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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 1997
REGISTRATION NO. 333-20483
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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MESA INC.
MESA OPERATING CO.
(Exact name of registrant as specified in its charter)
TEXAS DELAWARE
(State or other jurisdiction of incorporation or organization)
1400 WILLIAMS SQUARE WEST
5205 NORTH O'CONNOR BOULEVARD
IRVING, TEXAS 75039
(972) 444-9001
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
75-2394500 75-2516853
(I.R.S. Employer Identification No.)
STEPHEN K. GARDNER
1400 WILLIAMS SQUARE WEST
5205 NORTH O'CONNOR BOULEVARD
IRVING, TEXAS 75039
(972) 444-9001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
CARLOS A. FIERRO
BAKER & BOTTS, L.L.P.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 953-6818
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable 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 REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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 FEBRUARY 5, 1997
PROSPECTUS
$500,000,000
MESA
DEBT SECURITIES
COMMON STOCK
Mesa Operating Co. ("MOC") may offer from time to time unsecured debt
securities consisting of notes, debentures or other evidences of indebtedness
(collectively, the "Debt Securities"). The Debt Securities will be guaranteed on
an unsecured basis by MESA Inc. (the "Company" and together with MOC, the
"Issuers"), of which MOC is a wholly owned subsidiary. The Company may also
offer and sell from time to time shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of the Company. The aggregate initial offering price
of the Debt Securities and the Common Stock to be offered hereby (the
"Securities") will not exceed $500,000,000 or, if applicable, the equivalent
thereof in any other currency or currency unit. The Securities may be offered as
separate series in amounts, at prices and on terms to be determined in light of
market conditions at the time of sale and set forth in a Prospectus Supplement.
The terms of each series of Debt Securities, including, where applicable,
the specific designation, aggregate principal amount, authorized denominations,
maturity, rate or rates and time or times of payment of any interest, any terms
for optional or mandatory redemption, which may include redemption at the option
of holders upon the occurrence of certain events, or payment of additional
amounts or any sinking fund provisions, any initial public offering price, the
net proceeds to MOC and any other specific terms in connection with the offering
and sale of such series will be set forth in a Prospectus Supplement.
The Securities may be sold directly by the Issuers to investors, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution." If any agents of the Issuers or any underwriters are
involved in the sale of any Securities in respect of which this Prospectus is
being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to the Issuers from such sale also will be set forth in a Prospectus
Supplement.
The Common Stock is listed on the New York Stock Exchange under the Symbol
MXP. Any Common Stock offered will be listed, subject to notice of issuance, on
such exchange.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING AN INVESTMENT
IN THE SECURITIES.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a 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 DATE OF THIS PROSPECTUS IS , 1997.
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NO DEALERS, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING COVERED
BY THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE ISSUERS. NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL, OR A SOLICITATION OF ANY
OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR
TO ANY PERSON WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission, 450
Fifth Street, NW, Judiciary Plaza, Washington, D.C. 20549; and at the following
regional offices of the Commission: 7 World Trade Center, New York, New York
10048 and Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661 and through the Commission's Internet site at www.sec.gov. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
at prescribed rates. The Company's Common Stock and its Series A Preferred Stock
are listed on the New York Stock Exchange and such reports, proxy statements and
other information may be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Issuers with the Commission under the Securities Act
with respect to the securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement, and reference is made to the
Registration Statement for further information with respect to the Issuers and
the securities offered hereby. Statements contained herein concerning the
provisions of any contract, agreement or any other document or exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete; with respect to each such contract, agreement or document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Prospectus, and subject in each case to
information contained in this Prospectus, are the following documents filed by
the Company with the Commission pursuant to the Exchange Act: (1) the Company's
Annual Report on Form 10-K/A for the fiscal year ended December 31, 1995, filed
January 27, 1997 (2) the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; (3) the
Company's Current Reports on Form 8-K filed March 1, 1996, April 29, 1996, June
26, 1996 and September 30, 1996; (4) the description of the Company's Common
Stock contained in the Company's Registration Statement on Form 8-A (File No.
1-10874), dated September 27, 1991; and (5) the description of the Company's
Series A Preferred Stock contained in the Company's Registration Statement on
Form 8-A (File No. 1-10874), filed May 20, 1996.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this Prospectus
from the date of filing of such document. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent
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that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statements as 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, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any and all of the documents incorporated by
reference herein (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference in such documents). Such request should
be directed to Investor Relations, MESA Inc., 1400 Williams Square West, 5205
North O'Connor Boulevard, Irving, Texas 75039 (telephone (972) 444-9001).
THE ISSUERS
The Company is a holding company and conducts its operations through its
wholly-owned subsidiary, MOC. The Issuers maintain their principal executive
offices at 1400 Williams Square West, 5205 North O'Connor Boulevard, Irving,
Texas 75039, where their telephone number is (972) 444-9001. Unless the context
otherwise requires, the term "Mesa" means the Company and its subsidiaries taken
as a whole and includes the Company's predecessors.
Mesa is one of the largest independent oil and gas companies in the United
States and considers itself one of the most efficient operators of domestic
natural gas properties.
RISK FACTORS
Prospective Investors should consider carefully the following factors
together with the information and financial data set forth elsewhere in this
Prospectus and any accompanying Prospectus Supplement prior to making an
investment decision.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes and any Prospectus Supplement may include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. All statements other than statements of
historical fact included in this Prospectus or in any Prospectus Supplement,
including without limitation those regarding Mesa's financial position and
liquidity, the amount of and its ability to make debt service payments and
payments of dividends, its strategic plans, cost reduction efforts and other
matters, are forward-looking statements. Although Mesa believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct. Important
factors that could cause actual results to differ materially from Mesa's
expectations are disclosed in this Prospectus and may be disclosed in any
Prospectus Supplement, including without limitation in conjunction with the
forward-looking statements included in this Prospectus or in any Prospectus
Supplement. All subsequent written and oral forward-looking statements
attributable to Mesa or persons acting on its behalf are expressly qualified in
their entirety by the Cautionary Statements.
SUBSTANTIAL INDEBTEDNESS
Mesa had long term indebtedness (including current maturities) of
approximately $839.7 million and stockholders' equity of approximately $249.2
million at September 30, 1996. Mesa's level of indebtedness will have several
important effects on its future operations, including that (i) a portion of
Mesa's cash flow from operations will be dedicated to the payment of interest on
its indebtedness and will not be available for other purposes, (ii) the
covenants contained in Mesa's bank credit facility (the "Credit Facility") and
in the indentures governing Mesa's 10 5/8% Senior Subordinated Notes due 2006
(the "Senior Subordinated Notes") and Mesa's 11 5/8% Senior Subordinated
Discount Notes due 2006 (the "Discount Notes" and, together with the Senior
Subordinated Notes, the "Notes") require Mesa to meet certain financial tests
and other restrictions, will limit its ability to borrow additional funds, to
grant liens and to dispose of assets and will
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affect Mesa's flexibility in planning for and reacting to changes in its
business, including possible acquisition activities, and (iii) Mesa's ability to
obtain additional financing in the future for working capital, capital
expenditures, acquisitions, general corporate purposes or other purposes may be
impaired. At December 31, 1996, Mesa had outstanding $325 million in Senior
Subordinated Notes, $159 million in Discount Notes and $319 million under the
Credit Facility (with $195 million of additional borrowing capacity, net of
letter of credit obligations).
Mesa's ability to meet its debt service obligations and to reduce its total
indebtedness will be dependent upon Mesa's future performance, which will be
subject to oil and gas prices, Mesa's level of production and to general
economic conditions and financial, business and other factors affecting the
operations of Mesa, many of which are beyond its control. There can be no
assurance that Mesa's future performance will not be adversely affected by such
changes in oil and gas prices and/or production nor by such economic conditions
and/or financial, business and other factors.
HISTORY OF LOSSES
Mesa had a net loss of $67.3 million for the nine months ended September
30, 1996 and had net losses of $79.2 million, $89.2 million, $102.4 million,
$83.4 million and $57.6 million for the years ended December 31, 1991, 1992,
1993, 1994 and 1995, respectively. Mesa was profitable in the first two fiscal
quarters of 1996, with net income of $1.1 million and $4.5 million in the first
and second quarters of 1996, respectively. In the third quarter of 1996, Mesa
had a net loss of $72.9 million, which included an extraordinary loss totaling
approximately $59.4 million related to the early extinguishment of long-term
debt associated with the completion of a recapitalization of its balance sheet
(the "Recapitalization"). During 1997, and assuming no change in its
capitalization, Mesa's annual interest expense is expected to be approximately
$85 million, with approximately $65 million payable in cash, which amounts are
expected to vary in subsequent years based on outstanding borrowings and
interest rates under the Credit Facility and the accretion of interest on the
Discount Notes. The 8% dividend on the Company's Series A 8% Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock") and the Company's
Series B Cumulative Convertible Preferred Stock (the "Series B Preferred Stock"
and, together with the Series A Preferred Stock, the "Preferred Stock") will be
paid in kind (with additional shares of Preferred Stock) rather than in cash
until at least September 2000. Mesa may continue to incur net losses and, to the
extent that natural gas prices are low, such losses may be substantial. See
"--Volatility of Natural Gas and NGL Prices."
CONTROL BY SIGNIFICANT SHAREHOLDER
DNR-MESA Holdings L.P., a Texas limited partnership ("DNR"), whose sole
general partner is Rainwater Inc., a Texas corporation owned by Richard E.
Rainwater, owned approximately 61.2 million shares of Series B Preferred Stock,
which represented approximately 32.9% of Mesa's fully diluted common shares
(excluding outstanding stock options) as of December 31, 1996. Additionally, DNR
has special voting rights granted to it as holder of the Series B Preferred
Stock which allows it to elect a majority of the directors on Mesa's board.
Accordingly, DNR's board representatives have significant power and authority
over the management and affairs of Mesa and, consequently, DNR has significant
control over Mesa.
VOLATILITY OF NATURAL GAS AND NGL PRICES
Revenues generated from Mesa's operations are highly dependent upon the
sales prices of, and demand for, natural gas and natural gas liquids ("NGLs").
