, the
Company can discharge or defease its obligations with respect to any series of
Debt Securities as set forth below. (Article Four)
The Company may discharge all of its obligations (except those set forth
below) to holders of any series of Debt Securities issued under any Indenture
that have not already been delivered to the Trustee for cancellation and that
have either become due and payable, or are by their terms due and payable within
one year (or scheduled for redemption within one year), by irrevocably
depositing with the Trustee cash or U.S. Government Obligations (as defined in
such Indenture), or a combination thereof, as trust funds in an amount certified
to be sufficient to pay when due the principal of, premium, if any, and
interest, if any, on all outstanding Debt Securities of such series and to make
any mandatory sinking fund payments, if any, thereon when due. (Section 401)
Unless otherwise provided in the applicable Prospectus Supplement, the
Company may also elect at any time to (a) defease and be discharged from all of
its obligations (except those set forth below) to holders of any series of Debt
Securities issued under each Indenture ("defeasance") or (b) be released from
all of its obligations with respect to certain covenants
12
applicable to any series of Debt Securities issued under each supplemental
Indenture ("covenant defeasance"), if, among other things: (i) the Company
irrevocably deposits with the Trustee cash or U.S. Government Obligations, or a
combination thereof, as trust funds in an amount certified to be sufficient to
pay when due the principal of, premium, if any, and interest, if any, on all
outstanding Debt Securities of such series and to make any mandatory sinking
fund payments, if any, thereon when due and such funds have been so deposited
for 91 days; (ii) such deposit will not result in a breach or violation of, or
cause a default under, any agreement or instrument to which the Company is a
party or by which it is bound; and (iii) the Company delivers to the Trustee an
opinion of counsel to the effect that the holders of such series of Debt
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance or covenant defeasance and that
defeasance or covenant defeasance will not otherwise alter the Federal income
tax treatment of such holders' principal and interest payments, if any, on such
series of Debt Securities. (Section 403)
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The Board of Directors of the Company (the "Board of Directors") is
authorized, without action by the holders of Common Stock, to issue up to
25,000,000 shares of Preferred Stock in one or more series. Prior to issuance of
shares of each series, the Board of Directors is required by the Delaware
General Corporation Law (the "DGCL") and the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") to adopt resolutions and file
a Certificate of Designations (the "Certificate of Designations") with the
Secretary of State of the State of Delaware, fixing for each such series the
designations, powers, preferences and rights of the shares of such series and
the qualifications, limitations or restrictions thereon, including, but not
limited to, dividend rights, dividend rate or rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, and the liquidation preferences as are permitted by
the DGCL. The Board of Directors could authorize the issuance of shares of
Preferred Stock with terms and conditions which could have the effect of
discouraging a takeover or other transaction which holders of some, or a
majority, of such shares might believe to be in their best interests or in which
holders of some, or a majority, of such shares might receive a premium for their
shares over the then-market price of such shares.
Subject to limitations prescribed by the DGCL, the Board of Directors is
authorized to fix the number of shares constituting each series of Preferred
Stock and the designations and powers, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof, including such provisions as may be desired
13
concerning voting, redemption, dividends, dissolution or the distribution of
assets, conversion or exchange, and such other subjects or matters as may be
fixed by resolution of the Board of Directors or duly authorized committee
thereof. The Preferred Stock offered hereby will, upon issuance and full payment
of the purchase price therefor, be fully paid and nonassessable and will not
have, or be subject to, any preemptive or similar rights.
