AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 2002
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WEATHERFORD INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 3533 04-2515019
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) No.)
515 POST OAK BOULEVARD, SUITE 600
HOUSTON, TEXAS 77027-3415
(713) 693-4000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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BURT M. MARTIN
VICE PRESIDENT -- LAW AND CORPORATE SECRETARY
WEATHERFORD INTERNATIONAL, INC.
515 POST OAK BOULEVARD, SUITE 600
HOUSTON, TEXAS 77027-3415
(713) 693-4000
(Name, address, including zip code, and telephone number,
including area code of agent for service)
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COPY TO:
WILLIAM MARK YOUNG
ANDREWS & KURTH
MAYOR, DAY, CALDWELL & KEETON L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
(713) 220-4200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable following the effectiveness of this registration statement.
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If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE(1)
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6 5/8% Senior Notes Due 2011... $350,000,000 100% $350,000,000 $32,200
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(1) Determined in accordance with Rule 457(f) promulgated under the Securities
Act of 1933, as amended.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not a solicitation of an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DATED FEBRUARY 12, 2002
WEATHERFORD INTERNATIONAL, INC.
EXCHANGE OFFER FOR:
ALL OUR 6 5/8% SERIES A SENIOR NOTES DUE 2011 FOR
OUR 6 5/8% SERIES B SENIOR NOTES DUE 2011
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED.
Terms of the exchange offer:
- We are offering a total of $350 million of our 6 5/8% Series B Senior
Notes due 2011 for an equal amount of our outstanding 6 5/8% Series A
Senior Notes due 2011.
- We will exchange new notes for all outstanding old notes that are validly
tendered and not withdrawn prior to the expiration of the exchange offer.
You may withdraw tenders of old notes at any time prior to the expiration
of the exchange offer.
- The exchange of old notes for new notes will not be a taxable event for
U.S. federal income tax purposes but you should read the discussion under
the caption "Material United States Federal Tax Considerations" on page
29 for more information.
- We will not receive any cash proceeds from the exchange offer.
- The terms of the new notes are substantially identical to those of the
outstanding old notes, except that the transfer restrictions and
registration rights relating to the old notes do not apply to the new
notes.
- The exchange offer is the initial offering of the new notes.
- There is no established trading market for the new notes or the old
notes. We do not intend to apply for listing of the new notes on any
national securities exchange or for quotation through The Nasdaq National
Market.
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PLEASE READ "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF RISKS
YOU SHOULD CONSIDER.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is , 2002
TABLE OF CONTENTS
PAGE
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Where You Can Find More Information... i
Forward-Looking Statements............ ii
Summary............................... 1
Risk Factors.......................... 7
Use of Proceeds....................... 9
Capitalization........................ 9
Ratio of Earnings to Fixed Charges.... 10
Selected Financial and Operating
Data................................ 11
PAGE
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The Exchange Offer.................... 12
Description of the Notes.............. 20
Material United States Federal Tax
Considerations...................... 29
Certain ERISA Considerations.......... 32
Plan of Distribution.................. 33
Legal Opinions........................ 34
Experts............................... 34
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In this prospectus, references to "we," "us" and "our" refer to Weatherford
International, Inc., unless the context indicates that "we," "us" or "our"
refers to Weatherford International, Inc., together with its consolidated
subsidiaries.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE NOTES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON
THE DATE OF THIS DOCUMENT.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the SEC. You may read and copy any material on file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Our
filings are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room.
We are "incorporating by reference" herein important business and financial
information which we file with the SEC, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference or deemed incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will be deemed to update automatically and supersede this incorporated
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 subsequent to the date of this prospectus
and prior to the completion of this offering. We also incorporate by reference
any future filings made with the SEC under the Exchange Act subsequent to the
date of the initial registration statement and prior to effectiveness of the
registration statement.
- Our Annual Report on Form 10-K for the year ended December 31, 2000, as
amended by Amendment No. 1 on Form 10-K/A as filed April 27, 2001 and
Amendment No. 2 on Form 10-K/A as filed May 8, 2001.
- Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001,
June 30, 2001 and September 30, 2001.
- Our Current Reports on Form 8-K as filed January 30, 2001, February 27,
2001 (as amended on Form 8-K/A as filed April 11, 2001), April 25, 2001,
July 18, 2001, August 17, 2001, November 1, 2001, November 6, 2001,
November 16, 2001, December 4, 2001 and February 1, 2002.
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You can get a free copy of any of the documents incorporated by reference
by making an oral or written request directed to:
Weatherford International, Inc.
515 Post Oak Boulevard, Suite 600
Houston, Texas 77027-3415
Attention: Sr. Vice President -- Investor Relations
Telephone: (713) 693-4000
Email: investor.relations@weatherford.com
To obtain timely delivery of any of the documents incorporated by reference
in this prospectus, you must request the information no later than ,
2002.
FORWARD-LOOKING STATEMENTS
This prospectus, our filings with the SEC and our public releases contain
statements relating to our future results, including certain projections and
business trends. These statements may constitute "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995. Certain risks
and uncertainties may cause actual results to be materially different from
projected results contained in forward-looking statements in this prospectus and
in our other disclosures. These risks and uncertainties include, but are not
limited to, the following factors as well as the factors discussed in the
documents incorporated by reference into this prospectus.
- A downturn in market conditions could affect projected results. Any
material changes in oil and gas supply and demand balance, oil and gas
prices or other market trends would affect our results and would likely
affect the forward-looking information provided by us. The oil and gas
industry is extremely volatile and subject to change based on political
and economic factors outside our control. In recent periods there has
been a general decrease in prices for oil and natural gas, reflecting
diminished demand attributable to world political and economic issues.
- Economic downturns could adversely affect demand for our products and
services. The United States economy and most foreign economies have been
weakening in recent periods. An extended regional and/or worldwide
recession would result in lower demand and lower prices for oil and gas,
which would adversely affect our revenues and income. At this time, we
have assumed that material declines will be limited to North and Latin
America and that such declines will not last for an extended period of
time.
- A future reduction in the rig count could adversely affect the demand for
our products and services. A material decline in the North American and
international rig counts would adversely affect our results. Our
forward-looking statements regarding our drilling products and services
assume a modest improvement in the international rig count in 2002 and
that no extended material declines in the worldwide rig count, in
particular the domestic rig count, will occur.
- A material disruption in our manufacturing improvements could adversely
affect some divisions of our business. We have recently increased our
manufacturing capacity in our European completion operations through the
addition of equipment and the consolidation of facilities. Our forward-
looking statements assume that any further manufacturing expansion and
consolidation will be completed without any material disruptions. If
there are any disruptions or excess costs associated with manufacturing
changes, our results could be adversely affected.
- Our success is dependent upon the integration of acquisitions. During
2001, we consummated various acquisitions of product lines and
businesses, including the acquisitions of CiDRA OSS and Johnson Screens.
The success of these acquisitions will be dependent on our ability to
integrate these product lines and businesses with our existing businesses
and eliminate duplicative costs. We incur various duplicative costs
during the integration of the operations of acquired businesses into our
businesses. Our forward-looking statements assume the successful
integration of the operations of the acquired businesses and their
contribution to our income during 2002. However, there can be
ii
no assurance that the expected benefits of these acquisitions will materialize.
Integration of acquisitions is something that cannot occur in the short-term and
that requires constant effort at the local level to be successful. Accordingly,
there can be no assurance as to the ultimate success of these integration
efforts.
- Our long-term growth strategy is dependent upon technological
advances. Our ability to succeed with our long-term growth strategy is
dependent in part on the technological competitiveness of our products
and services. A central aspect of our growth strategy is to enhance the
technology of our products and services, to expand the markets for many
of our products through the leverage of our worldwide infrastructure and
to enter new markets and expand in existing markets with
technologically-advanced value-added products. These technological
advances include our underbalanced drilling technology, our expandable
technology, our rotary expansion systems, and our recently added
production optimization and fiber optic sensor technology. Our
forward-looking statements have assumed above-average growth from these
new products and services through 2002.
- Currency fluctuations could have a material adverse financial impact on
our business. A material decline in currency rates in our markets could
affect our future results as well as affect the carrying values of our
assets. World currencies have been subject to much volatility. Our
forward-looking statements assume no material impact from future changes
in currencies.
- Changes in global trade policies could adversely impact our
operations. Changes in global trade policies in our markets could impact
our operations in these markets. We have assumed that there will be no
material changes in global trading policies.
- Unexpected litigation and legal disputes could have a material adverse
financial impact. If we experience unexpected litigation or unexpected
results in our existing litigation that have a material effect on our
financial results, the accuracy of the forward-looking statements would
be affected. Our forward-looking statements assume that there will be no
such unexpected litigation or results.
Finally, our future results will depend upon various other risks and
uncertainties, including, but not limited to, those detailed in our other
filings with the SEC. For additional information regarding risks and
uncertainties, please read our other current filings with the SEC under the
Exchange Act and the Securities Act, particularly under "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Exposures" in
our Quarterly Report on Form 10-Q for our fiscal quarter ended September 30,
2001.
iii
SUMMARY
The following summary highlights selected information from the prospectus
and may not contain all of the information that is important to you. This
prospectus includes specific terms of the new notes, as well as information
regarding our business and detailed financial data. We encourage you to read
this entire prospectus carefully, including the discussion of risk and
uncertainties affecting our business included under the caption "Risk Factors,"
and the documents that have been incorporated into this prospectus, before
making an investment decision.
WEATHERFORD
Weatherford International, Inc. is a diversified international energy
service and manufacturing company that provides a variety of services and
equipment to the exploration, production and transmission sectors of the oil and
gas industry. Our operations are conducted in over 100 countries, and we have
more than 400 manufacturing and service and sales locations in nearly all of the
oil and natural gas producing regions in the world. We are among the leaders in
each of our primary markets, and our distribution and service network is one of
the most extensive in the industry. For the nine months ended September 30,
2001, we had $1.7 billion of revenues and $459.1 million of EBITDA.
Our business is divided into three principal operating divisions:
- Drilling and Intervention Services -- This division provides a wide range
of oilfield products and services, including fishing services,
third-party and proprietary drilling products, well installation
services, cementing products and underbalanced drilling and specialty
pipeline services. We are a leader in each of these markets.
- Completion Systems -- This division provides a wide range of completion
products and services, including packers, sand control, flow control,
expandable products, liner hangers, inflatable packers and intelligent
well technology. The Completion Systems division maintains a growing
share of the world's completion market and offers leading proprietary and
patented technologies aimed at maximizing production.
- Artificial Lift Systems -- This division designs, manufactures, sells and
services a complete line of artificial lift equipment, including
progressing cavity pumps, reciprocating rod lift, gas lift, electrical
submersible pumps and hydraulic lift. It also provides products and
services which optimize and automate well production management and allow
for remote well monitoring and control. It is the only organization in
the world that is able to provide all forms of artificial lift used for
the production of oil and gas.
In addition to the above operations, we also operated a Compression
Services division. In February 2001, we sold this division to a subsidiary of
Universal Compression Holdings, Inc. in exchange for 13.75 million shares of
Universal. Following the merger, Universal became the world's second largest
provider of natural gas compression services. Our ownership of Universal is
approximately 45%.
Our principal executive offices are located at 515 Post Oak Boulevard,
Suite 600, Houston, Texas 77027-3415. Our telephone number at that location is
(713) 693-4000.