Historically, the markets for natural gas and NGLs have been volatile and are
likely to continue to be volatile in the future. Prices for natural gas and NGLs
are subject to wide fluctuation in response to market uncertainty, changes in
supply and demand and a variety of additional factors, all of which are beyond
the control of Mesa. These factors include domestic and foreign political
conditions, the overall level of supply of and demand for oil, natural gas and
NGLs, the price of imports of oil and natural gas, weather conditions, the price
and availability of alternative fuels and overall economic conditions. Mesa's
future financial condition and results of operations will be dependent, in part,
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upon the prices received for Mesa's natural gas and NGL production, as well as
the costs of acquiring, finding, developing and producing reserves.
As of December 31, 1995, approximately 65% of Mesa's proved reserves,
calculated on an energy-equivalent basis, were natural gas and substantially all
of its other reserves were NGLs. Substantially all of Mesa's sales of natural
gas and NGLs are made in the spot market, or pursuant to contracts based on spot
market prices, and not pursuant to long term, fixed price contracts. Any
significant decline in prices for natural gas and NGLs could have a material
adverse effect on Mesa's financial condition, results of operations and
quantities of reserves recoverable on an economic basis. Should the industry
experience significant price declines from current levels or other adverse
market conditions, Mesa may not be able to generate sufficient cash flows from
operations to meet its obligations and make planned capital expenditures.
The availability of a ready market for Mesa's natural gas and NGL
production also depends on a number of factors, including the demand for and
supply of natural gas and NGLs and the proximity of reserves to, and the
capacity of, oil and gas gathering systems, pipelines or trucking and terminal
facilities.
USE AND RISKS OF HEDGING TRANSACTIONS AND SPECULATIVE INVESTMENTS
In order to manage its exposure to price risks in the marketing of its oil
and natural gas, Mesa has in the past and may in the future enter into oil and
natural gas futures contracts on the New York Mercantile Exchange ("NYMEX"),
fixed price delivery contracts and financial swaps as hedging devices. While
intended to reduce the effects of volatility of the price of oil and natural
gas, such transactions may limit potential gains by Mesa if oil and natural gas
prices were to rise substantially over the price established by the hedge. In
addition, such transactions may expose Mesa to the risk of financial loss in
certain circumstances, including instances in which (i) production is less than
expected, (ii) there is a widening of price differentials between delivery
points for Mesa's production and Henry Hub (in the case of NYMEX futures
contracts) or delivery points required by fixed price delivery contracts to the
extent they differ from those of Mesa's production or to the extent Mesa has not
otherwise fixed such price differential, (iii) Mesa's customers or the counter
parties to its futures contracts fail to purchase or deliver the contracted
quantities of oil or natural gas or (iv) a sudden, unexpected event materially
impacts oil or natural gas prices. Mesa also invests from time to time in oil
and gas or other futures contracts which are not intended to be hedges of its
oil and gas production. However, such speculative investments in energy futures
contracts, which in prior periods have been profitable, are expected to be
limited in the future.
RESERVES AND FUTURE NET CASH FLOWS
Information relating to Mesa's proved oil and gas reserves is based upon
engineering estimates. Reserve engineering is a subjective process of estimating
the recovery from underground accumulations of oil and natural gas that cannot
be measured in an exact manner, and the accuracy of any reserve estimate is a
function of the quality of available data and of engineering and geological
interpretation and judgment. Estimates of economically recoverable oil and gas
reserves and of future net cash flows necessarily depend upon a number of
variable factors and assumptions, such as historical production from the area
compared with production from other producing areas, the assumed effects of
regulations by governmental agencies and assumptions concerning future oil and
gas prices, future operating costs, severance and excise taxes, development
costs and workover and remedial costs, all of which may in fact vary
considerably from actual results. Because all reserve estimates are to some
degree speculative, the quantities of oil and natural gas that are ultimately
recovered, production and operation costs, the amount and timing of future
development expenditures and future oil and natural gas sales prices may all
vary from those assumed in these estimates and such variances may be material.
In addition, different reserve engineers may make different estimates of reserve
quantities and cash flows based upon the same available data.
The present values of estimated future net cash flows should not be
construed as the current market value of the estimated proved oil and gas
reserves attributable to Mesa's properties. In accordance with applicable
requirements of the Commission, the estimated discounted future net cash flows
from proved reserves are generally based on prices and costs as of the date of
the estimate, whereas actual future prices and costs may
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be materially higher or lower. Actual future net cash flows also will be
affected by factors such as the amount and timing of actual production, supply
and demand for oil and gas, curtailments or increases in consumption by gas
purchasers and changes in governmental regulations or taxation. Mesa's producing
properties in the Hugoton field and the West Panhandle field are subject to
production limitations imposed by state regulatory authorities, by contracts or
both, and any future limitation on production would affect the expected decline
in reserves. The timing of actual future net cash flows from proved reserves,
and thus their actual present value, will be affected by the timing of both the
production and the incurrence of expenses in connection with development and
production of oil and gas properties. In addition, the 10% discount factor,
which is required by the Commission to be used to calculate discounted future
net cash flows for reporting purposes, is not necessarily the most appropriate
discount factor based on interest rates in effect from time to time and risks
associated with Mesa's business or the oil and gas industry in general.
Estimates of Mesa's oil and gas reserves include revisions of certain
reserve estimates attributable to proved properties included in the preceding
year's estimates. Such revisions reflect additional information from subsequent
activities, production history of the properties involved and any adjustments in
the projected economic life of such properties resulting from changes in product
prices. In addition, the upward revisions at year end 1994 reflect a change by
Mesa to the use of reserve estimates prepared by Mesa's internal reserve
engineers instead of estimates prepared by an independent petroleum engineering
firm. Any downward revisions in the future could adversely affect Mesa's
financial condition, borrowing base under the Credit Facility, future prospects
and the market value of its securities.
REPLACEMENT OF RESERVES
Mesa's future performance depends in part upon its ability to acquire, find
and develop additional oil and gas reserves that are economically recoverable.
Without successful acquisition, development or exploration activities, Mesa's
reserves will decline. No assurances can be given that Mesa will be able to
acquire or find and develop additional reserves on an economic basis.
Mesa's business is capital intensive and, to maintain its asset base of
proved oil and gas reserves, a significant amount of cash flow from operations
must be reinvested in property acquisitions, development or exploration
activities. To the extent cash flow from operations is reduced and external
sources of capital become limited or unavailable, Mesa's ability to make the
necessary capital investments to maintain or expand its asset base would be
impaired. Without such investment, Mesa's oil and gas reserves would decline.
In recent years, the majority of Mesa's capital expenditures have been
dedicated to developing and upgrading its existing long lived reserve base
through infill drilling of its Hugoton reserves, additions to its compression
and gathering system and pipeline interconnects, and the construction and
expansion of gas processing plants. Relatively modest expenditures have been
made to explore for, develop or acquire new reserve additions. In order to
increase reserves and production, Mesa must continue its development and
exploration drilling program or undertake other replacement activities. Mesa's
strategy includes increasing its reserve base through acquisitions and
exploitation of producing properties and continued exploitation of its existing
properties. The successful acquisition of producing properties requires an
assessment of recoverable reserves, future oil and gas prices and operating
costs, potential environmental and other liabilities and other factors. Such
assessments are necessarily inexact and their accuracy inherently uncertain.
There can be no assurance that Mesa's acquisition activities and exploration and
development projects will result in increases in reserves. Mesa's operations may
be curtailed, delayed or canceled as a result of lack of adequate capital and
other factors, such as title problems, weather, compliance with governmental
regulations or price controls, mechanical difficulties or shortages or delays in
the delivery of equipment. Furthermore, while Mesa's revenues may increase if
prevailing gas and oil prices increase significantly, Mesa's finding costs for
additional reserves could also increase. In addition, the costs of exploration
and development may materially exceed initial estimates.
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OPERATING HAZARDS; LIMITED INSURANCE COVERAGE
Mesa's operations are subject to hazards and risks inherent in drilling for
and production and transportation of natural gas and oil, such as fires, natural
disasters, explosions, encountering formations with abnormal pressures,
blowouts, cratering, pipeline ruptures and spills, any of which can result in
loss of hydrocarbons, environmental pollution, personal injury claims and other
damage to properties of Mesa and others. These risks could result in substantial
losses to Mesa due to injury and loss of life, severe damage to and destruction
of property and equipment, pollution and other environmental damage and
suspension of operations. Moreover, Mesa's Gulf of Mexico offshore operations
are subject to a variety of operating risks peculiar to the marine environment,
such as hurricanes or other adverse weather conditions, to more extensive
governmental regulation, including regulations that may, in certain
circumstances, impose strict liability for pollution damage, and to interruption
or termination of operations by governmental authorities based on environmental
or other considerations.
As protection against operating hazards, Mesa maintains insurance coverage
against some, but not all, potential losses. Mesa's coverages include, but are
not limited to, operator's extra expense, physical damage on certain assets,
employer's liability, comprehensive general liability, automobile, workers'
compensation and loss of production income insurance and limited coverage for
sudden environmental damages, but Mesa does not believe that insurance coverage
for environmental damages that occur over time is available at a reasonable
cost. Moreover, Mesa does not believe that insurance coverage for the full
potential liability that could be caused by sudden environmental damages is
available at a reasonable cost. Accordingly, Mesa may be subject to liability or
may lose substantial portions of its properties in the event of environmental
damages. The occurrence of an event that is not fully covered by insurance could
have an adverse impact on Mesa's financial condition and results of operations.
GOVERNMENTAL REGULATION
General. Mesa's operations are affected from time to time in varying
degrees by political developments and federal and state laws and regulations. In
particular, oil and natural gas production, operations and economics are or have
been affected by price controls, taxes and other laws relating to the oil and
natural gas industry, by changes in such laws and by changes in administrative
regulations. Mesa cannot predict how existing laws and regulations may be
interpreted by enforcement agencies or court rulings, whether additional laws
and regulations will be adopted, or the effect such changes may have on its
business or financial condition.
Environmental. Mesa's operations are subject to numerous laws and
regulations governing the discharge of materials into the environment or
otherwise relating to environmental protection. These laws and regulations
require the acquisition of a permit before drilling commences, restrict the
types, quantities and concentration of various substances that can be released
into the environment in connection with drilling and production activities,
limit or prohibit drilling activities on certain lands lying within wilderness,
wetlands and other protected areas, and impose substantial liabilities for
pollution which might result from Mesa's operations. Moreover, the recent trend
toward stricter standards in environmental legislation and regulation is likely
to continue. For instance, legislation has been proposed in Congress from time
to time that would reclassify certain crude oil and natural gas exploration and
production wastes as "hazardous wastes" which would make the reclassified wastes
subject to much more stringent handling, disposal and clean-up requirements. If
such legislation were to be enacted, it could have a significant impact on the
operating costs of Mesa, as well as the oil and gas industry in general.