Reference is made to the Prospectus Supplement relating to the series of
Preferred Stock being offered for the specific terms thereof, including: (i) the
title and stated value of such Preferred Stock; (ii) the number of shares of
such Preferred Stock offered, the liquidation preference per share and the
purchase price of such Preferred Stock; (iii) the dividend rate(s), period(s)
and/or payment date(s) or method(s) of calculation thereof applicable to such
Preferred Stock; (iv) whether dividends shall be cumulative or non-cumulative
and, if cumulative, the date from which dividends on such Preferred Stock shall
accumulate; (v) the procedures for any auction and remarketing, if any, for such
Preferred Stock; (vi) the provisions for a sinking fund, if any, for such
Preferred Stock; (vii) the provisions for redemption, if applicable, of such
Preferred Stock; (viii) any listing of such Preferred Stock on any securities
exchange; (ix) the terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into Common Stock, including the conversion
price (or manner of calculation thereof) and conversion period; (x) voting
rights, if any, of such Preferred Stock; (xi) a discussion of any material
and/or special Federal income tax considerations applicable to such Preferred
Stock; (xii) the relative ranking and preferences of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company; (xiii) any limitations on issuance of any series of
Preferred Stock ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation, dissolution or winding
up of the affairs of the Company; and (xiv) any other specific terms,
preferences, rights, limitations or restrictions of such Preferred Stock.
The transfer agent and registrar for each series of Preferred Stock will
be described in the related Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The following summary does not purport to be complete and is subject in
all respects to the applicable provisions of the DGCL and the Certificate of
Incorporation. The Company is presently authorized to issue 200,000,000 shares
of Common Stock, par value $0.01 per share. At the close of business on January
16, 1997, an aggregate of 68,386,262 shares of Common Stock were outstanding.
Subject to such preferential rights as may be granted by the Board of
Directors in connection with the future issuance of Preferred Stock, holders of
Common Stock are entitled to one vote for each share held. Such holders are not
entitled to cumulative voting for the purpose of electing directors and have no
preemptive or similar right to subscribe for, or to purchase, any shares of
Common Stock or other securities to be issued by the Company in the future.
Accordingly, the holders of more than 50% in voting power of the shares of
Common
14
Stock voting generally for the election of directors will be able to elect all
of the Company's directors. At January 16, 1997, Loews Corporation beneficially
owned 51.3% of the outstanding shares of Common Stock and is in a position to
control actions that require the consent of stockholders, including the election
of directors, amendment of the Certificate of Incorporation and any mergers or
any sale of substantially all of the assets of the Company.
Holders of shares of Common Stock have no exchange, conversion or
preemptive rights and such shares are not subject to redemption. All outstanding
shares of Common Stock are, and upon issuance and full payment of the purchase
price therefor the shares of Common Stock offered hereby will be, duly
authorized, validly issued, fully paid and nonassessable. Subject to the prior
rights, if any, of holders of any outstanding class or series of Preferred Stock
having a preference in relation to the Common Stock as to distributions upon the
dissolution, liquidation and winding-up of the Company and as to dividends,
holders of shares of Common Stock are entitled to share ratably in all assets of
the Company which remain after payment in full of all debts and liabilities of
the Company, and to receive ratably such dividends, if any, as may be declared
by the Board of Directors from time to time out of funds and other property
legally available therefor.
The Company is a Delaware corporation and is subject to Section 203
("Section 203") of the DGCL. In general, Section 203 will prevent an "interested
stockholder" (defined generally as a person owning 15% or more of a
corporation's outstanding voting stock) of the Company from engaging in a
"business combination" (as therein defined) with the Company for three years
following the date such person became an interested stockholder, unless (i)
before such person became an interested stockholder, the Board of Directors
approved the business combination in question, or the transaction which resulted
in such person becoming an interested stockholder, (ii) upon consummation of the
transaction that resulted in the interested stockholder becoming such, the
interested stockholder owns at least 85% of the voting stock of the Company
outstanding at the time such transaction commenced (excluding stock held by
directors who are also officers of the Company and by employee stock plans that
do not provide employees with rights to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer), or
(iii) following the transaction in which such person became an interested
stockholder, the business combination is approved by the Board of Directors and
authorized at a meeting of stockholders by the affirmative vote of the holders
of not less than 66-2/3% of the outstanding voting stock of the Company not
owned by the interested stockholder. Under Section 203, the restrictions
described above do not apply to certain business combinations proposed by an
interested stockholder following the announcement (or notification) of one of
certain extraordinary transactions involving the Company and a person who had
not been an interested stockholder during the preceding three years or who
became an interested stockholder with the approval of the Board of Directors,
and which transactions are approved or not opposed by a majority of the members
of the Board of Directors then in office who were directors prior to any person
becoming an interested stockholder during the previous three years or were
recommended for election or elected to succeed such directors by a majority of
such directors. Section 203 does not apply to Loews Corporation because it has
been more than three years since Loews Corporation became an interested
stockholder.