RECENT EVENTS
On November 16, 2001, we completed an acquisition of CiDRA Corporation's
Optical Sensing Systems business unit, which provides permanent downhole fiber
optic sensor systems, for $62.5 million in cash and approximately 1.9 million
shares of our common stock. CiDRA's technologies consist of pressure and
temperature sensors, flow and phase fraction systems, as well as an all-fiber
in-well seismic system.
On November 30, 2001, we completed an acquisition of the Johnson Screens
division of Vivendi Environnement SA for $110.0 million. Johnson Screens is a
global provider of screens for fluid-solid separation processes for oil and gas
production and other applications. Johnson Screens operates
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21 manufacturing facilities in 14 countries, providing worldwide coverage of the
oil and gas, petrochemical and other process industries. Johnson Screens will be
integrated within our Completion Systems division.
THE EXCHANGE OFFER
Old Notes..................... 6 5/8% Series A Senior Notes due November 15,
2011, which were issued on November 16, 2001.
New Notes..................... 6 5/8% Series B Senior Notes due November 15,
2011. The terms of the new notes are
substantially identical to those terms of the
outstanding old notes, except that the transfer
restrictions and registration rights relating
to the old notes do not apply to the new notes.
Exchange Offer................ We are offering to exchange up to $350 million
principal amount of our 6 5/8% Series B Notes
due November 15, 2011 which have been
registered under the Securities Act for an
equal amount of our outstanding 6 5/8% Series A
Notes due November 15, 2011, to satisfy our
obligations under the registration rights
agreement that we entered into when the old
notes were sold in transactions exempt from
registration under the Securities Act.
Expiration Date; Tenders...... The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2002, unless
extended. By tendering your old notes, you
represent to us that:
- you are not our "affiliate" as defined in
Rule 405 under the Securities Act;
- any new notes you receive in the exchange
offer are being acquired by you in the
ordinary course of your business;
- at the time of commencement of the exchange
offer, neither you nor, to your knowledge,
anyone receiving new notes from you, has any
arrangement or understanding with any person
to participate in the distribution of the new
notes, as defined in the Securities Act, in
violation of the Securities Act;
- if you are not a participating broker-dealer,
you are not engaged in, and do not intend to
engage in, the distribution of the new notes,
as defined in the Securities Act; and
- if you are a participating broker-dealer, you
will receive the new notes for your own
account in exchange for old notes that were
acquired by you as a result of your
market-making or other trading activities and
that you will deliver a prospectus in
connection with any resale of the new notes
you receive. For further information
regarding resales of the new notes by
participating broker-dealers and the
prospectus delivery requirement, see the
discussion below under the caption "Plan of
Distribution."
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Withdrawal; Non-Acceptance.... You may withdraw any old notes tendered in the
exchange offer at any time prior to 5:00 p.m.,
New York City time, on , 2002. If we
decide for any reason not to accept any old
notes tendered for exchange, the old notes will
be returned to the registered holder at our
expense promptly after the expiration or
termination of the exchange offer. In the case
of old notes tendered by book-entry transfer
into the exchange agent's account at The
Depository Trust Company, any withdrawn or
unaccepted old notes will be credited to the
tendering holder's account at The Depository
Trust Company. For further information
regarding the withdrawal of tendered old notes,
please read "The Exchange Offer -- Withdrawal
Rights."
Conditions to the Exchange
Offer......................... The exchange offer is subject to customary
conditions, which we may waive. Please read the
discussion below under the caption "The
Exchange Offer -- Conditions to the Exchange
Offer" for more information regarding the
conditions to the exchange offer.
Procedures for Tendering Old
Notes......................... Unless you comply with the procedures described
below under the caption "The Exchange
Offer -- Procedures for Tendering -- Guaranteed
Delivery," you must do one of the following on
or prior to the expiration of the exchange
offer to participate in the exchange offer:
- tender your old notes by sending the
certificates for your old notes, in proper
form for transfer, a properly completed and
duly executed letter of transmittal, with any
required signature guarantees, and all other
documents required by the letter of
transmittal, to The Bank of New York, as
exchange agent, at the address listed below
under the caption "The Exchange Offer --
Exchange Agent"; or
- tender your old notes by using the book-entry
transfer procedures described below and
transmitting a properly completed and duly
executed letter of transmittal, with any
required signature guarantees, or an agent's
message instead of the letter of transmittal,
to the exchange agent. In order for a
book-entry transfer to constitute a valid
tender of your old notes in the exchange
offer, The Bank of New York, as exchange
agent, must receive a confirmation of
book-entry transfer of your old notes into
the exchange agent's account at The
Depository Trust Company prior to the
expiration of the exchange offer. For more
information regarding the use of book-entry
transfer procedures, including a description
of the required agent's message, please read
the discussion below under the caption "The
Exchange Offer-- Procedures for
Tendering -- Book-Entry Transfer."
Guaranteed Delivery
Procedures.................... If you are a registered holder of the old notes
and wish to tender your old notes in the
exchange offer, but
- the old notes are not immediately available,
- time will not permit your old notes or other
required documents to reach the exchange
agent before the expiration of the exchange
offer, or
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- the procedure for book-entry transfer cannot
be completed prior to the expiration of the
exchange offer, then you may tender old notes
by following the procedures described below
under the caption "The Exchange
Offer-- Procedures for Tendering --
Guaranteed Delivery."
Special Procedures for
Beneficial Owners............. If you are a beneficial owner whose old notes
are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender your old notes in the
exchange offer, you should promptly contact the
person in whose name the old notes are
registered and instruct that person to tender
on your behalf.
If you wish to tender in the exchange offer on
your own behalf, prior to completing and
executing the letter of transmittal and
delivering the certificates for your old notes,
you must either make appropriate arrangements
to register ownership of the old notes in your
name or obtain a properly completed bond power
from the person in whose name the old notes are
registered.
United States Federal Tax
Consequences.................. The exchange of old notes for new notes in the
exchange offer will not be a taxable event for
United States federal income tax purposes.
Please read the discussion below under the
caption "Material United States Federal Tax
Considerations" for more information regarding
the tax consequences to you of the exchange
offer.
Use of Proceeds............... We will not receive any cash proceeds from the
exchange offer.
Exchange Agent................ The Bank of New York is the exchange agent for
the exchange offer. You can find the address
and telephone number of the exchange agent
below under the caption "The Exchange Offer --
Exchange Agent."
Resales....................... Based on interpretations by the staff of the
Securities and Exchange Commission, as set
forth in no-action letters issued to third
parties, we believe that the new notes you
receive in the exchange offer may be offered
for resale, resold or otherwise transferred
without compliance with the registration and
prospectus delivery provisions of the
Securities Act so long as:
- you are not our "affiliate" as defined in
Rule 405 under the Securities Act;
- you are acquiring the new notes in the
ordinary course of your business; and
- you do not have an arrangement or
understanding with any person to participate
in the distribution, as defined in the
Securities Act, of the new notes you will
receive in the exchange offer.
You must represent that you meet the above
three requirements if you wish to exchange old
notes for new notes in the exchange offer.
4
If you are our "affiliate" or are engaged in or
intend to engage in or have any arrangement or
understanding with any person to participate in
the distribution of the new notes:
- you cannot rely on the applicable
interpretations of the staff of the SEC;
- will not be permitted or entitled to tender
the old notes in the exchange offer; and
- you must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
transaction.
A broker-dealer that receives new notes for its
own account in the exchange offer for old notes
that were acquired as a result of market-making
or other trading activities must acknowledge
that it will comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any offer to
resell, resale or other transfer of the new
notes issued in the exchange offer, including
the delivery of a prospectus that contains
information with respect to any selling holder
required by the Securities Act in connection
with any resale of the new notes. Furthermore,
any broker-dealer that acquired any of its old
notes directly from us:
- cannot rely on the applicable
interpretations of the staff of the SEC;
and
- will not be permitted or entitled to
tender the old notes in the exchange
offer;
- must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any
resale transaction.
Please read "The Exchange Offer -- Resales of
New Notes."
CONSEQUENCES OF NOT EXCHANGING YOUR OLD NOTES
If you do not exchange your old notes in the exchange offer, your old notes
will continue to be subject to the restrictions on transfer described in the
legend on the certificate for your old notes. In general, you may offer or sell
your old notes only:
- if they are registered under the Securities Act and applicable state
securities laws;
- if they are offered or sold under an exemption from registration under
the Securities Act and applicable state securities laws; or
- if they are offered or sold in a transaction not subject to the
Securities Act and applicable state securities laws.
We do not currently intend to register the old notes under the Securities Act.
Under some circumstances, however, holders of the old notes, including holders
who are not permitted to participate in the exchange offer or who may not freely
resell new notes received in the exchange offer, may require us to file, and
cause to become effective, a shelf registration statement covering resales of
old notes by these holders. For more information regarding the consequences of
not tendering your old notes and our obligation to file a shelf registration
statement, please read "The Exchange Offer -- Acceptance of Old Notes for
Exchange; Issuance of New Notes" and "Description of the Notes -- Old Notes."
5
SUMMARY DESCRIPTION OF THE NEW NOTES
The terms of the new notes and those of the outstanding old notes are
substantially identical, except that the transfer restrictions and registration
rights relating to the old notes do not apply to the new notes. In addition, if
- this registration statement is not declared effective on or prior to May
15, 2002 or if the exchange offer is not completed on or prior to June
14, 2002,
- we are obligated to file a shelf registration statement and we fail to do
so prior to the 60th day after the obligation arises or the shelf
registration statement is not declared effective prior to the 90th day
after the date of filing, or
- if the shelf registration statement ceases to be effective or usable,
we agree to pay liquidated damages in an amount equal to 0.25% per year of the
principal amount of old notes for the first 90-day period immediately following
a default, increasing to 0.50% per year thereafter.
Issuer........................ Weatherford International, Inc.
Securities Offered............ $350 million aggregate principal amount of
6 5/8% Series B Senior Notes due 2011. The
notes will mature on November 15, 2011.
Interest...................... Interest on the new notes will accrue at the
rate of 6 5/8% per year and will be payable
semi-annually on May 15 and November 15 of each
year, commencing on May 15, 2002.
Ranking....................... The new notes will be our unsecured and
unsubordinated obligations ranking equally with
our other outstanding unsecured and
unsubordinated indebtedness.
Sinking Fund.................. None.
Optional Redemption........... We may redeem some or all of the notes at any
time at the "make-whole" price, plus accrued
interest and liquidated damages, if any, to the
redemption date. Please read the discussion
below under the caption "Description of the
Notes -- Optional Redemption" for more
information.
Covenants..................... The terms of the new notes will restrict our
ability to:
- incur liens on our property;
- enter into any sale and leaseback
transactions; and
- consolidate or merge or sell assets.
These limitations are subject to a number of
important qualifications and exceptions which
are described in "Description of the
Notes -- Certain Covenants" and "-- Mergers and
Sale of Assets."
Events of Default............. If there is an event of default on the notes,
the principal amount of notes plus accrued
interest and liquidated damages, if any, may be
declared immediately due and payable in
specified circumstances. Please read
"Description of the Notes -- Events of Default;
Notice and Waiver."
RISK FACTORS
You should carefully consider all of the information contained in this
prospectus before deciding to tender your old notes in the exchange offer. In
particular, you should carefully review the specific factors described below
under the caption "Risk Factors," which contain important information about us
and the risks that may affect our business.