Initiatives to further regulate the disposal of crude oil and natural gas wastes
are also pending in certain states, and these various initiatives could have a
similar impact on Mesa. Mesa could incur substantial costs to comply with
environmental laws and regulations. In addition to compliance costs, government
entities and other third parties may assert substantial liabilities against
owners and operators of oil and gas properties for oil spills, discharge of
hazardous materials, remediation and clean-up costs and other environmental
damages, including damages caused by previous property owners. The imposition of
any such liabilities on Mesa could have a material adverse effect on Mesa's
financial condition and results of operations.
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The Oil Pollution Act of 1990 imposes a variety of regulations on
"responsible parties" related to the prevention of oil spills. The
implementation of new, or the modification of existing, environmental laws or
regulations, including regulations promulgated pursuant to the Oil Pollution Act
of 1990, could have a material adverse impact on Mesa.
COMPETITION
Mesa operates in the highly competitive areas of natural gas and oil
production, development and exploration with other companies. Mesa also competes
with companies for the acquisition of desirable natural gas and oil properties,
as well as for the equipment and labor required to develop and operate such
properties. Factors affecting Mesa's ability to compete in the marketplace
include the availability of funds and information relating to a property, the
standards established by Mesa for the minimum projected return on investment,
the availability of alternate fuel sources and the intermediate transportation
of gas. Mesa's competitors include major integrated oil companies and a
substantial number of independent energy companies, many of which may have
substantially larger financial resources, staffs and facilities than Mesa.
USE OF PROCEEDS
Except as otherwise described in any Prospectus Supplement, the net
proceeds from the sale of Securities will be used for general corporate
purposes, which may include acquisitions, working capital, capital expenditures,
repayment of indebtedness and repurchases and redemptions of securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated fixed charges in excess of
earnings for the Company for the indicated periods.
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------------------
1996 1995 1994 1993 1992 1991
------------- ------ ------ ------- ------ ------
Fixed charges in excess of earnings(a)... 67,441 58,476 83,460 109,650 95,451 82,582
- ---------------
(a) For purposes of calculating fixed charges in excess of earnings, earnings
consist of net income (loss) after depreciation, depletion and amortization,
but before fixed charges, income taxes, minority interest and the loss of an
investment accounted for under the equity method. Fixed charges consist of
interest expense and capitalized interest. Earnings were not adequate to
cover fixed charges in the indicated periods.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain provisions of the Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Debt Securities offered by any Prospectus Supplement and the extent, if
any, to which such general provisions may apply to the Debt Securities so
offered will be described in the Prospectus Supplement relating to such Debt
Securities. The Debt Securities constitute either Senior Debt Securities or
Subordinated Debt Securities. The Debt Securities will be issued under one or
more separate indentures among MOC, the Company and a U.S. banking institution,
as trustee. Senior Debt Securities will be issued under a "Senior Indenture" and
Subordinated Debt Securities will be issued under a "Subordinated Indenture."
Each of the Senior Indenture and the Subordinated Indenture is referenced herein
as an "Indenture" and both of such indentures are referenced herein collectively
as the "Indentures." A form of each of the Indentures is filed as an exhibit to
the Registration Statement.
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The terms of the Debt Securities include those stated in the applicable
Indentures and those made part of such Indentures by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Debt
Securities are subject to all such terms, and prospective purchasers are
referred to the applicable Indentures and the Trust Indenture Act for a
statement of those terms. The following summaries of certain provisions of each
of the Indentures do not purport to be complete, and are subject to and are
qualified in their entirety by reference to all of the provisions of the
respective Indenture, including the definitions of certain terms used therein.
Wherever particular defined terms of the Indentures are referenced, it is
intended that such defined terms shall be incorporated herein by reference in
their entirety. Unless otherwise noted, such references to particular defined
terms refer to such defined terms in each of the Indentures. Capitalized terms
used but not defined in this section captioned "Description of Debt Securities"
shall have the respective meanings given to them in the Indentures. Further
terms of the Debt Securities in respect of which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement.
RANKING OF THE DEBT SECURITIES
The Senior Debt Securities will rank pari passu with all other debt of MOC
that is unsecured and unsubordinated. The Subordinated Debt Securities will rank
junior to all Senior Debt (as hereinafter defined) of MOC that may be
outstanding from time to time. See "-- Provisions Applicable to the Subordinated
Indenture."
GUARANTEES
MOC's payment obligations under the Debt Securities will be unconditionally
guaranteed (the "Guarantees") by the Company. The Guarantees relating to any
Subordinated Debt Securities will be subordinated to indebtedness of the Company
to the same extent and in the same manner as the Subordinated Debt Securities
are subordinated to Senior Debt. See "-- Provisions Applicable to the
Subordinated Debt Indenture."
Each Indenture will provide that the Company may not consolidate with or
merge into or sell, assign, transfer or lease all or substantially all of its
assets to another corporation or other person other than MOC, unless (i) the
person is a corporation organized under the laws of the United States of America
or any state thereof, (ii) the person assumes by supplemental indenture all the
obligations of the Company relating to such Indenture and the Debt Securities
issued thereunder, (iii) immediately after the transaction, no Default or Event
of Default exists.
GENERAL PROVISIONS APPLICABLE TO EACH OF THE INDENTURES
Debt Securities consisting of unsecured debentures, notes and other
evidences of indebtedness may be issued from time to time in series under each
of the Indentures. The Indentures do not limit the aggregate principal amount of
Debt Securities or of any particular series of Debt Securities that may be
issued thereunder nor do they, unless otherwise stated in the applicable
Prospectus Supplement, restrict transactions between MOC and its Affiliates, the
payment of dividends by MOC or the transfer of assets by MOC to the Company or
any subsidiaries of the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms and other information with respect to the Debt Securities being offered
hereby: (i) the title of such Debt Securities; (ii) any limit on the aggregate
principal amount of such Debt Securities; (iii) the date or dates (or manner of
determining the same) on which such Debt Securities will mature; (iv) the rate
or rates (or manner of determining the same) at which such Debt Securities will
bear interest, if any, and the date or dates from which such interest will
accrue; (v) the dates (or manner of determining the same) on which such interest
will be payable and the Regular Record Dates for such Interest Payment Dates;
(vi) the place or places where the principal of and premium, if any, and
interest, if any, on such Debt Securities will be payable; (vii) the obligation
of MOC, if any, to redeem or purchase Debt Securities pursuant to any mandatory
or optional sinking fund or analogous provisions; (viii) the date, if any, after
which, and the price or prices at which, such Debt Securities are payable
pursuant to any optional or mandatory redemption provisions; (ix) the
denominations in which such Debt Securities will be issuable, if other than
denominations of $1,000 and any
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integral multiple thereof; (x) whether such Debt Securities are to be issued as
discounted Debt Securities; (xi) any "Events of Default" with respect to such
Debt Securities in addition to those described herein; (xii) whether such Debt
Securities are to be issued, in whole or in part, in the form of one or more
global securities ("Global Securities") and, if so, the identity of the
depositary, if any, for such Global Securities; (xiii) the identity of any
trustee, authenticating agent, paying agent or registrar with respect to such
Debt Securities, if other than the Trustee under such Indenture; (xiv) the
period or periods within which, the price or prices at which, and the terms and
conditions upon which Debt Securities of such series may be converted into other
Debt Securities of MOC; and (xv) any other specific terms of such Debt
Securities.
Pursuant to each Indenture, and unless otherwise indicated in the
applicable Prospectus Supplement, principal of and premium, if any, and
interest, if any, on the Debt Securities issued pursuant to such Indenture will
be payable, and the transfer of such Debt Securities will be registrable, at the
office or agency of the Trustee under such Indenture in New York City, except
that, at the option of MOC, interest may be paid by mailing a check on or before
the due date to the person entitled thereto as it appears on the Security
Register for such Debt Securities. No service charge will be made to any Holder
for any transfer or exchange of Debt Securities, except that MOC may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto.
Some or all of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or bearing interest at a rate that at the time
of issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the applicable Prospectus Supplement.
Unless otherwise stated in the applicable Prospectus Supplement, there are
no covenants or provisions contained in the Indentures that may afford Holders
of Debt Securities protection in the event of a change of control of the Company
or MOC or a restructuring or other highly leveraged transactions involving the
Company or MOC.
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 (a "Depositary") identified in the Prospectus Supplement
relating to such series.
Book-Entry Securities
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities that are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of a Global
Security in registered form, the Depositary for such Global Security will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of institutions that have accounts with such Depositary or its
nominee ("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by MOC, if such Debt
Securities are offered and sold directly by MOC. Ownership of beneficial
interests in such Global Securities will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such Global Securities will be shown on, and the transfer of
such ownership interests will be effected only through, records maintained by
the Depositary or its nominee for such Global Security. Ownership of beneficial
interests in Global Securities by persons that hold through participants will be
shown on, and the transfer of such ownership interests within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of Debt Securities take
physical delivery of such Debt Securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security in registered form, 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
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Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in such Global Securities will not be entitled to have
Securities of the series represented by such Global Debt Security registered in
their names, will not receive or be entitled to receive physical delivery of
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the applicable Indenture.
Payment of principal of and premium, if any, and interest, if any, on Debt
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or holder of the Global Security representing such Debt Securities. None
of MOC or the Trustee, the Paying Agent or the 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 in a Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
MOC expects that the Depositary for Debt Securities of a particular series,
upon receipt of any payment of principal of and premium, if any, and interest,
if any, on a Global Security, will immediately credit participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Security as shown on the records of such
Depositary. MOC 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 Debt Securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants. However, MOC has no control over the practices of the Depositary
or the participants and there can be no assurance that these practices will not
be changed.
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 such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor. If a Depositary for Debt Securities
of a particular series is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by MOC within 90 days,
MOC will issue Debt Securities in definitive registered form in exchange for the
Global Security or Debt Securities representing such Debt Securities. In
addition, MOC may at any time and in its sole discretion determine not to have
any Debt Securities represented by one or more Global Securities and, in such
event, will issue Debt Securities in definitive form in exchange for the Global
Securities representing such Debt Securities. In any such instance, an owner of
a beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of 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.