15
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, L.L.C., whose principal offices are located at 450 West
33rd Street, New York, New York 10001.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities or Preferred Stock. Securities Warrants may be issued independently
or together with any Debt Securities or shares of Preferred Stock offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities or shares of Preferred Stock. The Securities Warrants are to be
issued under Warrant Agreements to be entered into between the Company and the
Warrant Agent named in the Prospectus Supplement relating to the particular
issue of Securities Warrants (the "Warrant Agent"). The Warrant Agent will act
solely as an agent of the 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 summaries of certain provisions of the form of Warrant Agreement
and Securities Warrants do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
applicable Warrant Agreement and the Securities Warrants.
GENERAL
If Securities Warrants are offered, the Prospectus Supplement will
describe the terms of the Securities Warrants, including the following: (i) the
offering price; (ii) the currency, currencies or currency units for which
Securities Warrants may be purchased; (iii) the designation, aggregate principal
amount, currency, currencies or currency units and terms of the Debt Securities
purchasable upon exercise of the Securities Warrants and the price at which such
Debt Securities may be purchased upon such exercise; (iv) the designation,
number of shares and terms of the series of Preferred Stock purchasable upon
exercise of the Securities Warrants to purchase Preferred Stock and the price at
which such shares of Preferred Stock may be purchased upon such exercise; (v) if
applicable, the designation and terms of the Debt Securities or Preferred Stock
with which the Securities Warrants are issued, and the number of Securities
Warrants issued with each such Debt Security or share of Preferred Stock; (vi)
if applicable, the date on and after which the Securities Warrants and the
related Debt Securities or shares of Preferred Stock will be separately
transferable; (vii) the date on which the right to exercise the Securities
Warrants shall commence and the date (the "Expiration Date") on which such right
shall expire; (viii) whether the Securities Warrants will be issued in
registered or bearer form; (ix) a discussion of certain Federal income tax,
accounting and other special considerations, procedures and limitations relating
to the Securities Warrants; and (x) any other terms of the Securities Warrants.
Securities Warrants may be exchanged for new Securities Warrants of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the Prospectus Supplement.
Before the exercise of their Securities Warrants, holders of
16
Securities Warrants will not have any of the rights of holders of the Debt
Securities or shares of Preferred Stock purchasable upon such exercise,
including the right to receive payments of principal of, any premium on, or any
interest on, the Debt Securities purchasable upon such exercise or to enforce
the covenants in the Indenture or to receive payments of dividends, if any, on
the Preferred Stock purchasable upon such exercise or to exercise any applicable
right to vote.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder to purchase such principal
amount of Debt Securities or such number of shares of Preferred Stock at such
exercise price as shall in each case be set forth in, or calculable from, the
Prospectus Supplement relating to the Securities Warrant. Securities Warrants
may be exercised at such times as are set forth in the Prospectus Supplement
relating to such Securities Warrants. After the close of business on the
Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Securities Warrants may be
exercised by delivery to the Warrant Agent of the certificate evidencing such
Securities Warrants properly completed and duly executed and of payment as
provided in the Prospectus Supplement of the amount required to purchase the
Debt Securities or shares of Preferred Stock purchasable upon such exercise. The
exercise price will be the price applicable on the date of payment in full, as
set forth in the Prospectus Supplement relating to the Securities Warrants. Upon
receipt of such payment and the certificate representing the Securities Warrants
to be exercised properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the Debt
Securities or shares of Preferred Stock purchasable upon such exercise. If fewer
than all of the Securities Warrants represented by such certificate are
exercised, a new certificate will be issued for the remaining amount of
Securities Warrants.
17
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities offered hereby (1) through
underwriters or dealers; (2) through agents; (3) directly to purchasers; or (4)
through a combination of any such methods of sale. Any such underwriter, dealer
or agent may be deemed to be an underwriter within the meaning of the Securities
Act. The Prospectus Supplement relating to the Offered Securities will set forth
their offering terms, including the name or names of any underwriters, dealers
or agents, the purchase price of the Offered Securities and the proceeds to the
Company from such sale, any underwriting discounts, commissions and other items
constituting compensation to underwriters, dealers or agents, any initial public
offering price, any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers, and any securities exchanges on which
the Offered Securities may be listed.