6
RISK FACTORS
You should consider carefully the following factors, as well as the other
information set forth or incorporated by reference in the prospectus (including
the risks and other disclosure that are presented in Weatherford International,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2000, as
amended by Amendment No. 1 on Form 10-K/A as filed April 27, 2001 and Amendment
No. 2 on Form 10-K/A as filed May 8, 2001 and Quarterly Report on Form 10-Q for
the quarter ended September 30, 2001), before tendering your old notes in the
exchange offer. When we use the term "notes" in this prospectus, the term
includes the old notes and the new notes.
HOLDERS WHO FAIL TO EXCHANGE THEIR OLD NOTES WILL CONTINUE TO BE SUBJECT TO
RESTRICTIONS ON TRANSFER.
If you do not exchange your old notes for new notes in the exchange offer,
you will continue to be subject to the restrictions on transfer of your old
notes described in the legend on the certificates for your old notes. The
restrictions on transfer of your old notes arise because we issued the old notes
under exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, you may only offer or sell the old notes if they are registered under
the Securities Act and applicable state securities laws, or offered and sold
under an exemption from these requirements. We do not plan to register any sale
of the old notes under the Securities Act. For further information regarding the
consequences of tendering your old notes in the exchange offer, please read the
discussions below under the captions "The Exchange Offer -- Acceptance of Old
Notes for Exchange; Issuance of New Notes" and "Material United States Federal
Tax Considerations."
We believe that new notes issued in exchange for old notes pursuant to the
exchange offer may be offered for resale, resold or otherwise transferred by you
without registering the new notes under the Securities Act or delivering a
prospectus so long as you (1) are not one of our "affiliates," which is defined
in Rule 405 of the Securities Act and (2) acquire the new notes in the ordinary
course of your business and, unless you are a broker-dealer, you do not have any
arrangement or understanding with any person to participate in the distribution
of the new notes. Our belief is based on interpretations by the SEC's staff in
no-action letters issued to third parties. Please note that the SEC has not
considered our exchange offer in the context of a no-action letter, and the
SEC's staff may not make a similar determination with respect to our exchange
offer.
Unless you are a broker-dealer, you must acknowledge that you are not
engaged in, and do not intend to engage in, a distribution of the new notes and
that you have no arrangement or understanding to participate in a distribution
of the new notes. If you are a broker-dealer, or you are engaged in, intend to
engage in or have any arrangement or understanding with respect to, the
distribution of new notes acquired in the exchange offer, you (1) cannot rely on
the applicable interpretations of the staff of the SEC, (2) will not be
permitted or entitled to tender the old notes in the exchange offer and (3) must
comply with the registration and prospectus delivery requirement of the
Securities Act in connection with any resale transaction.
If you are a broker-dealer and receive new notes for your own account
pursuant to the exchange offer, you must acknowledge that you will deliver a
prospectus in connection with any resale of the new notes. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, you
will not be deemed to admit that you are an "underwriter" within the meaning of
the Securities Act. If you are a broker-dealer, you may use this prospectus, as
it may be amended or supplemented from time to time, in connection with the
resale of new notes received in exchange for old notes acquired by you as a
result of market-making or other trading activities. For a period of 90 days
after the expiration or termination of the exchange offer, we will make this
prospectus available to any broker-dealer for use in connection with any resale.
Please read "Plan of Distribution." In addition, you may offer or sell the new
notes in certain jurisdictions only if they have been registered or qualified
for sale there, or any exemption from registration or qualification is available
and is complied with.
7
YOU MAY FIND IT DIFFICULT TO SELL YOUR NOTES.
There is no established trading market for the new notes or the old notes.
Although Credit Suisse First Boston Corporation, Lehman Brothers Inc., Deutsche
Banc Alex. Brown Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Banc One Capital Markets, Inc., the initial purchasers in the offering of the
old notes, have informed us that they currently intend to make a market in the
new notes, they have no obligation to do so and may discontinue making a market
at any time without notice. We do not intend to apply for listing of the new
notes on any national securities exchange or for quotation through The Nasdaq
National Market. The liquidity of any market for the new notes will depend upon
the number of holders of the new notes, our performance, the market for similar
securities, the interest of securities dealers in making a market in the new
notes and other factors relating to us. A liquid trading market may not develop
for the new notes. In addition, to the extent old notes are tendered and
accepted in the exchange offer, the trading market, if any, for the old notes
would be adversely affected.
YOU MUST COMPLY WITH THE EXCHANGE OFFER PROCEDURES IN ORDER TO RECEIVE NEW,
FREELY TRADABLE NOTES.
Subject to the conditions set forth under "The Exchange Offer -- Conditions
to the Exchange Offer," delivery of new notes in exchange for old notes tendered
and accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of the following:
- certificates for old notes or a book-entry confirmation of a book-entry
transfer of old notes into the exchange agent's account at The Depository
Trust Company, New York, New York as depository, including an agent's
message if the tendering holder does not deliver a letter of transmittal,
- a completed signed letter of transmittal (or facsimile thereof), with any
required signature guarantees, or, in the case of a book-entry transfer,
an agent's message in lieu of the letter of transmittal, and
- any other documents required by the letter of transmittal.
Therefore, holders of old notes who would like to tender old notes in
exchange for new notes should be sure to allow enough time for the old notes to
be delivered on time. We are not required to notify you of defects or
irregularities in tenders of old notes for exchange. Old notes that are not
tendered or that are tendered but we do not accept for exchange will, following
consummation of the exchange offer, continue to be subject to the existing
transfer restrictions under the Securities Act and, upon consummation of the
exchange offer, certain registration and other rights under the registration
rights agreement will terminate. Please read "The Exchange Offer -- Procedures
for Tendering" and "Description of the Notes -- Old Notes."
SOME HOLDERS WHO EXCHANGE THEIR NOTES MAY BE DEEMED TO BE UNDERWRITERS.
If you exchange your old notes in the exchange offer for the purpose of
participating in a distribution of the new notes, you may be deemed to have
received restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
8
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the new notes as contemplated in this prospectus, we will receive,
in exchange, outstanding old notes in like principal amount. We will cancel all
old notes surrendered in exchange for new notes in the exchange offer.
The net proceeds to us from the sale of the old notes were used to repay
existing indebtedness and for general corporate purposes.
CAPITALIZATION
The following table sets forth our capitalization as of September 30, 2001,
and as adjusted to reflect the issuance and sale in November 2001 by us of the
old notes.
AS OF SEPTEMBER 30, 2001
------------------------
ACTUAL AS ADJUSTED
---------- -----------
($ IN THOUSANDS
EXCEPT PAR VALUE)
Cash and Cash Equivalents................................... $ 44,732 $ 89,453
========== ==========
Short-Term Borrowings and Current Portion of Long-Term
Debt...................................................... $ 308,955 $ 6,676
========== ==========
Long-Term Debt:
Long-Term Debt.............................................. $ 232,441 $ 232,441
6 5/8% Senior Notes due 2011................................ -- 350,000
Zero Coupon Convertible Senior Debentures................... 520,685 520,685
---------- ----------
Total Long-Term Debt................................... 753,126 1,103,126
5% Convertible Subordinated Preferred Equivalent
Debentures................................................ 402,500 402,500
Stockholders' Equity:
Common Stock, $1 Par Value, Authorized 250,000 Shares,
Issued 126,577 Shares..................................... 126,577 126,577
Capital in Excess of Par Value.............................. 1,810,847 1,810,847
Treasury Stock, Net......................................... (300,686) (300,686)
Retained Earnings........................................... 213,526 213,526
Accumulated Other Comprehensive Loss........................ (151,979) (151,979)
---------- ----------
Total Stockholders' Equity............................. 1,698,285 1,698,285
---------- ----------
Total Capitalization................................. $2,853,911 $3,203,911
========== ==========
9
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of earnings to fixed charges on a
consolidated basis for the periods shown. You should read these ratios of
earnings to fixed charges in connection with our consolidated financial
statements, including the notes to those statements, incorporated by reference
in this prospectus.
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------- -------------
1996 1997 1998 1999 2000 2000 2001
----- ----- ----- ----- ----- ----- -----
Earnings/Fixed Charges.......... 3.46x 6.00x -- 1.52x 1.99x 2.30x 5.06x
For the year ended December 31, 1998, earnings before fixed charges were
inadequate to cover fixed charges by $6.7 million.
For purposes of computing the ratio of earnings to fixed charges, earnings
are divided by fixed charges. "Earnings" represent the aggregate of (a) our
earnings (loss) before income taxes, minority interest, extraordinary charges
and discontinued operations and (b) fixed charges, net of interest capitalized.
"Fixed charges" represent interest (whether expensed or capitalized), the
amortization of capitalized debt costs and original issue discount and that
portion of rental expense on operating leases deemed to be the equivalent of
interest.
10
SELECTED FINANCIAL AND OPERATING DATA
The following table sets forth certain selected historical consolidated
financial data. The data for the years 1996 through 2000 have been derived from
our audited financial statements included in our Annual Reports on Form 10-K.
The data for the nine months ended September 30, 2000 and September 30, 2001
have been derived from our unaudited financial statements included in our
Quarterly Reports on Form 10-Q. The selected financial data should be read in
conjunction with such financial statements, the notes thereto and the related
management's narrative analysis incorporated herein by reference.
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------------------- ------------------------
1996 1997 1998 1999 2000 2000 2001
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Revenues................. $1,129,958 $1,357,374 $1,363,849 $1,240,200 $1,814,261 $1,279,400 $1,707,779
Operating Income......... 127,408 216,082 36,171(a) 66,818 120,328(b) 107,567 306,268
Income (Loss) From
Continuing
Operations............. 71,225 129,745 (883)(a) 16,206 (38,892)(b)(c) 44,720 160,127
Basic Earnings (Loss) Per
Share From Continuing
Operations............. 0.79 1.35 (0.01)(a) 0.16 (0.36)(b)(c) 0.41 1.42
Diluted Earnings (Loss)
Per Share From
Continuing
Operations............. 0.78 1.33 (0.01)(a) 0.16 (0.36)(b)(c) 0.40 1.32
Total Assets............. 2,121,415 2,508,034 2,638,612 3,513,789 3,461,579 3,405,228 3,877,565
Long-term Debt........... 415,095 224,935 220,398 226,603 730,176(d) 731,730(d) 753,126(d)
5% Convertible
Subordinated Preferred
Equivalent
Debentures............. -- 402,500 402,500 402,500 402,500 402,500 402,500
Stockholders' Equity..... 1,295,048 1,462,409 1,500,090 1,843,684 1,338,458(e) 1,415,334 1,698,285
EBITDA(f)................ 238,192 335,403 335,779 233,476 375,755 253,906 459,113
---------------
(a) Includes $160.0 million, $104.0 million net of taxes, of merger and other
charges relating to the merger between EVI and Weatherford Enterra and a
reorganization and rationalization of our business in light of industry
conditions.
(b) Includes $56.3 million, $43.0 million net of taxes, of impairment charges
for assets to be disposed of related to the merger of essentially all of
our Compression Services division into Universal.
(c) Includes $76.5 million of deferred tax provision due to the anticipated
exchange of a consolidated subsidiary for an equity method investment in
connection with the Universal merger.
(d) Includes $910.0 million face amount of our Zero Coupon Convertible Senior
Debentures, at the accreted discount amount of $509.2 million, $505.4
million and $520.7 million as of December 31, 2000, September 30, 2000 and
September 30, 2001, respectively.
(e) At the close of business on April 14, 2000, we distributed the net assets
and related accumulated other comprehensive loss of our Grant Prideco
division to our shareholders through an adjustment to Retained Earnings.