Restrictions on Mergers, Consolidations and Transfers of Assets
Each of the Indentures provides that MOC will not consolidate or merge into
or sell, assign, transfer or lease all or substantially all of its assets to
another person unless (i) the person is a corporation organized under the laws
of the United States of America or any state thereof, (ii) the person assumes by
supplemental indenture all the obligations of MOC relating to such Indenture and
the Debt Securities issued thereunder and (iii) immediately after the
transaction no Default or Event of Default exists. Upon any such consolidation,
merger, sale, assignment or transfer, the successor corporation will be
substituted for MOC under such Indenture and MOC may thereafter liquidate and
dissolve. The successor corporation may then exercise every power and right of
MOC under such Indenture, and MOC will be released from all of its liabilities
and obligations in respect of such Debt Securities and such Indenture. Each
Indenture also provides that in the event MOC leases all or substantially all of
its assets, the lessee corporation will be the successor to MOC and may exercise
every power and right of MOC such Issuer under such Indenture, but MOC will not
be released from its obligations to pay the principal of and premium, if any,
and interest, if any, on the Debt Securities issued under such Indenture.
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Amendments of the Indentures
Amendments of each of the Indentures or the Debt Securities of any series
issued thereunder may be made by MOC and the Trustee thereunder without the
consent of the Holders of such Debt Securities (i) to cure any ambiguity, defect
or inconsistency or to make such provisions with respect to matters or questions
arising under such Indenture as may be necessary or desirable and not
inconsistent with such Indenture or with any indenture supplemental thereto or
any Board Resolution establishing any series of such Debt Securities, provided
that such amendment does not adversely affect the rights of the Holders thereof,
(ii) to comply with the merger or sale of assets provision in such Indenture,
(iii) to add additional covenants to such Indenture, (iv) to establish the form
or terms of Debt Securities of any additional series to be issued thereunder,
(v) to provide for the acceptance of appointment of a successor Trustee under
such Indenture or (vi) to provide for the exchange of Global Securities for Debt
Securities issued in definitive form and to make a appropriate changes for such
purpose.
Each of the Indentures provides that amendments of such Indenture affecting
the Debt Securities of any series issued under such Indenture or amendments of
the Debt Securities of such series issued under such Indenture may be made by
MOC and the Trustee under such Indenture with the consent of the Holders of a
majority in aggregate principal amount of the Debt Securities of such series;
provided that, without the consent of each Holder affected, no such amendment
shall be made that will (i) reduce the percentage in principal amount of the
Debt Securities issued under such Indenture whose Holders must consent to an
amendment, (ii) reduce the rate of or change the time for payment of interest on
any Debt Security issued under such Indenture, (iii) reduce the principal of,
change the Stated Maturity of, reduce the amount payable on redemption of or
alter the requirements with respect to the mandatory redemption, if any, of any
Debt Security issued under such Indenture, (iv) make any such Debt Security
payable in money other than that stated in such Debt Security, (v) make any
change in the provisions of such Indenture with respect to waiver of existing
Defaults, rights of Holders to receive payment and to bring suit for the
enforcement of such rights, or the requirement of obtaining the written consent
of each affected Holder to certain amendments of such Indenture or any Debt
Security issued thereunder or (vi) in the case of the Subordinated Indenture,
modify the subordination provisions thereof in a manner adverse to the Holders.
Events of Default
Each of the Indentures will provide that each of the following constitutes
an Event of Default with respect to any series of Debt Securities issued under
such Indenture: (i) a default for 30 consecutive days in the payment when due of
interest on any Debt Security of such series (in the case of Subordinated Debt
Securities, whether or not prohibited by the subordination provisions of the
Subordinated Indenture); (ii) a default in the payment when due of the principal
of or premium, if any, on any Debt Security of any series (in the case of
Subordinated Debt Securities, whether or not prohibited by the subordination
provisions of the Subordinated Indenture); (iii) the failure by MOC to comply
with its obligations under "Restrictions on Mergers, Consolidations and
Transfers of Assets" above; (iv) the failure by MOC for 60 consecutive days
after notice from the applicable Trustee or the Holders of at least 25% in
aggregate principal amount of any Debt Security of such series then outstanding
to comply with any of its other agreements in the applicable Indenture or
applicable Debt Securities for the benefit of such Debt Securities of such
series; (v) except as permitted by the Indentures, the Guarantee of the Debt
Securities of such series shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or the Company, or any person acting on behalf of the Company, shall deny
or disaffirm its obligations under such guarantee; (vi) a default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed by MOC or
the Company thereunder, whether such indebtedness now exists or is created after
the date of the Indentures, which default (a) is caused by a failure to pay such
indebtedness within any applicable grace period after final maturity (a "Payment
Default") or (b) results in the acceleration of such indebtedness prior to its
final maturity and, in each case, the principal amount of such indebtedness,
together with the principal amount of any other such indebtedness under which
there is then existing a Payment Default or the maturity of which has been so
accelerated, aggregates $10,000,000 or more; provided, that if any such default
is cured or waived or any such
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acceleration rescinded, or such indebtedness is repaid, within a period of 10
days from the continuation of such default beyond the applicable grace period or
the occurrence of such acceleration, as the case may be, such Event of Default
under the Indentures and any consequential acceleration of the Debt Securities
shall be automatically rescinded; (vii) final judgments or orders rendered
against MOC that are unsatisfied and that require the payment in money, either
individually or in an aggregate amount, that is more than $10,000,000 over the
coverage under applicable insurance policies and either (a) commencement by any
creditor of an enforcement proceeding upon such judgment (other than a judgment
that is stayed by reason of pending appeal or otherwise) or (b) the occurrence
of a 60-day period during which a stay of such judgment or order, by reason of
pending appeal or otherwise, was not in effect; (viii) certain events of
bankruptcy or insolvency with respect to MOC or the Company; and (ix) any other
event established as an event of default in accordance with such Indenture with
respect to Debt Securities of such series.
If any Event of Default occurs and is continuing with respect to any series
of Debt Securities, the applicable Trustee or the Holders of at least 25% in
principal amount of any Debt Securities of such series then outstanding may
declare the principal of and accrued but unpaid interest on all the Debt
Securities of such series to be due and payable immediately. MOC may not pay the
Debt Securities of such series until five business days after such holders
receive such notice of acceleration and, in the case of Subordinated Debt
Securities, thereafter, may pay the Debt Securities of such series only to the
extent the subordination provisions of the Subordinated Indenture permit such
payment. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to MOC, all
outstanding Debt Securities will become due and payable without further action
or notice. Holders any series of Debt Securities may not enforce the applicable
Indenture of such Debt Securities except as provided in the applicable
Indenture. Subject to certain limitations, Holders of a majority in principal
amount outstanding of the Debt Securities of such series may direct the relevant
Trustee in its exercise of any trust or power. Each Trustee may withhold from
Holders of the Debt Securities of such series notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if it determines that withholding notice is in
the interest of the Holders of the Debt Securities of such series.
After a declaration of acceleration under an Indenture, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Trustee, Holders of a majority in principal amount outstanding of the
Debt Securities of such series, by written notice to MOC and the applicable
Trustee, may rescind such declaration if (i) MOC has paid or deposited with the
applicable Trustee a sum sufficient to pay (a) all sums paid or advanced by such
Trustee under the applicable Indenture and the reasonable compensation,
expenses, disbursements and advances of such Trustee, its agents and counsel and
(b) all overdue interest on the Debt Securities of such series, if any, (ii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (iii) all Events of Default, other than the
nonpayment of principal of, premium, if any, and interest on the Debt Securities
of such series that has become due solely by such declaration of acceleration,
have been cured or waived.
The Holders of a majority in aggregate principal amount outstanding of the
Debt Securities of such series by notice to the relevant Trustee may on behalf
of the Holders of all of the Debt Securities of such series waive any existing
Default or Event of Default and its consequences under the relevant Indenture
except a continuing Default or Event of Default in the payment of interest or
premium on, or the principal of, the Debt Securities of such series.
MOC and the Company are required to deliver to each Trustee annually a
statement regarding compliance with the relevant Indenture, and MOC and the
Company are required, within five business days after becoming aware of any
Default or Event of Default, to deliver to each Trustee a statement specifying
such Default or Event of Default.
Defeasance of the Indentures and Securities
Each of the Indentures provides that MOC may at any time satisfy its
obligations with respect to payments of principal of and premium, if any, and
interest, if any, on the Debt Securities of any series issued under such
Indenture by irrevocably depositing in trust with the Trustee under such
Indenture money or U.S. Government Obligations or a combination thereof
sufficient to make such payments when due without
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reinvestment thereof. If such a deposit is sufficient to make all payments of
(i) interest, if any, on the Debt Securities of such series prior to and on
their redemption or maturity, as the case may be, and (ii) principal of and
premium, if any, on the Debt Securities of such series when due upon redemption
or at Stated Maturity, as the case may be, then all the obligations of MOC with
respect to the Debt Securities of such series and such Indenture insofar as it
relates to the Debt Securities of such series will be satisfied and discharged
(except as otherwise provided in such Indenture). In the event of any such
defeasance, Holders of the Debt Securities of such series would be able to look
only to such trust fund for payment of principal of and premium, if any, and
interest, if any, on the Debt Securities of such series until Stated Maturity or
redemption.
Each of the Indentures also provides that such a trust may only be
established if, among other things, (i) MOC has obtained an opinion of legal
counsel (which may be based on a ruling from, or published by, the Internal
Revenue Service) to the effect that Holders of the Debt Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to
federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit, defeasance and discharge had
not occurred and (ii) at that time, with respect to any series of Debt
Securities issued under such Indenture and then listed on The New York Stock
Exchange, the rules of The New York Stock Exchange do not prohibit such deposit
with such Trustee.
Annual Reports by the Trustee
To the extent required by the Trust Indenture Act, the Trustee under each
Indenture shall, within 60 days after May 15 in each year, furnish to each
Holder of Debt Securities issued under such Indenture an annual report that
complies with Section 313 of the Trust Indenture Act. The Indentures do not
require that MOC or the respective Trustee thereunder furnish any other reports,
documents or information to the Holders of Debt Securities.
Notices and Communications
Notices or communications to Holders of Debt Securities will be given by
first-class mail to the addresses of such Holders as they appear in the Debt
Security Register.
Holders of Debt Securities may communicate with other Holders of such Debt
Securities with respect to their rights under such Debt Securities or the
Indenture governing such Debt Securities pursuant to the provisions of Section
312(b) of the Trust Indenture Act, which require a trustee to provide
securityholders access to information regarding the addresses of other
securityholders in certain situations.