If underwriters or dealers are used in the sale, the Offered Securities
will be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in the
Prospectus Supplement, the obligations of underwriters or dealers to purchase
the Offered Securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the Offered Securities
if any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid by underwriters or dealers to other
dealers may be changed from time to time.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers or agents to solicit offers by certain specified
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to any conditions set forth in the
Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
by the Company to payments they may be required to make in respect thereof. The
terms and conditions of such indemnification will
18
be described in an applicable Prospectus Supplement. Underwriters, dealers and
agents may be customers of, engage in transactions with, or perform services for
the Company in the ordinary course of business.
Each series of Offered Securities other than Common Stock will be a new
issue of securities with no established trading market. Any underwriters to whom
Offered Securities are sold by the Company for public offering and sale may make
a market in such Offered Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any Offered
Securities.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Weil, Gotshal & Manges LLP, 700 Louisiana, Suite 1600, Houston, Texas 77002,
and for the underwriters, dealers or agents, if any, by Andrews & Kurth L.L.P.,
425 Lexington Avenue, New York, New York 10017, unless otherwise specified in
the Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Company and subsidiaries as
of December 31, 1995 and 1994 and for each of the years in the three-year period
ended December 31, 1995, incorporated by reference in this Prospectus from the
Company's Annual Report on Form 10-K for the year ended December 31, 1995, have
been audited by Deloitte & Touche LLP, independent auditors, as indicated in
their report with respect thereto, and is incorporated by reference herein, in
reliance upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Arethusa (Off-Shore) Limited and
subsidiaries as of September 30, 1995 and 1994 and for each of the years in the
three-year period ended September 30, 1995, incorporated by reference in this
Prospectus from the Company's Current Report on Form 8-K dated May 13, 1996,
have been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto, and is incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting and
auditing.
-----------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
OFFERED SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.
-----------------------------
19
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
Securities and Exchange Commission Registration Fee.. $181,818.18
Trustee's Fees and Expenses.......................... 25,000.00
Printing Expenses.................................... 100,000.00
Rating Agencies' Fees................................ 100,000.00
Legal Fees and Expenses.............................. 200,000.00
Accountants' Fees and Expenses....................... 60,000.00
Blue Sky Fees and Expenses........................... 5,000.00
-------------------
Total............................................. $671,818.18
===================
- ---------------
* All amounts are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102 of the DGCL allows a corporation to eliminate the personal
liability of directors of a corporation to the corporation or to any of its
stockholders for monetary damage for a breach of his fiduciary duty as a
director, except in the case where the director breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved a stock
repurchase in violation of Delaware corporate law or obtained an improper
personal benefit. The Company's Restated Certificate of Incorporation contains a
provision which, in substance, eliminates directors' personal liability as set
forth above.
Section 145 of the DGCL provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director, officer, employee or agent of the corporation or is or was
serving at its request in such capacity in another corporation or business
association against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Company's Certificate
of Incorporation contains a provision which, in substance, provides for
indemnification as set forth above.
Reference is made to Section 6 of the form of Underwriting Agreement filed
as Exhibit 1.1 for additional indemnification provisions.
ITEM 16. EXHIBITS
1.1* -- Form of Underwriting Agreement.
4.1 -- Form of Indenture.
4.2** -- Form of Warrant Agreement.
II-1
4.3 -- Restated Certificate of Incorporation of Diamond Offshore Drilling, Inc.
(incorporated by reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995).
4.4 -- By-laws of Diamond Offshore Drilling, Inc. (incorporated by reference to
Exhibits 3.2, 3.2.1 and 3.2.2 of the Company's Registration Statement No. 333-
2680 on Forms S-4/S-1).
5.1* -- Opinion of Weil, Gotshal & Manges LLP, counsel for the Company.