(f) EBITDA is calculated as operating income adding back depreciation and
amortization, excluding the impact of impairment charges for assets to be
disposed of and merger costs and other charges. We have included an EBITDA
calculation here because when we look at the performance of our businesses,
we give consideration to their EBITDA. Calculations of EBITDA should not be
viewed as substitutes to calculations under accounting principles generally
accepted in the United States, in particular cash flows from operations,
operating income and net income. In addition, EBITDA calculations by one
company may not be comparable to another company's calculations.
11
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the old notes, we entered into a
registration rights agreement with the initial purchasers of the old notes,
pursuant to which we agreed to file and to use our reasonable best efforts to
cause to be declared effective by the SEC a registration statement with respect
to the exchange of the old notes for the new notes. We are making the exchange
offer to fulfill our contractual obligations under that agreement. A copy of the
registration rights agreement has been filed as an exhibit to the registration
statement of which this prospectus is a part.
Pursuant to the exchange offer, we will issue the new notes in exchange for
old notes. The terms of the new notes are identical in all material respects to
those of the old notes, except that the new notes (1) have been registered under
the Securities Act and therefore will not be subject to certain restrictions on
transfer applicable to the old notes and (2) will not have registration rights
or provide for any liquidated damages related to the obligation to register.
Please read "Description of the Notes" for more information on the terms of the
respective notes and the differences between them.
We are not making the exchange offer to, and will not accept tenders for
exchange from, holders of old notes in any jurisdiction in which an exchange
offer or the acceptance thereof would not be in compliance with the securities
or blue sky laws of such jurisdiction. Unless the context requires otherwise,
the term "holder" with respect to the exchange offer means any person in whose
name the old notes are registered on our books or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose old notes are held of record by The Depository Trust Company,
referred to as DTC, who desires to deliver such old notes by book-entry transfer
at DTC.
We make no recommendation to the holders of old notes as to whether to
tender or refrain from tendering all or any portion of their old notes pursuant
to the exchange offer. In addition, no one has been authorized to make any such
recommendation. Holders of old notes must make their own decision whether to
tender pursuant to the exchange offer and, if so, the aggregate amount of old
notes to tender after reading this prospectus and the letter of transmittal and
consulting with the advisers, if any, based on their own financial position and
requirements.
TERMS OF EXCHANGE
Upon the terms and conditions described in this prospectus and in the
accompanying letter of transmittal, which together constitute the exchange
offer, we will accept for exchange old notes that are properly tendered at or
before the expiration time and not withdrawn as permitted below. As of the date
of this prospectus, $350,000,000 principal amount of 6 5/8% Senior Notes due
2011, are outstanding. This prospectus, together with the letter of transmittal,
is first being sent on or about the date on the cover page of the prospectus to
all holders of old notes known to us. Old notes tendered in the exchange offer
must be in denominations of principal amount of $1,000 and any integral multiple
of $1,000.
Our acceptance of the tender of old notes by a tendering holder will form a
binding agreement between the tendering holder and us upon the terms and subject
to the conditions provided in this prospectus and in the accompanying letter of
transmittal.
EXPIRATION, EXTENSION AND AMENDMENT
The expiration time of the exchange offer is 5:00 P.M., New York City time,
on , 2002. However, we may, in our sole discretion, extend the period
of time for which the exchange offer is open and set a later expiration date for
the offer. The term "expiration time" as used herein means the latest time and
date to which we extend the exchange offer. If we decide to extend the exchange
offer period, we will then delay acceptance of any old notes by giving oral or
written notice of an extension to the holders of old notes as described below.
During any extension period, all old notes previously tendered will remain
12
subject to the exchange offer and may be accepted for exchange by us. Any old
notes not accepted for exchange will be returned to the tendering holder after
the expiration or termination of the exchange offer.
Our obligation to accept old notes for exchange in the exchange offer is
subject to the conditions described below under "-- Conditions to the Exchange
Offer." We may decide to waive any of the conditions in our discretion.
Furthermore, we reserve the right to amend or terminate the exchange offer, and
not to accept for exchange any old notes not previously accepted for exchange,
upon the occurrence of any of the conditions of the exchange offer specified
below under the same heading. We will give oral or written notice of any
extension, amendment, non-acceptance or termination to the holders of the old
notes as promptly as practicable. If we materially change the terms of the
exchange offer, we will resolicit tenders of the old notes, file a
post-effective amendment to the prospectus and provide notice to you. If the
change is made less than five business days before the expiration of the
exchange offer, we will extend the offer so that the holders have at least five
business days to tender or withdraw. We will notify you of any extension by
means of a press release or other public announcement no later than 9:00 A.M.,
New York City time, on the first business day after the previously scheduled
expiration time.
PROCEDURES FOR TENDERING
VALID TENDER
Except as described below, a tendering holder must, prior to the expiration
time, transmit to The Bank of New York, the exchange agent, at the address
listed under the heading "-- Exchange Agent":
- a properly completed and duly executed letter of transmittal, including
all other documents required by the letter of transmittal; or
- if old notes are tendered in accordance with the book-entry procedures
listed below, an agent's message.
In addition, you must:
- deliver certificates, if any, for the old notes to the exchange agent at
or before the expiration time; or
- deliver a timely confirmation of the book-entry transfer of the old notes
into the exchange agent's account at DTC, the book-entry transfer
facility, along with the letter of transmittal or an agent's message; or
- comply with the guaranteed delivery procedures described below.
The term "agent's message" means a message, transmitted by DTC to, and
received by, the exchange agent and forming a part of a book-entry confirmation,
that states that DTC has received an express acknowledgment that the tendering
holder agrees to be bound by the letter of transmittal and that we may enforce
the letter of transmittal against this holder.
If the letter of transmittal is signed by a person other than the
registered holder of old notes, the letter of transmittal must be accompanied by
a written instrument of transfer or exchange in satisfactory form duly executed
by the registered holder with the signature guaranteed by an eligible
institution. The old notes must be endorsed or accompanied by appropriate powers
of attorney. In either case, the old notes must be signed exactly as the name of
any registered holder appears on the old notes.
If the letter of transmittal or any old notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, these persons should so indicate when signing. Unless waived by us,
proper evidence satisfactory to us of their authority to so act must be
submitted.
By tendering, each holder will represent to us that, among other things,
the person is not our affiliate, the new notes are being acquired in the
ordinary course of business of the person receiving the new notes, whether or
not that person is the holder, and neither the holder nor the other person has
any arrangement
13
or understanding with any person to participate in the distribution of the new
notes. If you are a participating broker-dealer, you are representing to us that
you will receive the new notes for your own account in exchange for old notes
that were acquired by you as a result of your market-making or other trading
activities and that you will deliver a prospectus in connection with any resale
of the new notes you receive.
The method of delivery of old notes, letters of transmittal and all other
required documents is at your election and risk. If the delivery is by mail, we
recommend that you use registered mail, properly insured, with return receipt
requested. In all cases, you should allow sufficient time to assure timely
delivery. You should not send letters of transmittal or old notes to us.
If you are a beneficial owner whose old notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee, and wish to
tender, you should promptly instruct the registered holder to tender on your
behalf. Any registered holder that is a participant in DTC's book-entry transfer
facility system may make book-entry delivery of the old notes by causing DTC to
transfer the old notes into the exchange agent's account.
SIGNATURE GUARANTEES
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed, unless the old notes surrendered for exchange are tendered:
- by a registered holder of the old notes who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal, or
- for the account of an "eligible institution."
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantees must be by an "eligible institution."
An "eligible institution" is an "eligible guarantor institution" meeting the
requirements of the registrar for the notes, which requirements include
membership or participation in the Security Transfer Agent Medallion Program, or
STAMP, or such other "signature guarantee program" as may be determined by the
registrar for the notes in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account for the old
notes at DTC for purposes of the exchange offer within two business days after
the date of this prospectus. Any financial institution that is a participant in
DTC's systems must make book-entry delivery of old notes by causing DTC to
transfer those old notes into the exchange agent's account at DTC in accordance
with DTC's procedure for transfer. The participant should transmit its
acceptance to DTC at or prior to the expiration time or comply with the
guaranteed delivery procedures described below. DTC will verify this acceptance,
execute a book-entry transfer of the tendered old notes into the exchange
agent's account at DTC and then send to the exchange agent confirmation of this
book-entry transfer. The confirmation of this book-entry transfer will include
an agent's message confirming that DTC has received an express acknowledgment
from this participant that this participant has received and agrees to be bound
by the letter of transmittal and that we may enforce the letter of transmittal
against this participant.
Delivery of new notes issued in the exchange offer may be effected through
book-entry transfer at DTC. However, the letter of transmittal or facsimile of
it or an agent's message, with any required signature guarantees and any other
required documents, must:
- be transmitted to and received by the exchange agent at the address
listed under "-- Exchange Agent" at or prior to the expiration time; or
- comply with the guaranteed delivery procedures described below.
14
Delivery of documents to DTC in accordance with DTC's procedures does not
constitute delivery to the exchange agent.
GUARANTEED DELIVERY
If a registered holder of old notes desires to tender the old notes, and
the old notes are not immediately available, or time will not permit the
holder's old notes or other required documents to reach the exchange agent
before the expiration time, or the procedures for book-entry transfer described
above cannot be completed on a timely basis, a tender may nonetheless be made
if:
- the tender is made through an eligible institution;
- prior to the expiration time, the exchange agent received from an
eligible institution a properly completed and duly executed notice of
guaranteed delivery, substantially in the form provided by us, by
facsimile transmission, mail or hand delivery:
1. stating the name and address of the holder of old notes and the amount
of old notes tendered,
2. stating that the tender is being made, and
3. guaranteeing that within three New York Stock Exchange trading days
after the expiration time, the certificates for all physically tendered
old notes, in proper form for transfer, or a book-entry confirmation,
as the case may be, and a properly completed and duly executed letter
of transmittal, or an agent's message, and any other documents required
by the letter of transmittal will be deposited by the eligible
institution with the exchange agent; and
- the certificates for all physically tendered old notes, in proper form
for transfer, or a book-entry confirmation, as the case may be, and a
properly completed and duly executed letter of transmittal, or an agent's
message, and all other documents required by the letter of transmittal,
are received by the exchange agent within three New York Stock Exchange
trading days after the expiration time.
DETERMINATION OF VALIDITY
We will determine in our sole discretion all questions as to the validity,
form and eligibility of old notes tendered for exchange. This discretion extends
to the determination of all questions concerning the timing of receipts and
acceptance of tenders. These determinations will be final and binding. We
reserve the right to reject any particular old note not properly tendered or of
which our acceptance might, in our judgment or our counsel's judgment, be
unlawful. We also reserve the right to waive any defects or irregularities or
conditions of the exchange offer as to any particular old note either before or
after the expiration time, including the right to waive the ineligibility of any
tendering holder. Our interpretation of the terms and conditions of the exchange
offer as to any particular old note either before or after the applicable
expiration time, including the letter of transmittal and the instructions to the
letter of transmittal, shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of old notes must be
cured within a reasonable period of time.
Neither we, the exchange agent nor any other person will be under any duty
to give notification of any defect or irregularity in any tender of old notes.
Moreover, neither we, the exchange agent nor any other person will incur any
liability for failing to give notifications of any defect or irregularity.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; ISSUANCE OF NEW NOTES
Upon the terms and subject to the conditions of the exchange offer, we will
accept, promptly after the expiration time, all old notes properly tendered. We
will issue the new notes promptly after acceptance of the old notes. For
purposes of an exchange offer, we will be deemed to have accepted properly
tendered old notes for exchange when, as and if we have given oral or written
notice to the exchange agent, with prompt written confirmation of any oral
notice.