Governing Law
The Indentures and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
PROVISIONS APPLICABLE TO THE SUBORDINATED INDENTURE
The payment of principal of, premium, if any, and interest on the
Subordinated Debt Securities and any other payment obligations of MOC in respect
of any Subordinated Debt Securities (including any obligation to repurchase the
Subordinated Debt Securities) will be subordinated in right of payment, as set
forth in the Subordinated Indenture, to the prior payment in full in cash of all
Senior Debt (as defined below), whether outstanding on the date of the
Indentures or thereafter incurred.
Upon any payment or distribution of property or securities to creditors of
MOC of any Subordinated Debt Securities in a liquidation or dissolution of MOC
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to MOC or its property, or in an assignment for the benefit
of creditors or any marshaling of MOC's assets and liabilities, the holders of
Senior Debt will be entitled to receive payment in full in cash of all
obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not a claim for such
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interest would be allowed in such proceeding) before the Holders of the
Subordinated Debt Securities will be entitled to receive any payment with
respect to the Subordinated Debt Securities and, until all obligations with
respect to Senior Debt are paid in full in cash, any distribution to which the
Holders of the Subordinated Debt Securities would be entitled shall be made to
the holders of Senior Debt (except that Holders of the Subordinated Debt
Securities may receive payments made from the trust described under
"-- Defeasance of the Indentures and Securities" if the deposit into such trust
was permitted to be made under the terms of the applicable Indenture).
MOC also may not make any payment (whether by redemption, purchase,
retirement, defeasance or otherwise) upon or in respect of such Subordinated
Debt Securities (except from the trust described under "-- Defeasance of the
Indentures and Securities") if (i) a default in the payment of the principal of,
premium, if any, or interest on Designated Senior Debt (as defined below) occurs
or (ii) any other default occurs and is continuing with respect to Designated
Senior Debt that permits, or with the giving of notice or passage of time or
both (unless cured or waived) will permit, holders of the Designated Senior Debt
as to which such default relates to accelerate its maturity and the Trustee
receives a notice of such default (a "Payment Blockage Notice") from a
representative of the holders of any Designated Senior Debt.Cash payments on any
Subordinated Debt Securities shall be resumed (a) in the case of a payment
default, upon the date on which such default is cured or waived and (b) in case
of a nonpayment default, the earliest of (1) the date on which such nonpayment
default is cured or waived, (2) the date the applicable Payment Blockage Notice
is retracted by written notice to the Trustee from a representative of the
holders of the Designated Senior Debt that have given such Payment Blockage
Notice and (3) 179 days after the date on which the applicable Payment Blockage
Notice is received, unless any of the events described in clause (i) of this
paragraph has then occurred and is continuing or a default of the type described
in clause (ix) under the caption "Events of Default" has occurred. No new period
of payment blockage may be commenced unless and until 360 days have elapsed
since the date of commencement of the payment blockage period resulting from the
immediately prior Payment Blockage Notice. No nonpayment default in respect of
Designated Senior Debt that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Subordinated Indenture will further require that MOC promptly notify
Holders of Senior Debt if payment of such Subordinated Debt Securities is
accelerated because of an Event of Default.As a result of the subordination
provisions described above, in the event of a liquidation or insolvency of
MOC.Holders of such Subordinated Debt Securities may recover less ratably than
creditors of MOC who are holders of Senior Debt. The principal amount of
unsubordinated borrowings of Mesa outstanding at September 30, 1996 would have
been approximately $355 million.
The terms "Senior Debt" and "Designated Senior Debt" are defined in the
Subordinated Indenture to have the meaning given to such term in the Board
Resolution or supplemental indenture pursuant to which Debt Securities may be
issued in accordance with such Subordinated Indenture. The definition of such
terms will be set forth in the Prospectus Supplement respecting any such Debt
Securities.
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DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The authorized capital stock of the Company consists of 600 million shares
of Common Stock, par value $.01 per share, and 500 million shares of Preferred
Stock, par value $.01 per share, of which 140 million shares have been
designated as Series A Preferred Stock, 140 million shares have been designated
as Series B Preferred Stock and 1,000,000 shares have been designated as Series
A Junior Participating Preferred Stock. As of December 31, 1996, 64,279,568
shares of Common Stock, 60,443,259 shares of Series A Preferred Stock and
61,200,427 shares of Series B Preferred Stock were issued and outstanding.
COMMON STOCK
Holders of Common Stock have no preemptive rights to purchase or subscribe
for securities of the Company, and the Common Stock is not convertible into any
other securities or subject to redemption by the Company.
Subject to the rights of the holders of any class of capital stock of the
Company having any preference or priority over the Common Stock, the holders of
the Common Stock are entitled to dividends in such amounts as may be declared by
the Board of Directors of the Company from time to time out of funds legally
available for such payments and, in the event of liquidation, to share ratably
in any assets of the Company remaining after payment in full of all creditors
and provision for any liquidation preferences on any outstanding Preferred Stock
ranking prior to the Common Stock.
American Stock Transfer & Trust Company serves as registrar and transfer
agent for the Common Stock.
PREFERRED STOCK
The Board of Directors, without further action by the shareholders, is
authorized to issue up to 500 million shares of preferred stock in one or more
series and to fix and determine as to any series all the relative rights and
preferences of shares in such series, including, without limitation,
preferences, limitations or relative rights with respect to redemption rights,
conversion rights, if any, voting rights, if any, dividend rights and
preferences on liquidation.
The terms of the Series A Preferred Stock and Series B Preferred Stock are
identical in all respects, except as described below under "Voting Rights" and
"Transferability; Conversion of Series B to Series A Preferred Stock."
Voting Rights. Subject to certain special voting rights of the holders of
Series B Preferred Stock (described below), holders of Series A and Series B
Preferred Stock will generally have the right to vote (on an as-converted basis)
as a single class with the holders of Common Stock on all other matters coming
before the Company's stockholders, except matters for which class voting is
required under the Company's Articles of Incorporation, including the Statement
of Resolution establishing the Preferred Stock, or the Texas Business
Corporation Act (the "TBCA").
With respect to any matter for which class voting is required by the TBCA,
except as otherwise described herein or required by law, the holders of Series A
and Series B Preferred Stock will vote together as a single class and not as
separate classes or series apart from each other, including any vote to approve
or adopt (i) any plan of merger, consolidation or share exchange for which the
TBCA requires a stockholder vote; (ii) any disposition of assets for which the
TBCA requires a stockholder vote; and (iii) any dissolution of the Company for
which the TBCA requires a stockholder vote.
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The following matters will require the approval of the holders of at least
a majority of the outstanding Series A and Series B Preferred Stock, voting
together as a single class:
(i) the authorization, creation or issuance, or any increase in the
authorized or issued amount, of any class or series of stock ranking senior
to or in parity with the Series A or Series B Preferred Stock or any
security convertible into or exchangeable for any such class or series
(provided that, if the holders of Series A and Series B are affected
differently, each series will vote as a separate class); or
(ii) any amendment of the Company's Articles of Incorporation to
eliminate cumulative voting.
Without the affirmative vote or consent of the holders of two-thirds of the
shares of Series A Preferred Stock voting as a separate class, the Company may
not adopt any amendment to the Articles of Incorporation or the Bylaws that
would materially affect the terms of the Series A Preferred Stock. Without the
affirmative vote or consent of the holders of at least a majority of the shares
of Series B Preferred Stock voting as a separate class, the Company may not
adopt any amendment to the Articles of Incorporation or the Bylaws that would
materially affect the terms of the Series B Preferred Stock.
For so long as any shares of Series B Preferred Stock remain outstanding,
the affirmative vote or consent of the holders of at least a majority of such
shares will be required in order to permit, affect or validate the amendment,
alteration or repeal of any provisions of the Articles of Incorporation
(including the Statement of Resolution relating to the Series A and Series B
Preferred Stock) or Bylaws of the Company that would limit the authority of the
Board to amend or repeal any provision of The Company's Bylaws, or that would
adversely affect any rights, preferences, privileges or voting power of the
Series B Preferred Stock differently from the rights, preferences, privileges or
voting power of the Series A Preferred Stock (to the extent such rights,
preferences, privileges or voting power of such two series are the same prior to
such amendment).
For so long as the Minimum Ownership Condition is satisfied, the holders of
the Series B Preferred Stock will be entitled, voting separately as a class, to
elect a majority of the members of the Company's Board (excluding any Series A
Directors, as defined below). The directors elected by the holders of Series B
Preferred Stock (the "Series B Directors") may be removed with or without cause,
and may only be removed by a vote or consent of the holders of a majority of the
outstanding shares of Series B Preferred Stock, voting separately as a class.
Vacancies among the Series B Directors will be filled by a majority vote of the
remaining Series B Directors or by the holders of Series B Preferred Stock. Upon
any termination of the right of the holders of Series B Preferred Stock to elect
Series B Directors, (i) the Series B Directors then serving may continue to hold
office for the remainder of their term, subject to the right of the majority of
the other directors (other than any Series A Directors) to request their prior
resignation, and (ii) upon the expiration of the term of office or earlier
resignation of each Series B Director, the size of the Board will automatically
be reduced accordingly unless a majority of the non-Series B Directors by
resolution determine otherwise and elect additional directors to fill any
resulting vacancies.
If the Company is in arrears in the payment of dividends (whether payable
in cash or in kind) on the shares of Series A and Series B Preferred Stock for a
total of six quarters, then the size of the Board will automatically be
increased by two additional directors and the holders of Series A Preferred
Stock, voting as a separate class, will have the exclusive right to elect two
directors (the "Series A Directors") immediately and at the next and every
subsequent annual meeting of shareholders called for the election of directors.
The right of the Series A Preferred holders to elect the Series A Directors will
terminate when all dividends accumulated on the Series A Preferred Stock have
been paid in full, subject to revesting at such time as the Company is again in
arrears in the payment of dividends.
During any period in which the holders of Series A Preferred Stock are
entitled to elect Series A Directors, or the holders of Series B Preferred Stock
are entitled to elect Series B Directors, the holders of Series A and Series B
Preferred Stock will have certain special rights to call a special meeting of
the Company in lieu of the Company's annual meeting or for the purpose of
electing Series A or Series B Directors. At a meeting held for the purpose of
electing a Series A or Series B Director, at least one-third of the outstanding
shares of Series A Preferred Stock or Series B Preferred Stock, as applicable,
present in person or by proxy, will be required to constitute a quorum.