10.1 -- Credit Agreement among the Company, various lending institutions, Bankers
Trust Company and Christiania Bank og Kreditkasse, New York Branch,
as Co-Arrangers, Bankers Trust Company, as Administrative Agent,
Christiania Bank og Kreditkasse, New York Branch, as Documentation
Agent, and The Fuji Bank, Limited, as Co-Agent, dated as of February
8, 1996 and amended and restated as of March 27, 1996 and further
amended and restated as of December 19, 1996.
10.2 -- Asset Purchase Agreement between Diamond M Onshore, Inc. and Drillers Inc.
dated as of November 12, 1996.
10.3 -- Amendment No. 1, dated as of December 31, 1996, to Asset Purchase
Agreement between Diamond M Onshore, Inc. and Drillers Inc. dated as of
November 12, 1996.
12.1* -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Arthur Andersen & Co.
23.3* -- Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).
24.1* -- Powers of Attorney.
25.1** -- Statement of Eligibility of Trustee on Form T-1.
- ---------------
* Previously filed.
** To be filed by amendment or incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, 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 this 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 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
II-2
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 Commission by the Company pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in this 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 registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering; and
(4) 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 that is
incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions described under Item 15 above, or
otherwise, the Company 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
Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company 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.
The undersigned 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company 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
Pre-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on January 22, 1997.
DIAMOND OFFSHORE DRILLING, INC.
By: /s/ Richard L. Lionberger
-----------------------------
Richard L. Lionberger
Vice President, General Counsel
and Secretary
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Pursuant to the requirements of the Securities Act of 1933, as amended,
this Pre-Effective Amendment No. 1 to the Registration Statement has been signed
by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Rose* President, Chief Executive Officer January 22, 1997
- --------------------------- and Director
Robert E. Rose (Principal executive officer)
/s/ Lawrence R. Dickerson* Senior Vice President and Chief January 22, 1997
- --------------------------- Financial Officer
Lawrence R. Dickerson (Principal financial officer)
/s/ Gary T. Krenek* Controller (Principal accounting January 22, 1997
- --------------------------- officer)
Gary T. Krenek
/s/ James S. Tisch* Chairman of the Board January 22, 1997
- ---------------------------
James S. Tisch
/s/ Herbert C. Hofmann* Director January 22, 1997
- ---------------------------
Herbert C. Hofmann
*By:/s/ Richard L. Lionberger
-----------------------------
Richard L. Lionberger
Attorney-in-Fact
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EXHIBIT INDEX
Exhibit
No. Exhibit
- --- -------
1.1* -- Form of Underwriting Agreement.
4.1 -- Form of Indenture.
4.2** -- Form of Warrant Agreement.
4.3 -- Restated Certificate of Incorporation of Diamond Offshore Drilling, Inc.
(incorporated by reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995).
4.4 -- By-laws of Diamond Offshore Drilling, Inc. (incorporated by reference to
Exhibits 3.2, 3.2.1 and 3.2.2 of the Company's Registration Statement No. 333-
2680 on Forms S-4/S-1).
5.1* -- Opinion and consent of Weil, Gotshal & Manges LLP, counsel for the
Company.
10.1 -- Credit Agreement among the Company, various lending institutions, Bankers
Trust Company and Christiania Bank og Kreditkasse, New York Branch, as Co-
Arrangers, Bankers Trust Company, as Administrative Agent, Christiania Bank
og Kreditkasse, New York Branch, as Documentation Agent, and The Fuji
Bank, Limited, as Co-Agent, dated as of February 8, 1996 and amended and
restated as of March 27, 1996 and further amended and restated as of
December 19, 1996.
10.2 -- Asset Purchase Agreement between Diamond M Onshore, Inc. and Drillers Inc.
dated as of November 12, 1996.
10.3 -- Amendment No. 1, dated as of December 31, 1996, to Asset Purchase
Agreement between Diamond M Onshore, Inc. and Drillers Inc. dated as of
November 12, 1996.
12.1* -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Arthur Andersen & Co.
23.3* -- Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).
24.1* -- Powers of Attorney.
25.1** -- Statement of Eligibility of Trustee on Form T-1.
- ---------------
* Previously filed.
** To be filed by amendment or incorporated herein by reference.