15
In all cases, issuance of new notes for old notes will be made only after
timely receipt by the exchange agent of:
- certificate for the old notes, or a timely book-entry confirmation of the
old notes, into the exchange agent's account at the book-entry transfer
facility;
- a properly completed and duly executed letter of transmittal or an
agent's message; and
- all other required documents.
Unaccepted or non-exchanged old notes will be returned without expense to
the tendering holder of the old notes. In the case of old notes tendered by
book-entry transfer in accordance with the book-entry procedures described
above, the non-exchanged old notes will be credited to an account maintained
with DTC as promptly as practicable after the expiration or termination of the
exchange offer. For each old note accepted for exchange, the holder of the old
note will receive a new note having a principal amount equal to that of the
surrendered old note.
INTEREST PAYMENTS ON THE NEW NOTES
The new notes will bear interest from the most recent date to which
interest has been paid on the old notes for which they were exchanged.
Accordingly, registered holders of new notes on the relevant record date for the
first interest payment date following the completion of the exchange offer will
receive interest accruing from the most recent date to which interest has been
paid. Old notes accepted for exchange will cease to accrue interest from and
after the date of completion of the exchange offer and will be deemed to have
waived their rights to receive the accrued interest on the old notes.
WITHDRAWAL RIGHTS
Tender of old notes may be withdrawn at any time before the expiration
time.
For a withdrawal to be effective with respect to old notes, the exchange
agent must receive a written notice of withdrawal at the address or, in the case
of eligible institutions, at the facsimile number, indicated under "-- Exchange
Agent" before the expiration time. Any notice of withdrawal must:
- specify the name of the person, referred to as the depositor, having
tendered the old notes to be withdrawn;
- identify the old notes to be withdrawn, including certificate numbers and
principal amount of the old notes;
- contain a statement that the holder is withdrawing its election to have
the old notes exchanged;
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered, including
any required signature guarantees, or be accompanied by documents of
transfer to have the trustee with respect to the old notes register the
transfer of the old notes in the name of the person withdrawing the
tender; and
- specify the name in which the old notes are registered, if different from
that of the depositor.
If certificates for old notes have been delivered or otherwise identified
to the exchange agent, then, prior to the release of these certificates the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and signed notice of withdrawal with signatures
guaranteed by an eligible institution, unless this holder is an eligible
institution. If old notes have been tendered in accordance with the procedure
for book-entry transfer described below, any notice of withdrawal must specify
the name and number of the account at the book-entry transfer facility to be
credited with the withdrawn old notes.
Any old notes properly withdrawn will be deemed not to have been validly
tendered for exchange. New notes will not be issued in exchange unless the old
notes so withdrawn are validly re-tendered.
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Properly withdrawn old notes may be re-tendered by following the procedures
described under "-- Procedures for Tendering" above at any time at or before the
expiration time.
We will determine all questions as to the validity, form and eligibility,
including time of receipt, of notices of withdrawal.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the exchange offer, or any
extension of any exchange offer, we will not be required to accept for exchange,
or to exchange, any old notes for any new notes, and, as described below, may
terminate an exchange offer, whether or not any old notes have been accepted for
exchange, or may waive any conditions to or amend the exchange offer, if any of
the following conditions has occurred or exists:
- there shall occur a change in the current interpretation by the staff of
the SEC which permits the new notes issued pursuant to such exchange
offer in exchange for old notes to be offered for resale, resold and
otherwise transferred by the holders (other than broker-dealers and any
holder which is an affiliate) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that
such new notes are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with any
person to participate in the distribution of the new notes;
- any action or proceeding shall have been instituted or threatened in any
court or by or before any governmental agency or body with respect to the
exchange offer which, in our judgment, would reasonably be expected to
impair our ability to proceed with such exchange offer;
- any law, statute, rule or regulation shall have been adopted or enacted
which, in our judgment, would reasonably be expected to impair our
ability to proceed with such exchange offer;
- a banking moratorium shall have been declared by United States federal or
New York State authorities which, in our judgment, would reasonably be
expected to impair our ability to proceed with such exchange offer;
- trading on the New York Stock Exchange or generally in the United States
over-the-counter market shall have been suspended by order of the SEC or
any other governmental authority which, in our judgment, would reasonably
be expected to impair our ability to proceed with such exchange offer;
- an attack on the United States, an outbreak or escalation of hostilities
or acts of terrorism involving the United States, or any declaration by
the United States of a national emergency or war shall have occurred;
- a stop order shall have been issued by the SEC or any state securities
authority suspending the effectiveness of the registration statement of
which this prospectus is a part of proceedings shall have been initiated
or, to our knowledge, threatened for that purpose or any governmental
approval has not been obtained, which approval we shall, in our sole
discretion, deem necessary for the consummation of such exchange offer;
or
- any change, or any development involving a prospective change, in our
business or financial affairs or any of our subsidiaries has occurred
which is or may be adverse to us or we shall have become aware of facts
that have or may have an adverse impact on the value of the old notes or
the new notes, which in our sole judgment in any case makes it
inadvisable to proceed with such exchange offer and/or with such
acceptance for exchange or with such exchange.
If we determine in our sole discretion that any of the foregoing events or
conditions has occurred or exists, we may, subject to applicable law, terminate
the exchange offer, whether or not any old notes have been accepted for
exchange, or may waive any such condition or otherwise amend the terms of such
exchange offer in any respect. Please read "-- Expiration, Extension and
Amendment" above.
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RESALES OF NEW NOTES
Based on interpretations by the staff of the SEC, as described in no-action
letters issued to third parties, we believe that new notes issued in the
exchange offer in exchange for old notes may be offered for resale, resold or
otherwise transferred by holders of the new notes without compliance with the
registration and prospectus delivery provisions of the Securities Act, if:
- the new notes are acquired in the ordinary course of the holder's
business;
- the holders have no arrangement or understanding with any person to
participate in the distribution of the new notes; and
- the holders are not "affiliates" of ours within the meaning of Rule 405
under the Securities Act.
However, the SEC has not considered the exchange offer described in this
prospectus in the context of a no-action letter. The staff of the SEC may not
make a similar determination with respect to the exchange offer as in the other
circumstances. Each holder who wishes to exchange old notes for new notes will
be required to represent that it meets the above three requirements.
Any holder who is an affiliate of ours or who intends to participate in the
exchange offer for the purpose of distributing new notes or any broker-dealer
who purchased old notes directly from us to resell pursuant to Rule 144A or any
other available exemption under the Securities Act:
- cannot rely on the applicable interpretations of the staff of the SEC
mentioned above;
- will not be permitted or entitled to tender the old notes in the exchange
offer; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
Each broker-dealer that receives new notes for its own account in exchange
for old notes must acknowledge that the old notes were acquired by it as a
result of market-making activities or other trading activities and agree that it
will deliver a prospectus that meets the requirements of the Securities Act in
connection with any resale of the new notes. The letter of transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Please read "Plan of Distribution."
In addition, to comply with state securities laws, the new notes may not be
offered or sold in any state unless they have been registered or qualified for
sale in such state or an exemption from registration or qualification, with
which there has been compliance, is available. The offer and sale of the new
notes to "qualified institutional buyers," as defined under Rule 144A of the
Securities Act, is generally exempt from registration or qualification under the
state securities laws. We currently do not intend to register or qualify the
sale of new notes in any state where an exemption from registration or
qualification is required and not available.
EXCHANGE AGENT
The Bank of New York has been appointed as the exchange agent for the
exchange offer. All executed letters of transmittal and any other required
documents should be directed to the exchange agent at the address or facsimile
number set forth below. Questions and requests for assistance, requests for
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additional copies of this prospectus or of the letter of transmittal and
requests for notices of guaranteed delivery should be directed to the exchange
agent addressed as follows:
THE BANK OF NEW YORK
By Facsimile for By Mail/Overnight Confirm
Eligible Institutions: Courier/Hand: By Telephone:
(212) 235-2261 The Bank of New York (212) 235-2354
Attention: Ms. Carolle Reorganization Department
Montreuil 15 Broad Street, 16th Floor
New York, New York 10007
Attention: Ms. Carolle
Montreuil
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF SUCH LETTER OF TRANSMITTAL VIA FACSIMILE OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF THE LETTER OF
TRANSMITTAL.
FEES AND EXPENSES
We have agreed to pay the exchange agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection with the exchange offer. We will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus and related documents
to the beneficial owners of old notes, and in handling or tendering for their
customers. We will not make any payment to brokers, dealers or others soliciting
acceptances of the exchange offer.
Holders who tender their old notes for exchange will not be obligated to
pay any transfer taxes on the exchange. If, however, new notes are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the old notes tendered, or if a transfer tax is imposed for
any reason other than the exchange of old notes in connection with the exchange
offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the letter of transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
We will record the new notes at the same carrying value as the old notes,
as reflected in our accounting records on the date of the exchange. Accordingly,
we will not recognize any gain or loss for accounting purposes. The expenses of
the exchange offer will be amortized over the term of the new notes.
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DESCRIPTION OF THE NOTES
The old notes were issued and the new notes will be issued under an
indenture dated as of May 17, 1996, as supplemented by the first supplemental
indenture thereto dated as of May 27, 1998, the second supplemental indenture
dated as of June 30, 2000, and the third supplemental indenture dated as of
November 16, 2001, between us and The Bank of New York, successor to Bank of
Montreal Trust Company, as trustee. We have summarized the material terms and
provisions of the indenture in this section. This summary is qualified in its
entirety by reference to the indenture, a copy of which is available from us
upon request.
GENERAL
The old notes are and the new notes will be our unsecured obligations,
ranking equal in right of payment with all of our other senior unsecured
indebtedness. The notes are scheduled to mature on November 15, 2011. We will
issue the new notes in registered, book-entry form, in denominations of $1,000
and integral multiples of $1,000.
Interest on the notes will accrue at the rate of 6 5/8% per year and will
be payable semi-annually in arrears on May 15 and November 15, commencing on May
15, 2002. We will make each interest payment to the holders of record on the
immediately preceding May 1 and November 1. The registered holder of a note will
be treated as the owner of the note for all purposes. Only registered holders
will have rights under the indenture.
Interest on the notes will accrue from the date of original issuance of the
old notes or, if interest has already been paid, from the date it was most
recently paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
We may from time to time, without consent of the existing holders, create
and issue further notes having the same terms and conditions as the old notes or
the new notes being offered hereby in all respects, except for issue date, issue
price and, if applicable, the first payment of interest thereon. Additional
notes issued in this manner will be consolidated with, and will form a single
series with, the previously outstanding notes.
RANKING
The old notes constitute and the new notes will constitute senior debt and
rank equally with all of our unsecured and unsubordinated debt and will rank
senior to any existing and future subordinated indebtedness. As of December 31,
2001, excluding the notes, we had outstanding approximately $1,275.6 million
aggregate principal amount of senior indebtedness.
The notes are unsecured and therefore will be effectively subordinated to
any indebtedness of our subsidiaries and any secured indebtedness to the extent
of the value of the assets securing the indebtedness.
We currently conduct a substantial portion of our operations through our
subsidiaries, and our subsidiaries generate a substantial portion of our
operating income and cash flow. As a result, distributions or advances from our
subsidiaries are one of the principal sources of funds necessary to meet our
debt service obligations. Contractual provisions or laws, as well as our
subsidiaries' financial conditions and operating requirements, may limit our
ability to obtain cash from our subsidiaries that we require to pay our debt
service obligations, including payments on the notes. In addition, holders of
the notes have a junior position to the claims of creditors of our subsidiaries
on their assets and earnings.