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During any period in which the holders of Series B Preferred Stock are
entitled to elect Series B Directors, (i) the holders of Series B Preferred
Stock will not be entitled to vote in the election of any directors other than
the Series B Directors, (ii) no Series B Director will have the right to vote in
the election of any person to fill any vacancy on the Board, other than a
vacancy of a Series B Director, and all such rights with respect to non-Series A
and Series B Directors will be exercised for and on behalf of the Board by a
majority of the non-Series A and Series B Directors, and (iii) only the
non-Series A and Series B Directors will have the right to vote in any action by
or on behalf of the Board with respect to nominating persons to serve as
non-Series A and Series B Directors to be elected at any meeting of shareholders
that is held after the 1996 annual meeting of shareholders. The persons to be
nominated by or on behalf of the Board for election as non-Series A and B
Directors at the 1996 annual meeting will be the persons most recently
designated as such nominees by action of the Board prior to the date of the
First Closing (or, if any of such nominees shall be unable or unwilling to
serve, such other person or persons as shall be designated by the other such
nominee or nominees), unless otherwise agreed after such date by the unanimous
vote of all non-Series A and B Directors then in office. Nothing in clause (ii)
or (iii) above shall limit or restrict the right of holders of shares of Common
Stock and Series A Preferred Stock to nominate and to elect, subject to and in
accordance with applicable law, the other provisions of the Articles of
Incorporation and the Bylaws, persons to serve as non-Series A and Series B
Directors. The foregoing provision may not be amended without (x) the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock and (y) the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock.
Dividends. Subject to the satisfaction of certain conditions described
below, holders of Preferred Stock will be entitled to receive, as and when
declared by the Company out of funds legally available therefor, cumulative
dividends at the rate of 8.0% per annum of the stated value (the "Stated Value")
of such shares (initial stated value of $2.26), compounded quarterly. Dividends
will be payable quarterly in arrears on the last business day of each March,
June, September and December, beginning September 30, 1996. Prior to the fourth
anniversary of the issuance of the Preferred Stock, dividends will be payable in
additional shares of Preferred Stock, based upon their Stated Value. On and
after the fourth anniversary of the issue date, the Company may elect to pay
dividends in cash rather than shares of Preferred Stock for any quarter in which
any of the following conditions is satisfied as of the record date for such
dividend:
Fixed Charge Coverage Ratio. The Company's average Fixed Charge
Coverage Ratio at the end of the four preceding quarters is in excess of
2.5. "Fixed Charge Coverage Ratio" means the ratio of (i) the sum of (A)
Consolidated EBITDA plus (B) one-third of gross operating rents paid before
sublease income (as defined by Standard & Poor's Corporation), if any
("Gross Rents") to (ii) the sum of (A) interest expense, both expensed and
capitalized, of the Company and its consolidated subsidiaries, plus (B)
one-third of Gross Rents plus (C) scheduled principal amortization of
indebtedness (including borrowed money and capitalized leases) of the
Company and its consolidated subsidiaries. "Consolidated EBITDA" means the
consolidated net income or loss of the Company for the period, excluding
gains and losses not arising from operations (including interest income,
gains and losses from investments, gains and losses from dispositions of
oil and gas properties, collections and settlements of claims and
litigation, adjustments of contingency reserves and other extraordinary
gains and losses), plus, to the extent the following have been deducted in
determining such income or loss, interest expense, income taxes,
depreciation, depletion and amortization expense and impairment expense.
Gas Price Realization. The Average Gas Equivalent Price realized by
the Company on an Mcf equivalent basis (using a 6:1 conversion ratio)
during the four preceding quarters as reported in the Company's financial
statements is in excess of $2.95. "Average Gas Equivalent Price" means the
average price received by the Company from sales of oil and gas production,
to be calculated as follows:
(i) the aggregate revenues of the Company and its consolidated
subsidiaries during such period from sales of natural gas, natural gas
liquids and oil and condensate produced (other than that used for fuel,
and shrinkage) and sold by the Company and its consolidated
subsidiaries, as reported in the Company's consolidated financial
statements, divided by
(ii) the sum of (A) the total volume, on an Mcf basis, of natural
gas produced (other than that used for fuel, and shrinkage) and sold by
the Company and its consolidated subsidiaries during such
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period plus (B) the product of 6 times the total number of barrels of
natural gas liquids, oil and condensate produced (other than that used
for fuel, and shrinkage) and sold by the Company and its consolidated
subsidiaries during such period, as derived from the Company's
consolidated financial statements.
Stock Price Threshold. The average closing price of the Common Stock
during any 90 consecutive trading days preceding the tenth day prior to the
record date for any dividend payment date after the fourth anniversary of
the issue date is more than three times the conversion price then in
effect.
If the stock price threshold described above is met, the Company will
thereafter have the option to pay dividends either in kind or in cash on any
subsequent dividend payment date, regardless of any subsequent changes in the
price of the Common Stock. However, the indentures governing the Notes and the
Credit Facility may limit the Company's ability to pay cash dividends even if
permitted by the terms of the Preferred Stock.
To the extent dividends are not paid in cash or in kind on a scheduled
dividend payment date, all accrued but unpaid dividends will be added to the
Stated Value of each share of Preferred Stock outstanding and shall remain a
part thereof until paid, and dividends will accrue and be paid thereafter on the
basis of the Stated Value, as adjusted.
Conversion. Shares of Series A and Series B Preferred Stock are convertible
into shares of Common Stock at any time at the option of the holder, at an
initial conversion ratio of one share of Common Stock per share of Preferred
Stock. The conversion ratio is subject to customary anti-dilution adjustment in
the event the Company (a) subdivides the outstanding shares of Common Stock into
a greater number of shares; (b) combines the outstanding shares of Common Stock
into a smaller number of shares; (c) declares, orders, pays or makes any
dividend or other distribution to holders of Common Stock payable in Common
Stock; (d) declares, orders, pays or makes any dividend or other distribution to
all holders of Common Stock, other than a dividend payable in shares of Common
Stock (including dividends or distributions payable in cash, evidences of
indebtedness, rights, options or warrants to subscribe for or purchase shares of
Common Stock or other securities, or any other securities or other property, but
excluding any rights to purchase stock or other securities if such rights are
not separable from the Common Stock except upon occurrence of a contingency
beyond the control of the Company); or (e) issues or sells any shares of Common
Stock or any rights, options, warrants to subscribe for or purchase shares of
Common Stock or shares having the same rights, privileges and preferences as the
Common Stock or securities convertible into Common Stock or equivalent common
stock, at a price per share of Common Stock or equivalent common stock (or
having a conversion price per share, in the case of a security convertible into
shares of Common Stock or equivalent common stock) less than the market price of
the Common Stock on the date of such issue or sale, other than (i) the
conversion or redemption of shares of Series A or Series B Preferred Stock, (ii)
the payment of any stock dividend on the Series A or Series B Preferred Stock,
(iii) the issuance of options to officers, directors and employees of the
Company and its subsidiaries to purchase shares of Common Stock, including any
such options as are issued and outstanding as of the original issue of the
Series B Preferred Stock, (iv) the issuance and sale of Common Stock upon
exercise of any rights, options or warrants described in the foregoing clause
(iii) or in clause (d) above or (v) the issuance and sale of Common Stock in an
underwritten public offering at a price of not less than 95% of the closing
price of the Common Stock on the date of pricing such offering.
If, at any time after the original issue date, the Company is a party to
any transaction (including a merger, consolidation, statutory share exchange,
sale of all or substantially all of the Company's assets or recapitalization of
the Common Stock), as a result of which shares of Common Stock (or any other
securities of the Company then issuable upon conversion of the Series A or
Series B Preferred Stock) will be converted into the right to receive stock,
securities or other property (including cash) or any combination thereof (a
"Fundamental Change Transaction"), then the shares of Series A and Series B
Preferred Stock remaining outstanding will thereafter no longer be convertible
into Common Stock (or such other securities), but instead each share will be
convertible into the kind and amount of stock and other securities and property
receivable upon the consummation of such Fundamental Change Transaction by a
holder of that number of shares of
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Common Stock (or such other securities) into which one share of Series A or
Series B Preferred Stock was convertible immediately prior to such Fundamental
Change Transaction (assuming such holder of Common Stock or other securities
failed to exercise any right of election as to the kind of consideration to be
received in such Fundamental Change Transaction). The Company is prohibited from
being a party to any Fundamental Change Transaction after which shares of Series
A and Series B Preferred Stock will remain outstanding unless the terms of such
Fundamental Change Transaction are consistent with the foregoing, and it may not
consent or agree to the occurrence of any such Fundamental Change Transaction
until it has entered into an agreement with the successor or purchasing entity,
as the case may be, for the benefit of the holders of the Series A and Series B
Preferred Stock containing provisions enabling such holders to convert such
shares into the consideration received by holders of Common Stock (or other
securities of the Company then issuable upon conversion of Series A or Series B
Preferred Stock), at the conversion ratio then in effect, after such Fundamental
Change Transaction. In the event that, as a result of an adjustment pursuant to
a Fundamental Change Transaction, the Series A and Series B Preferred Stock
become convertible into any securities other than shares of Common Stock, the
number of such other securities issuable upon conversion will be subject to
adjustment to prevent dilution and adjustment in the event of a successive
Fundamental Change Transaction in a manner and on terms as nearly equivalent as
practicable to those described herein.
Redemption. Subject to any restrictions imposed by the terms of the New
Credit Facility or the indentures governing the Notes, the Company may, at its
option, redeem all or part of the outstanding shares of Series A and Series B
Preferred Stock (pro rata or by lot among the outstanding shares of both series)
on any dividend payment date after the thirtieth day following the tenth
anniversary of the original date of issue of the Series B Preferred Stock. All
outstanding shares of Series A and Series B Preferred Stock are subject to
mandatory redemption on June 30, 2008. The redemption price upon any optional or
mandatory redemption will be equal to the Stated Value per share of the shares
to be redeemed, plus an amount equal to the dollar amount of all accrued and
unpaid dividends through the redemption date that have not been added to the
Stated Value of such shares. The redemption price may be paid either in cash or
in shares of Common Stock, at the option of the Company as announced 30 days
prior to the redemption date, with the number of shares of Common Stock used to
pay the redemption price to be determined based upon the average trading price
during the 20 day period ending five days before the redemption date.
Liquidation. Each share of Series A Preferred Stock and Series B Preferred
Stock will rank prior to each share of Common Stock with respect to the
distribution of assets upon a liquidation, dissolution or winding-up of the
Company. The Series A Preferred Stock and Series B Preferred Stock will be pari
passu as to liquidation rights. In the event of any such liquidation,
dissolution or winding-up, each holder of a share of Series A Preferred Stock or
Series B Preferred Stock will be entitled to receive, before any distribution to
the holder of Common Stock, a liquidation preference equal to the Stated Value
of such shares, plus all accrued and unpaid dividends thereon.
Ranking. The Series A Preferred Stock and the Series B Preferred Stock rank
on a parity with each other as to payment of dividends and distributions and
upon liquidation, dissolution or winding-up of the Company. In the event that
the Company is a party to any merger, consolidation or share exchange in which
the Series A Preferred Stock or Series B Preferred Stock is converted or
exchanged into any other securities, property, cash or other consideration, the
securities, property, cash or other consideration into which the Series A and
Series B Preferred Stock may be converted or exchanged must be identical in kind
and amount per share, and no shares of Series A or Series B Preferred Stock may
be converted or exchanged into any securities, property, cash or other
consideration unless all shares of Series A and Series B Preferred Stock may be
converted or exchanged into the same kind and amount per share of securities,
property, cash or other consideration. The Common Stock and the Series A Junior
Participating Preferred Stock will rank junior to the Series A and Series B
Preferred Stock with respect to the payments required or permitted to made to
the holders of such securities pursuant to their respective governing
instruments.
Authorization by Non-Series A and Series B Directors. A majority of the
Company's directors, other than Series A Directors and Series B Directors, is
required to make the determinations required or permitted (i) as to whether to
make payment of the redemption price of Series A and Series B Preferred Stock in
cash or in kind, (ii) as to whether to exercise the Company's option to redeem
outstanding shares of Series A or Series B
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Preferred Stock and (iii) as to whether to make payment of any dividends
declared by the Board on the Series A and Series B Preferred Stock in cash or in
kind on or after the fourth anniversary of the issue date (subject to the
requirement that the Company have sufficient cash legally available to make any
cash dividend payment).
Certain Covenants of the Company. For so long as any shares of Series A or
Series B Preferred Stock are outstanding, the Company must at all times reserve
and keep available for issuance upon the conversion of such shares such number
of its authorized but unissued shares of Common Stock as will be sufficient to
permit the conversion of all outstanding shares of Series A and Series B
Preferred Stock and all other securities and instruments convertible into shares
of Common Stock. The Company must endeavor to make the shares of stock that may
be issued upon redemption or conversion of Series A or Series B Preferred Stock
eligible for trading on any national securities exchange or automated quotation
system upon or through which the Common Stock is then traded. Prior to the
delivery of any securities upon redemption or conversion of Series A or Series B
Preferred Stock, the Company must endeavor to comply with all federal and state
securities laws and regulations requiring the registration of such securities
with, or the approval of or consent to the delivery of such securities by, any
governmental authority. The Company must pay all taxes and other governmental
charges (other than income or franchise taxes) that may be imposed with respect
to the issue or delivery of shares of Common Stock upon conversion or redemption
of shares of Series A or Series B Preferred Stock, but will not be required to
pay any transfer taxes incurred as a result of the issuance of shares of Common
Stock in a name other than that of the registered holder of the converted or
redeemed shares of Preferred Stock.
Transferability; Conversation of Series B to Series A Preferred Stock. The
Series A Preferred Stock offered hereby, and the shares of Common Stock issuable
upon conversion thereof, have been registered under the Securities Act and the
Exchange Act. Accordingly, shares of Series A Preferred Stock and shares of
Common Stock issuable upon conversion thereof will generally be freely
transferrable by the holders thereof. The Series A Preferred Stock is listed for
trading on the New York Stock Exchange under the symbol "MXPPrA."
Upon any transfer of shares of Series B Preferred Stock, or the beneficial
ownership thereof, to any person other than DNR, its partners and their
respective affiliates, such shares will automatically convert to an equal number
of shares of Series A Preferred Stock. In addition, at such time as the Minimum
Ownership Condition is no longer met, all shares of Series B Preferred Stock
then outstanding will automatically convert into an equal number of shares of
Series A Preferred Stock.
The Company has entered into a Registration Rights Agreement with DNR which
gives DNR certain demand and "piggyback" registration rights.
CONFIDENTIAL VOTE
The Company's Bylaws provide for an independent third party to collect and
tabulate shareholders' proxies so as to keep the votes of shareholders
confidential from the Company and other persons soliciting proxies, except to
the extent otherwise required by law or to resolve any dispute with respect
thereto.
SPECIAL MEETINGS
Special meetings of the shareholders of the Company may be called by the
chief executive officer, the Board of Directors or by shareholders holding not
less than 20% of the outstanding voting stock of the Company. Except as
otherwise provided in the resolutions of the Board of Directors establishing any
class or series of preferred stock, shareholders may not act by written consent
without a meeting.
VOTING
Holders of Common Stock and Series B Preferred Stock are, and holders of
Series A Preferred Stock will be, entitled to cast one vote per share on matters
submitted to a vote of shareholders, other than election or removal of
directors, which is subject to cumulative voting. In cumulative voting for
directors, each
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shareholder is entitled to a number of votes equal to the number of shares held
multiplied by the number of directors to be elected; the shareholder may cast
all such votes for a single director or may cast them for any or all of the
nominees in any manner the shareholder chooses. Each director will be elected
annually. Any director may be removed, with or without cause, at any meeting of
shareholders called expressly for that purpose, by a vote of the holders of a
majority of the outstanding shares entitled to vote in the election of such
director, except that, if less than the entire board is to be removed, no
director may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board.
Subject to the rights of the holders of the Series A Preferred Stock and
the Series B Preferred Stock and any additional voting rights that may be
granted to holders of future classes or series of stock and to the additional
voting requirements described in the next paragraph, the Company's Articles of
Incorporation require the affirmative vote of holders of a majority of the
outstanding shares entitled to vote thereon to approve any amendment to the
Articles of Incorporation, dissolution of the Company, sale of all or
substantially all the assets of the Company, share exchange or merger for which
a vote is required by the Texas Business Corporation Act.
The Articles of Incorporation of the Company contain an "equal price"
provision that applies to certain business combination transactions involving
any person or group that beneficially owns 20% or more of the aggregate voting
power of all of the outstanding stock of the Company (a "Related Person"). The
provision requires the affirmative vote of holders of at least 80% of the voting
stock of the Company to approve any merger, consolidation, sale or lease of all
or substantially all of the assets of the Company, issuance or transfer of the
Company's securities or certain other transactions involving the Related Person.
This voting requirement is not applicable to certain transactions, including (i)
any transaction in which the consideration to be received by the holders of each
class of stock is the same in form and amount as that paid in a tender offer in
which the Related Person acquired at least 50% of the outstanding shares of each
such class and which was consummated not more than one year earlier, (ii) any
other transaction that meets certain other specified pricing criteria or (iii)
any other transaction approved by the Company's continuing directors (as defined
in the Articles of Incorporation). This provision could have the effect of
delaying or preventing a change of control of the Company in a transaction or
series of transactions that did not satisfy the "equal price" criteria.
Approval of any other matter not described above that is submitted to the
shareholders requires the affirmative vote of the holders of a majority of the
shares entitled to vote represented at the meeting. The holders of a majority of
the shares entitled to vote shall constitute a quorum at meetings of
shareholders.
The Company's Bylaws provide that shareholders who wish to nominate
directors or to bring business before a shareholders' meeting must notify the
Company and provide certain pertinent information at least 80 days before the
meeting date (or within ten days after public announcement pursuant to the
Bylaws of the meeting date, if the meeting date has not been publicly announced
at least 90 days in advance).
LIMITATION OF DIRECTOR LIABILITY
The Articles of Incorporation of the Company contain a provision that
limits the liability of the Company's directors as permitted by the Texas
Business Corporation Act. The provision eliminates the personal liability of
directors to the Company, and its shareholders may be unable to recover monetary
damages against directors for negligent or grossly negligent acts or omissions
in violation of their duty of care. The provision does not change the liability
of a director for breach of his duty of loyalty to the Company or to
shareholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, an act or omission for which the
liability of a director is expressly provided for by an applicable statute, or
in respect of any transaction from which a director received an improper
personal benefit. Pursuant to the Articles of Incorporation, the liability of
directors will be further limited or eliminated without action by shareholders
if Texas law is amended to further limit or eliminate the personal liability of
directors.
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PLAN OF DISTRIBUTION
The Issuers may sell the Securities in and/or outside the United States:
(i) through underwriters or dealers; (ii) directly to a limited number of
purchasers or to a single purchaser; or (iii) through agents. The Prospectus
Supplement with respect to the Securities will set forth the terms of the
offering of the Securities, including the name or names of any underwriters or
agents, the purchase price of the Securities and the proceeds to the Company
from such sale, any delayed delivery arrangements, any underwriting discounts
and other items constituting underwriters' compensation, any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Securities to be named in the Prospectus
Supplement relating to such offering and, if an underwriting syndicate is used,
the managing underwriter or underwriters will be set forth on the cover of such
Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters to purchase the Securities
will be subject to conditions precedent and the underwriters will be obligated
to purchase all the Securities if any are purchased.
If dealers are utilized in the sale of Securities in respect of which this
Prospectus is delivered, the Issuers will sell such Securities to dealers as
principals. The dealers may then resell such Securities to the public at varying
prices to be determined by such dealers at the time of resale. The names of the
dealers and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
The Securities may be sold directly by the Issuers or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Securities in respect to 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 arising thereto. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
The Securities may be sold directly by the Issuers to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any sale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Issuers will authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase Securities from the Issuers 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 only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Issuers to indemnification by the Issuers against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Issuers
in the ordinary course of business.
The Securities may or may not be listed on a national securities exchange.
No assurances can be given that there will be a market for the Securities.
23
25
LEGAL MATTERS
Certain legal matters in connection with the Securities offered hereby will
be passed upon for the Issuers by Baker & Botts, L.L.P. Robert L. Stillwell, a
partner of Baker & Botts, L.L.P., is a director of the Company.
EXPERTS
The consolidated financial statements and schedules of the Company included
in the Company's Annual Report on Form 10-K for the year ended December 31, 1995
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.
24
26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses (other than underwriting discounts
and commissions) of the issuance and distribution of the securities being
registered payable by the Company.