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OPTIONAL REDEMPTION
The old notes are and the new notes will be redeemable, in whole or in
part, at our option at any time at the "make-whole" redemption price equal to
the greater of:
(1) 100% of the principal amount of the notes to be redeemed, and
(2) as determined by the Quotation Agent, the sum of the present values of
the remaining scheduled payments of principal and interest on the notes
to be redeemed (not including any portion of the payments of interest
accrued as of the date of redemption) discounted to the redemption date
on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate plus 25 basis points,
plus accrued interest on and liquidated damages, if any, with respect to the
notes to be redeemed to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the notes that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt of comparable maturity to the remaining term of the notes.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of the Reference Treasury Dealer Quotations for the redemption date.
"Quotation Agent" means Credit Suisse First Boston Corporation, Lehman
Brothers Inc. or such other Reference Treasury Dealer appointed by us.
"Reference Treasury Dealers" means (1) Credit Suisse First Boston
Corporation and its successors, provided, however, that if it shall cease to be
a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), we shall substitute for it another Primary Treasury Dealer,
(2) Lehman Brothers Inc. and its successors, provided, however, that if it shall
cease to be a Primary Treasury Dealer, we shall substitute for it another
Primary Treasury Dealer and (3) any other Primary Treasury Dealer selected by
us.
"Reference Treasury Dealer Quotations" means, with respect to the Quotation
Agent and any redemption date, the average, as determined by the Quotation
Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted by the Quotation
Agent at 5:00 p.m. on the third business day preceding the redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the notes to be redeemed.
Unless we default in payment of the redemption price, on or after the
redemption date, interest will cease to accrue on the notes or portions of the
notes called for redemption.
CERTAIN COVENANTS
LIENS
The indenture refers to instruments securing indebtedness, such as a
mortgage, pledge, security interest or lien on our property or any of our
subsidiaries' property, as a "mortgage." The indenture further provides that,
subject to certain exceptions, we will not, nor will we permit any subsidiary
to, issue, assume or guarantee any indebtedness secured by a mortgage unless we
provide that the notes issued under the
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indenture will be secured equally and ratably with (or prior to) that mortgage.
Among these exceptions are:
- certain mortgages existing, or provided for under the terms of existing
agreements, on the date the old notes were originally issued;
- mortgages on current assets to secure current liabilities;
- certain mortgages that are created within one year after acquisition,
completion and/or commencement of commercial operation on, property
acquired, constructed, altered or improved by us or any of our
subsidiaries;
- certain preexisting mortgages on any property acquired and mortgages on
property of a subsidiary existing at the time it became our subsidiary;
- mortgages in favor of us or our subsidiaries;
- certain mortgages in favor of governmental bodies to secure progress,
advance or other payments;
- mortgages on any property securing indebtedness incurred for the purpose
of financing the purchase price or the cost of constructing, installing
or improving the property;
- mortgages on any property securing indebtedness issued or guaranteed by
governmental bodies; and
- any extension, renewal or replacement of the foregoing.
SALE/LEASEBACK TRANSACTIONS
The indenture provides that we will not, and we will not permit any of our
subsidiaries to, enter into any sale and leaseback transaction unless:
- at the time of entering into such sale and leaseback transaction, we or
our subsidiary would be entitled under the indenture to mortgage the
property under the indenture for an amount equal to the proceeds of the
sale and leaseback transaction without equally and ratably securing the
notes in compliance with the exceptions to the liens covenant in the
indenture; or
- within a period commencing six months prior to the consummation of the
sale and leaseback transaction and ending six months after the
consummation of such transaction, we or our subsidiary expends an amount
equal to all or a portion of the net proceeds of such sale and leaseback
transaction for property used or to be used in the ordinary course of our
or our subsidiaries' businesses, and we have elected to designate that
amount as a credit against such sale and leaseback transaction, with any
such amount not so designated to be applied as set forth in the next
paragraph; or
- during the 12-month period after the effective date of the sale and
leaseback transaction, we apply to the retirement of the notes or any of
our pari passu indebtedness:
- an amount equal to the proceeds of the property sold in the sale and
leaseback transaction, which amount shall not be less than the fair
value of such property at the time of entering into such sale and
leaseback transaction, less
- an amount equal to the principal amount of the notes and pari passu
indebtedness retired by us within that 12-month period and not
designated as a credit against any other sale and leaseback transaction
by us or any of our subsidiaries during that period.
MERGERS AND SALE OF ASSETS
The indenture provides that we may not consolidate with or merge into any
other person or convey, transfer or lease our properties and assets
substantially as an entirety to another person, unless:
- the successor person assumes all of our obligations under the notes and
the indenture; and
- we or the successor person will not immediately thereafter be in default
under the indenture.
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Upon the assumption of our obligations by a successor as described above,
subject to certain exceptions, we will be discharged from all obligations under
the notes and the indenture.
EVENTS OF DEFAULT; NOTICE AND WAIVER
The following will constitute events of default with respect to the notes
under the indenture:
(1) our failure for 30 days to pay interest or liquidated damages, if
any, after it becomes due and payable;
(2) our failure to pay principal or premium, if any, on the notes at
maturity;
(3) our failure to comply with any of our covenants or agreements in
the notes or the indenture (other than an agreement or covenant that we
have included in the indenture solely for the benefit of other series of
debt securities or that is expressly made inapplicable to the notes) for 90
days after written notice by the trustee or by the holders of at least 25%
in principal amount of all outstanding debt securities affected by that
failure;
(4) certain events involving our bankruptcy, insolvency or
reorganization; and
(5) acceleration of our or one of our subsidiary's indebtedness having
an aggregate principal amount outstanding in excess of $25,000,000 if such
indebtedness is not discharged or such acceleration is not rescinded or
annulled within 15 days after written notice to us of such acceleration.
If an event of default occurs with respect to the notes and is continuing,
then the trustee or the holders of not less than 25% in principal amount of the
notes may declare the principal amount of, accrued interest on and liquidated
damages, if any, with respect to all of the notes to be due and payable
immediately, by a notice in writing to us (and to the trustee if given by the
holders of notes), and upon any such declaration such principal, interest and
liquidated damages, shall become immediately due and payable. If an event of
default relating to certain events involving our bankruptcy, insolvency or
reorganization occurs and is continuing, the principal of, accrued interest on
and liquidated damages, if any, with respect to all the notes will become
immediately due and payable without any declaration or other act on the part of
the trustee or any holders of the notes.
A default under one series of debt securities issued under the base
indenture will not necessarily be a default under another series. The trustee
will give notice to holders of the notes of any continuing default known to the
trustee within 90 days after the trustee becomes aware of such default provided
that, except in the case of a default as described in clauses (1) and (2) above,
the trustee may withhold notice if it determines in good faith that withholding
the notice is in the interests of the holders.
The holders of a majority in aggregate principal amount of the outstanding
notes may direct the time, method and place of conducting any proceeding for any
remedy available to the trustee or exercising any trust or power conferred on
the trustee; provided that the direction may not conflict with any law or the
indenture and will be subject to certain other limitations. Before proceeding to
exercise any right or power under the indenture at the direction of the holders,
the trustee will be entitled to receive from the holders reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities
incurred by it in complying with their direction. No holder of any debenture
will have any right to pursue any remedy with respect to the indenture or the
notes unless:
(1) the holder has previously given us and the trustee written notice
of a continuing event of default;
(2) holders of at least 25% in aggregate principal amount at maturity
of the outstanding notes have made a written request to the trustee to
pursue the remedy;
(3) the holder or holders have offered to the trustee reasonable
indemnity satisfactory to the trustee;
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(4) the holders of a majority in aggregate principal amount of the
outstanding notes have not given the trustee a direction inconsistent with
the request within 60 days after receipt of the request; and
(5) the trustee has failed to comply with the request within the
60-day period.
However, the right of any holder to receive payments of principal, any
premium, any interest and any liquidated damages due in respect of a note, and
the right to institute suit for the enforcement of any payments will not be
impaired or adversely affected without the holder's consent.
The holders of at least a majority in aggregate principal amount of the
outstanding notes may waive an existing default and its consequences, other
than:
- any default in any payment on the notes; or
- any default in respect of certain covenants or provisions in the
indenture which may not be modified without the consent of the holder of
each note as described under the caption entitled "-- Modification and
Waiver" below.
We are required to furnish to the trustee annually a statement as to any
default by us in the performance and observance of our obligations under the
indenture.
MODIFICATION AND WAIVER
We may amend, modify or supplement the indenture with the consent of the
holders of not less than a majority in aggregate principal amount of the notes.
Notwithstanding the foregoing, no amendment may, without the consent of each
holder affected:
(1) change the stated maturity of the principal of or any installment
of interest on any note, reduce the principal amount of or rate of interest
on or premium payable on redemption of any note, change any redemption date
or any obligation to pay additional amounts pursuant to the indenture,
change the currency in which any note is payable, or impair the right of
any holder to institute suit to enforce payment on or after the stated
maturity or, in the case of a redemption, any redemption date, of any note;
or
(2) reduce the percentage in principal amount of the outstanding
notes, the consent of whose holders is required for any amendment to the
indenture or any waiver of certain provisions of the indenture, or reduce
the requirements of the indenture with respect to quorum or voting of the
notes; or
(3) change any obligation of ours to maintain an office or agency in
the places and for the purposes specified in the indenture; or
(4) subject to specified exceptions, modify certain of the provisions
of the indenture relating to modification or waiver of provisions of the
indenture.
The indenture also provides for certain modifications of its terms without
the consent of the holders.
DEFEASANCE
At any time we may terminate our obligations under the notes and the
indenture in a "legal defeasance." If we choose to terminate our obligations in
a legal defeasance, the holders of the notes will not be entitled to the
benefits of the indenture, except for certain obligations, including those
respecting the defeasance trust and obligations to register the transfer or
exchange of the notes, to replace mutilated, destroyed, lost or stolen notes, to
maintain a place of payment, to maintain a registrar and paying agent in respect
of the notes, and certain other obligations set forth in the indenture. At any
time we may be released from our obligations described above under the captions
entitled "-- Certain Covenants" and "-- Mergers and Sale of Assets" in a
"covenant defeasance".
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We may exercise our legal defeasance option notwithstanding our prior
exercise of our covenant defeasance option. If we exercise our legal defeasance
option, payment of the notes may not be accelerated because of an event of
default with respect thereto. If we exercise our covenant defeasance option,
payment of the notes may not be accelerated because of an event of default under
the third and fifth events of default described above under the caption entitled
"-- Events of Default; Notice and Waiver".
In order to exercise either defeasance option, we must irrevocably deposit
in trust with the trustee money or certain U.S. government obligations
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay and discharge the principal of and premium, if any, and each
installment of interest (a "defeasance trust"), and must comply with certain
other conditions, including:
- that no default has occurred and is continuing on the date of the deposit
in trust or, if an event of default arises out of our bankruptcy,
insolvency or reorganization, at any time during the period ending on the
121st date after the date of the deposit in trust; and
- the delivery to the trustee of an opinion of counsel to the effect that
holders of the notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred.
In the case of legal defeasance only, the opinion of counsel described above
must be based on a ruling of the Internal Revenue Service or other change in
applicable federal income tax law.
GOVERNING LAW
The indenture and the notes are governed by, and construed in accordance
with, the laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEE
We have appointed The Bank of New York as trustee under the indenture, and
as paying agent, registrar and custodian with regard to the notes.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
We will issue the notes in registered form. We will not charge a service
charge for any registration of transfer or exchange of the notes. We may,
however, require the payment of any tax or other governmental charge payable for
that registration.
We have appointed the trustee as security registrar for the notes. We may
at any time rescind that designation or approve a change in the location through
which any registrar acts. We are required to maintain an office or agency for
transfers and exchanges in each place of payment. We may at any time designate
additional registrars for the notes.
In the case of any redemption, the security registrar will not be required
to register the transfer or exchange of any note either:
- during a period beginning 15 business days prior to the expected mailing
of the relevant notice of redemption and ending on the close of business
on the day of mailing of such notice; or
- if the notes have been called for redemption, in whole or in part, except
the unredeemed portion of any debenture being redeemed in part.
PAYMENT AND PAYING AGENTS
Payments on the notes will be made in U.S. dollars at the office or agency
of the paying agent, currently the trustee, in the Borough of Manhattan, The
City of New York, or any other office of the paying agent maintained for this
purpose. At our option, however, we may make payments by check
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mailed to the holder's registered address or, with respect to global securities,
by wire transfer. We will make payments of interest and liquidated damages, if
any, to the person in whose name the note is registered at the close of business
on the record date for the interest payment.
The trustee will be designated as our paying agent for payments on notes.
We may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying
agent acts.
Subject to the requirements of any applicable abandoned property laws, the
trustee and paying agent shall pay to us upon written request any money held by
them for payments on the notes that remain unclaimed for two years after the
date upon which that payment has become due. After payment to us, holders
entitled to the money must look to us for payment. In that case, all liability
of the trustee or paying agent with respect to that money will cease.
BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the notes are initially issued in the form of
one or more registered notes in global form without interest coupons. Each
global note will be deposited with the trustee as custodian for, and registered
in the name of a nominee of, DTC.
Ownership of beneficial interests in a global note will be limited to
persons who have accounts with DTC ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in a global
note will be shown on, and the transfer of that ownership will be effected only
through, records maintained by DTC or its nominee, with respect to interests of
participants, and the records of participants, with respect to interests of
persons other than participants. Holders may hold their interests in a global
note directly through DTC if they are participants in such system, or indirectly
through organizations which are participants in such system.
So long as DTC , or its nominee, is the registered owner or holder of a
global note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the notes represented by such global note for all
purposes under the indenture and the notes. No beneficial owner of an interest
in a global note will be able to transfer that interest except in accordance
with DTC's applicable procedures, in addition to those provided for under the
indenture.
Payments of the principal of, and interest on, a global note will be made
to DTC or its nominee, as the case may be, as the registered owner thereof.
Neither we, the trustee nor any Paying Agent 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 note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest in respect of a global note, will credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such global note as shown on the records of DTC or its
nominee. We also expect that payments by participants to owners of beneficial
interests in such global note held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds.
We expect that DTC will take any action permitted to be taken by a holder
of notes, including the presentation of notes for exchange as described below,
only at the direction of one or more participants to whose account DTC interests
in a global note is credited and only in respect of such portion of the
aggregate principal amount of notes as to which such participant or participants
has or have given such direction. However, if there is an Event of Default under
the notes, DTC will exchange the global note for
26
notes in registered form without interest coupons ("certificated notes"), which
it will distribute to its participants.
We understand that DTC is a limited purpose trust company organized under
the laws of the State of New York, a "banking organization" within the meaning
of New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a "Clearing
Agency" registered pursuant to the provisions of Section 17A of the Securities
and Exchange Act of 1934, as amended. DTC was created to hold securities for its
participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical movement
of certificates. Indirect access to DTC's system is available to others such as
banks, brokers, dealers and trust companies and certain other organizations that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly ("indirect participants").
Although DTC is expected to follow the foregoing procedures in order to
facilitate transfers of interests in a global note among participants of DTC, it
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither we nor the trustee will
have any responsibility for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
If DTC is at any time unwilling or unable to continue as a depositary for
the global notes and we do not appoint a successor depositary within 90 days, we
will issue certificated notes in exchange for the global notes. Holders of an
interest in a global note may receive certificated notes in accordance with
DTC's rules and procedures in addition to those provided for under the
indenture.
OLD NOTES
The terms of the old notes are identical in all material respects to those
of the new notes, except that (1) the old notes have not been registered under
the Securities Act, are subject to certain restrictions on transfer and are
entitled to certain rights under the registration rights agreement (which rights
will terminate upon consummation of the exchange offer, except under limited
circumstances); and (2) the new notes will not provide for any liquidated
damages as a result of our failure to fulfill certain registration obligations.
The old notes provide that:
- in the event that the exchange offer is not consummated within 210 days
after the date the old notes were originally issued;
- in certain limited circumstances, in the event a shelf registration
statement with respect to the resale of the old notes is not filed within
60 days from the date on which the obligation to file such shelf
registration statement arises or is not declared effective within 90 days
from the date on which the obligation to file such shelf registration
statement arises; or
- if the shelf registration statement ceases to be effective or usable,
then liquidated damages will accrue on the old notes for the period from
the occurrence of such event until the earlier of such time as the
exchange offer is consummated or any required shelf registration
statement is effective. During the time that the liquidated damages are
accruing, the rate of such liquidated damages shall be 0.25% per year
during the first 90-day period and shall increase by 0.25% per year for
each subsequent 90-day period, but in no event shall exceed 0.50% per
year. The new notes are not, and upon consummation of the exchange offer
will not be, entitled to any liquidated damages.
27
If:
(1) the exchange offer is not permitted by applicable law or SEC policy or
(2) any holder of notes that are transfer restricted securities notifies us
prior to the 20th day following consummation of the exchange offer that
(a) it is prohibited by law or SEC policy from participating in the
exchange offer, or
(b) it may not resell the new notes acquired by it in the exchange offer
to the public without delivering a prospectus and this prospectus is
not appropriate or available for those resales; or
(c) it is a broker-dealer and owns notes acquired directly from us or
one of our affiliates,
then we will file with the SEC a shelf registration statement to cover resales
of the notes by the holders who satisfy certain conditions relating to the
provision of information in connection with the shelf registration statement.
28
MATERIAL UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a discussion of the material United States federal income
tax consequences of the exchange of old notes for new notes and the ownership
and disposition of the new notes by persons who purchased the old notes from the
initial purchasers. This discussion is based upon current provisions of the
Internal Revenue Code, its legislative history, existing and proposed
regulations, published rulings and court decisions, all of which are subject to
change, possibly on a retroactive basis.
This discussion only applies to you if you hold the notes as capital
assets. The tax treatment of holders of the notes may vary depending upon their
particular situations. Particular persons including, for example, insurance
companies, tax exempt organizations, financial institutions and broker-dealers,
may be subject to special rules not discussed below. Also, this discussion does
not address the tax consequences to persons who hold the notes through a
partnership or similar pass-through entity. In addition, this discussion does
not address U.S. federal alternative minimum tax consequences or any aspect of
state, local or foreign taxation. Holders are urged to consult their own tax
advisors regarding the particular United States federal tax consequences of
holding and disposing of notes, as well as any tax consequences that may arise
under the laws of any relevant foreign, state, local or other taxing
jurisdiction or under any applicable tax treaty.
The exchange of old notes for new notes in the exchange offer will not be
an exchange or otherwise a taxable event to a holder for United States federal
income tax purposes. Accordingly, a holder will have the same tax basis and
holding period in the new notes as it had in the old notes immediately before
the exchange.
TAX CONSEQUENCES TO U.S. HOLDERS
For purposes of this discussion, you are a "U.S. holder" if you are a
beneficial owner of a note and are a U.S. citizen or resident, a corporation or
other entity (other than a partnership) created or organized in or under the
laws of the U.S. or of any political subdivision thereof, an estate, the income
of which is subject to U.S. federal income taxation regardless of its source, or
a trust if (i) a U.S. court is able to exercise primary supervision over its
administration and one or more U.S. persons have the authority to control all of
its substantial decisions or (ii) the trust has elected to be treated as a
"United States person" pursuant to applicable Treasury regulations.
Payment of Interest. If you are a U.S. holder, interest on your notes
generally will be taxable as ordinary interest income at the time payments are
accrued or are received in accordance with your regular method of accounting for
federal income tax purposes. In the event we do not comply with certain
covenants, we will be obligated to pay specified liquidated damages to the
holders of the notes. We believe the contingency that we will pay these
additional amounts is "remote and incidental" within the meaning of the
applicable Treasury regulations. On that basis, we believe the possibility that
these additional amounts may be paid should not be taken into account in
computing original issue discount.
Sale, Exchange, Redemption or Retirement of the Notes. Upon the sale,
exchange, redemption, retirement at maturity or other disposition of a note you
generally will recognize gain or loss equal to the difference, if any, between
the proceeds received on the disposition (less any portion allocable to accrued
and unpaid interest) and your adjusted tax basis in the note. Your adjusted tax
basis in the notes generally will be your cost for the notes, less any principal
payments you receive.
The gain or loss you recognize on the disposition of the notes generally
will be capital gain or loss and will be long-term capital gain or loss if you
have held the notes for more than one year. You should consult your tax advisor
regarding the treatment of capital gains (which may be taxed at lower rates than
ordinary income for certain noncorporate taxpayers) and losses (the
deductibility of capital losses by U.S. holders is subject to limitations).
To the extent that any amount received in connection with the disposition
of a note represents accrued but unpaid interest, that amount must be taken into
account as interest income, if it was not previously included in your income.
29
Backup Withholding and Information Reporting. Backup withholding and
information reporting requirements may apply to certain payments ("reportable
payments") of principal and interest on a note, and to proceeds of the sale or
redemption of a note before maturity. We, our agent, a broker, the trustee or
any paying agent, as the case may be, will be required to withhold from any
reportable payment that is subject to backup withholding a tax equal to 30% of
the payment if, among other things, a U.S. holder fails to furnish his taxpayer
identification number (social security or employer identification number),
certify that the number is correct, certify that the holder is not subject to
backup withholding or otherwise comply with the applicable requirements of the
backup withholding rules. Certain U.S. holders, including all corporations, are
not subject to backup withholding and information reporting requirements for
payments made in respect of the notes. The backup withholding rate is currently
30%. This rate will be gradually reduced each year until 2006, when the backup
withholding rate will be 28%. After December 31, 2010, the backup withholding
rate will be increased to 31%. Any amounts withheld under the backup withholding
rules from a reportable payment to a U.S. holder will be allowed as a credit
against the U.S. holder's United States federal income tax liability and may
entitle the holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.
The amount of any reportable payments, including interest, made to the
record U.S. holders of notes (other than to holders which are exempt recipients)
and the amount of tax withheld, if any, with respect to these payments will be
reported to the U.S. holders and to the IRS for each calendar year.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
For purposes of this discussion, you are a "non-U.S. holder" if you are a
beneficial owner of notes who is not a "U.S. holder."