Securities and Exchange Commission registration fee......... $151,516
Printing and engraving expenses............................. 100,000
Accounting fees and expenses................................ 25,000
Counsel fees................................................ 75,000
Miscellaneous............................................... 98,484
--------
Total............................................. $450,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify any director or officer who was, is or is threatened
to be made a named defendant or respondent in a proceeding because he is or was
a director or officer, provided that the director or officer (i) conducted
himself in good faith, (ii) reasonably believed (a) in the case of conduct in
his official capacity, that his conduct was in the corporation's best interests,
(b) in all other cases, that his conduct was at least not opposed to the
corporation's best interests and (iii) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. Subject to certain
exceptions, a director or officer may not be indemnified if the person is found
liable to the corporation or if the person is found liable on the basis that he
improperly received a personal benefit. Under Texas law, reasonable expenses
incurred by a director or officer may be paid or reimbursed by the corporation
in advance of a final disposition of the proceeding after the corporation
receives a written affirmation by the director of his good faith belief that he
has met the standard of conduct necessary for indemnification and a written
undertaking by or on behalf of the director to repay the amount if it is
ultimately determined that the director or officer is not entitled to
indemnification by the corporation. Texas law requires a corporation to
indemnify an officer or director against reasonable expenses incurred in
connection with the proceeding in which he is named defendant or respondent
because he is or was a director or officer if he is wholly successful in defense
of the proceeding.
Texas law also permits a corporation to purchase and maintain insurance or
another arrangement on behalf of any person who is or was a director or officer
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person, whether or not the
corporation would have the power to indemnify him against that liability under
Article 2.02-1.
The Company's Bylaws provide for the indemnification of its officers and
directors, and the advancement to them of expenses in connection with
proceedings and claims, to the fullest extent permitted by the Texas Business
Corporation Act. The Company has also entered into indemnification agreements
with its executive officers and directors that contractually provide for
indemnification and expense advancement. Both the Bylaws and the agreements
include related provisions meant to facilitate the indemnitees' receipt of such
benefits. These provisions cover, among other things: (i) specification of the
method of determining entitlement to indemnification and the selection of
independent counsel that will in some cases make such determination, (ii)
specification of certain time periods by which certain payments or
determinations must be made and actions must be taken and (iii) the
establishment of certain presumptions in favor of an indemnitee. The benefits of
certain of these provisions are available to an indemnitee only if there has
been a change in control (as defined). In addition, the Company carries
customary directors' and officers' liability insurance policies for its
directors and officers. Furthermore, the Bylaws and agreements with directors
and officers provide for indemnification for amounts (i) in respect of the
deductibles for such insurance policies, (ii) that exceed the liability limits
of such insurance policies and (iii) that would have been covered by prior
insurance policies of the Company or its predecessors. Such indemnification may
be made even though directors and
II-1
27
officers would not otherwise be entitled to indemnification under other
provisions of the Bylaws or such agreements.
The above discussion of the Company's Bylaws and of Article 2.01-1 of the
Texas Business Corporation Act is not intended to be exhaustive and is
respectively qualified in its entirety by such statute and the Bylaws.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits a
corporation to indemnify any director or officer of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with any action, suit
or proceeding brought by reason of the fact that such person is or was a
director or officer of the corporation, if such person acted in good faith and
in a manner that 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, if he had no reason to believe his conduct was unlawful. In a
derivative action (i.e., one brought by or on behalf of the corporation),
indemnification may be made only for expenses actually and reasonably incurred
by any director or officer in connection with the defense or settlement of such
an action or suit, if such person acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought shall determine
that the defendant is fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability.
Delaware law also permits a corporation to purchase and maintain insurance
on behalf of any person who is or was a director or officer against any
liability asserted against him and incurred by him in such capacity or arising
out of his status as such, whether or not the corporation has the power to
indemnify him against that liability under Section 145 of the DGCL.
MOC's Bylaws provide that MOC may indemnify each person who is involved in
any litigation or other proceeding because such person is or was a director or
officer of MOC or its subsidiaries or is or was serving as an officer or
director of another entity at the request of MOC, against all expenses
reasonably incurred in connection therewith. Such indemnification shall be made
upon a determination by the Board of Directors, independent legal counsel or the
stockholders of the corporation that such indemnification is proper in the
circumstances because such person has met the applicable standard of conduct The
Bylaws also provide that MOC shall indemnify a director or officer against such
expenses to the extent that he has been successful on the merits or otherwise in
defense of any such litigation or other proceeding. The Bylaws also provide that
the right to indemnification includes the right to be paid expenses incurred in
defending any proceeding in advance of its final disposition; provided, however,
that such advance payment will only be made upon the delivery to MOC of an
undertaking, by or on behalf of the director or officer, to repay all amounts so
advanced if it is ultimately determined that such director or officer is not
entitled to indemnification.
MOC's Certificate of Incorporation provides that the personal liability of
a director of the corporation shall be limited to the fullest extent permitted
by the DGCL. Pursuant to Section 102(b)(7) of the DGCL, Article Sixth of MOC's
Certificate of Incorporation eliminates the personal liability of a director to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liabilities arising (i) from any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) from
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL or (iv) from any
transaction from which the director derived an improper personal benefit.
The above discussion of MOC's Bylaws and Certificate of Incorporation is
not intended to be exhaustive and is respectively qualified in its entirety by
such documents.
II-2
28
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
4.1 -- Form of Senior Indenture among Mesa Operating Co., MESA
Inc. and Bankers Trust Company, as trustee.
4.2 -- Form of Subordinated Indenture among Mesa Operating Co.,
MESA Inc. and Bankers Trust Company, as trustee.
4.3 -- Form of Senior Indenture among Mesa Operating Co., MESA
Inc. and one or more banking institutions to be qualified
as Trustee pursuant to Section 305(b)(2) of the Trust
Indenture Act of 1939 (incorporated by reference to
Exhibit 4.1 except for name of Trustee)).
4.4 -- Form of Subordinated Indenture among Mesa Operating Co.,
MESA Inc. and one or more banking institutions to be
qualified as Trustee pursuant to Section 305(b)(2) of the
Trust Indenture Act of 1939 (incorporated by reference to
Exhibit 4.2 except for name of Trustee)).
5 -- Opinion of Baker & Botts, L.L.P.
*12 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Independent Public Accountants.
23.3 -- Consent of Baker & Botts, L.L.P. (included in Exhibit 5
to this Registration Statement).
*24 -- Powers of Attorney of directors and officers of MESA Inc.
26.1 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of Bankers Trust Company
relating to the Senior Indenture.
26.2 -- Form T-I Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of Bankers Trust Company
relating to the Subordinated Indenture.
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in 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) of the Securities Act if, in
the aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(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;
II-3
29
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on the 4th day of February,
1997.
MESA INC.
By: /s/ STEPHEN K. GARDNER
----------------------------------
Stephen K. Gardner
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ I. JON BRUMLEY* Chairman of the Board of February 4, 1997
- ----------------------------------------------------- Directors, Chief Executive
I. Jon Brumley Officer and President
/s/ STEPHEN K. GARDNER Senior Vice President and February 4, 1997
- ----------------------------------------------------- Chief Financial Officer
Stephen K. Gardner (Principal Financial
Officer)
/s/ WAYNE A. STOERNER* Controller (Principal February 4, 1997
- ----------------------------------------------------- Accounting Officer)
Wayne A. Stoerner
/s/ JOHN S. HERRINGTON* Director February 4, 1997
- -----------------------------------------------------
John S. Herrington
/s/ KENNETH A. HERSH* Director February 4, 1997
- -----------------------------------------------------
Kenneth A. Hersh
/s/ BOONE PICKENS* Director February 4, 1997
- -----------------------------------------------------
Boone Pickens
/s/ RICHARD E. RAINWATER* Director February 4, 1997
- -----------------------------------------------------
Richard E. Rainwater
/s/ PHILIP B. SMITH* Director February 4, 1997
- -----------------------------------------------------
Philip B. Smith
/s/ ROBERT L. STILLWELL* Director February 4, 1997
- -----------------------------------------------------
Robert L. Stillwell
*By: /s/ STEPHEN K. GARDNER
-----------------------------------
Stephen K. Gardner
Attorney-in-Fact
II-5
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on the 4th day of February,
1997.
MESA OPERATING CO.
By: /s/ STEPHEN K. GARDNER
----------------------------------
Stephen K. Gardner
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ I. JON BRUMLEY* Chairman of the Board of February 4, 1997
- ----------------------------------------------------- Directors, Chief Executive
I. Jon Brumley Officer and President
/s/ DENNIS E. FAGERSTONE* Director, Senior Vice President February 4, 1997
- ----------------------------------------------------- and Chief Operating Officer
Dennis E. Fagerstone
/s/ STEPHEN K. GARDNER Director, Senior Vice President February 4, 1997
- ----------------------------------------------------- and Chief Financial Officer
Stephen K. Gardner (Principal Financial Officer)
/s/ WAYNE A. STOERNER* Controller (Principal Accounting February 4, 1997
- ----------------------------------------------------- Officer)
Wayne A. Stoerner
*By: /s/ STEPHEN K. GARDNER
-------------------------------
Stephen K. Gardner
Attorney-in-Fact
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 -- Form of Senior Indenture among Mesa Operating Co., MESA Inc. and Bankers Trust
Company, as trustee.
4.2 -- Form of Subordinated Indenture among Mesa Operating Co., MESA Inc. and Bankers Trust
Company, as trustee.
4.3 -- Form of Senior Indenture among Mesa Operating Co., MESA Inc. and one or more banking
institutions to be qualified as Trustee pursuant to Section 305(b)(2) of the Trust
Indenture Act of 1939 (incorporated by reference to Exhibit 4.1 except for name of
Trustee)).
4.4 -- Form of Subordinated Indenture among Mesa Operating Co., MESA Inc. and one or more
banking institutions to be qualified as Trustee pursuant to Section 305(b)(2) of the
Trust Indenture Act of 1939 (incorporated by reference to Exhibit 4.2 except for
name of Trustee)).
5 -- Opinion of Baker & Botts, L.L.P.
*12 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Independent Public Accountants.
23.3 -- Consent of Baker & Botts, L.L.P. (included in Exhibit 5 to this Registration
Statement).
*24 -- Powers of Attorney of directors and officers of MESA Inc. (included on signature
pages to this Registration Statement).
26.1 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of
1939 of Bankers Trust Company relating to the Senior Indenture.
26.2 -- Form T-I Statement of Eligibility and Qualification under the Trust Indenture Act of
1939 of Bankers Trust Company relating to the Subordinated Indenture.
- ---------------
* Previously filed.