Payment of Interest. Generally, interest we pay to you will not be subject
to United States federal income tax or withholding tax, provided that this
interest income is not effectively connected with your conduct of a United
States trade or business and:
- you do not actually or constructively own 10% or more of the combined
voting power of all classes of our stock,
- you are not, for United States federal income tax purposes, a controlled
foreign corporation related to us within the meaning of the Internal
Revenue Code,
- you are not a bank receiving interest on a loan entered into in the
ordinary course of its business within the meaning of the Internal
Revenue Code, and
- either (A) you provide IRS Form W-8BEN or W-8IMY, as appropriate (or a
suitable substitute form), signed under penalties of perjury that
includes your name and address and certify as to your non-U.S. holder
status in compliance with applicable law and regulations or (B) you hold
your notes through a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary
course of its trade or business and that provides a statement signed
under penalties of perjury in which it certifies to us or our agent that
IRS Form W-8BEN or W-8IMY, as appropriate (or suitable substitute), has
been received by it from you or a qualifying intermediary and furnishes
us or our agent with a copy of the form.
If these conditions are not satisfied, then interest paid on the notes will
be subject to U.S. federal withholding tax at a rate of 30% unless that rate is
reduced or eliminated pursuant to an applicable tax treaty and you provide a
properly completed and executed IRS Form W8-BEN, as provided for in the Treasury
regulations.
Sale, Exchange or Redemption of the Notes. You generally will not be
subject to United States federal income tax or withholding tax on any gain
realized on the sale, exchange, redemption or other disposition of a note
unless:
- the gain is effectively connected with your conduct of a United States
trade or business, or, under an applicable tax treaty, is attributable to
a permanent establishment you maintain in the United States, or
30
- if you are an individual, you are present in the United States for a
period or periods aggregating 183 days or more during the taxable year of
the disposition and specific other requirements are met.
Effectively Connected Income. You generally will be subject to U.S. federal
income tax at regular federal income tax rates on interest, gain or other income
you recognize on a note that is effectively connected with your conduct of a
United States trade or business. Effectively connected income received by a
corporate non-U.S. holder may also, under certain circumstances, be subject to
an additional "branch profits tax" at a 30% rate or, if applicable, a lower
treaty rate. Even though this effectively connected income is subject to income
tax, and may be subject to the branch profits tax, it is not subject to
withholding tax, unless derived through a partnership, if you deliver IRS Form
W-8ECI or successor form to the payor.
U.S. Federal Estate Tax Considerations. A note beneficially owned by an
individual who is not a citizen or resident of the United States at the time of
death will generally not be includable in the decedent's gross estate for United
States federal estate tax purposes, provided that the beneficial owner did not
at the time of death actually or constructively own 10% or more of the combined
voting power of all classes of our stock entitled to vote, and provided that, at
the time of the holder's death, payments with respect to that note would not
have been effectively connected with the holder's conduct of a trade or business
within the United States.
Information Reporting and Backup Withholding Tax. United States information
reporting requirements and backup withholding tax generally will not apply to
payments of interest and principal on a note if you provide the statement
described in "-- Payment of Interest" or otherwise establish an exemption,
provided that we do not have actual knowledge that you are a United States
person.
Information reporting requirements and backup withholding tax generally
will not apply to any payment of the proceeds of the sale of a note effected
outside the United States by a foreign office of a "broker." However, if the
broker:
- is a United States person,
- derives 50% or more of its gross income from all sources for certain
periods from the conduct of a United States trade or business,
- is a controlled foreign corporation for United States tax purposes, or
- is a foreign partnership in which one or more United States persons, in
the aggregate, own more than 50% of the income or capital interests in
the partnership or a foreign partnership that is engaged in a trade or
business in the United States,
payment of the proceeds will be subject to information reporting requirements
unless the broker has documentary evidence in its records that you are a
non-U.S. holder and certain other conditions are met, or you otherwise establish
an exemption.
Payment of the proceeds of any sale of a note to or through the United
States office of a broker, whether foreign or United States, is subject to
information reporting and backup withholding requirements, unless you provide
the statement described in "-- Payment of Interest" or otherwise establish an
exemption and the broker does not have actual knowledge that you are a United
States person or that the exemption conditions are not satisfied.
The backup withholding rate is currently 30%. This rate will be gradually
reduced each year until 2006, when the backup withholding rate will be 28%.
After December 31, 2010, the backup withholding rate will be increased to 31%.
Any amounts withheld from a payment to you under the backup withholding rules
will be allowed as a credit against your United States federal income tax
liability and may entitle you to a refund, provided that the required
information is provided to the IRS.
THIS FEDERAL TAX DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND
MAY NOT BE APPLICABLE DEPENDING UPON YOUR PARTICULAR SITUATION. YOU SHOULD
CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO YOU OF THE
OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
FEDERAL OR OTHER TAX LAWS.
31
CERTAIN ERISA CONSIDERATIONS
The following is a summary of certain considerations associated with the
purchase of the notes by employee benefit plans that are subject to Title I of
the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
plans, individual retirement accounts and other arrangements that are subject to
Section 4975 of the Internal Revenue Code (the "Code") or provisions under any
federal, state, local, non-U.S. or other laws or regulations that are similar to
such provisions of the Code or ERISA (collectively, "Similar Laws"), and
entities whose underlying assets are considered to include "plan assets" of such
plans, accounts and arrangements (each, a "Plan").
GENERAL FIDUCIARY MATTERS
ERISA and the Code impose certain duties on persons who are fiduciaries of
a Plan subject to Title I of ERISA or Section 4975 of the Code and prohibit
certain transactions involving the assets of a Plan and its fiduciaries or other
interested parties. Under ERISA and the Code, any person who exercises any
discretionary authority or control over the administration of such a Plan or the
management or disposition of the assets of such a Plan, or who renders
investment advice for a fee or other compensation to such a Plan, is generally
considered to be a fiduciary of the Plan.
In considering an investment in the notes of a portion of the assets of any
Plan, a fiduciary should determine whether the investment is in accordance with
the documents and instruments governing the Plan and the applicable provisions
of ERISA, the Code or any similar law relating to a fiduciary's duties to the
Plan including, without limitation, the prudence, diversification, delegation of
control and prohibited transaction provisions of ERISA, the Code and any other
applicable Similar Laws
Any insurance company proposing to invest assets of its general account in
the notes should consider the extent that such investment would be subject to
the requirements of ERISA in light of the U.S. Supreme Court's decision in John
Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank and under any
subsequent legislation or other guidance that has or may become available
relating to that decision, including the enactment of Section 401(c) of ERISA by
the Small Business Job Protection Act of 1996 and any related regulations.
PROHIBITED TRANSACTION ISSUES
Section 406 of ERISA and Section 4975 of the Code prohibit Plans subject to
Title I of ERISA or Section 4975 of the Code from engaging in specified
transactions involving plan assets with persons or entities who are "parties in
interest," within the meaning of ERISA, or "disqualified persons," within the
meaning of Section 4975 of the Code, unless an exemption is available. A party
in interest or disqualified person who engaged in a non-exempt prohibited
transaction may be subject to excise taxes and other penalties and liabilities
under ERISA and the Code. In addition, the fiduciary of the Plan that engaged in
such a non-exempt prohibited transaction may be subject to penalties and
liabilities under ERISA and the Code. The acquisition and/or holding of notes by
a Plan with respect to which we, our affiliates or the Initial Purchasers are
considered a party in interest or a disqualified person may constitute or result
in a direct or indirect prohibited transaction under ERISA and/or the Code,
unless the investment is acquired and is held in accordance with an applicable
statutory, class or individual prohibited transaction exemption. In this regard,
the U.S. Department of Labor has issued prohibited transaction class exemptions,
or "PTCEs," that may apply to the acquisition and holding of the notes. These
class exemptions include PTCE 84-14 respecting transactions determined by
independent qualified professional asset managers, PTCE 90-1 respecting
insurance company pooled separate accounts, PTCE 91-38 respecting bank
collective investment trusts, PTCE 95-60 respecting life insurance company
general accounts and PTCE 96-23 respecting transactions determined by in-house
asset managers. However, there can be no assurance that all of the conditions of
any such exemptions will be satisfied, or, if satisfied, that the scope of the
relief will cover all acts which might be construed as prohibited transactions.
Because of the foregoing, the notes should not be purchased or held by any
person investing "plan assets" of any Plan, unless such purchase and holding
will not constitute a non-exempt prohibited
32
transaction under ERISA and the Code or similar violation of any applicable
Similar laws whether pursuant to an applicable exemption or otherwise.
The foregoing discussion is general in nature and is not intended to be all
inclusive. Due to the complexity of these rules and the penalties that may be
imposed upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries, or other persons considering purchasing
the notes on behalf of, or with the assets of, any Plan, consult with their
counsel regarding the potential applicability of ERISA, Section 4975 of the Code
and any similar laws to such investment and whether an exemption would be
applicable to the purchase and holding of the notes.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the new notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of new notes received in exchange for old notes where the old notes
were acquired as a result of market-making activities or other trading
activities. We have agreed that for 90 days after the closing of the exchange
offer we will make this prospectus, as amended or supplemented, available to any
broker-dealer that requests these documents from the exchange agent for use in
connection with resales of the new notes. In addition, until , 2002,
all dealers effecting transactions in the new notes may be required to deliver a
prospectus.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account in
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the new notes or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any resale of the new notes may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such new notes. Any broker-dealer
that resells new notes that were received by it for its own account in the
exchange offer and any broker or dealer that participates in a distribution of
the new notes may be deemed to be an "underwriter" within the meaning of the
Securities Act. Any profit on any resale of new notes and any commissions or
concessions received by any persons deemed to be underwriters may be deemed to
be underwriting compensation under the Securities Act. The enclosed letter of
transmittal states that by acknowledging that it will deliver and be delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days after the closing of the exchange offer, we will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer other than commissions or concessions of any brokers or dealers
and will indemnify the holders of the old notes (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
Following completion of the exchange offer, we may, in our sole discretion,
commence one or more additional exchange offers to holders of old notes who did
not exchange their old notes for new notes in the exchange offer on terms which
may differ from those contained in this prospectus and the enclosed letter of
transmittal. This prospectus, as it may be amended or supplemented from time to
time, may be used by us in connection with any additional exchange offers. These
additional exchange offers may take place from time to time until all
outstanding old notes have been exchanged for new notes, subject to the terms
and conditions in the prospectus and letter of transmittal distributed by us in
connection with these additional exchange offers.
33
LEGAL OPINIONS
The validity of the new notes will be passed upon for us by Andrews &
Kurth, Mayor, Day, Caldwell & Keeton L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements of Weatherford International, Inc.
and the related consolidated financial statement schedule incorporated by
reference in this prospectus and elsewhere in the registration statement, to the
extent and for the periods indicated in their reports, have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated by
reference in reliance upon the authority of said firm as experts in giving said
report.
34
[WEATHERFORD LOGO]
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") empowers a Delaware corporation to indemnify any person who was or is a
party, or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful.
A Delaware corporation may indemnify past or present officers and directors
of such corporation or of another corporation or other enterprise at the former
corporation's request, in an action by or in the right of the corporation to
procure a judgment in its favor under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in defense of any action
referred to above, or in defense of any claim, issue or matter therein, the
corporation must indemnify such person against the expenses (including
attorneys' fees) which such person actually and reasonably incurred in
connection therewith. Section 145 further provides that any indemnification
shall be made by the corporation only as authorized in each specific case upon a
determination that indemnification of such person is proper because he has met
the applicable standard of conduct (i) by the stockholders, (ii) by a majority
vote of the directors who are not parties to such action, suit or proceeding,
even though less than a quorum, (iii) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum,
or (iv) by independent legal counsel in a written opinion, if there are no such
disinterested directors, or if such disinterested directors so direct. Section
145 further provides that indemnification pursuant to its provisions is not
exclusive of other rights of indemnification to which a person may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise.
As permitted by the DGCL, the amended and restated certificate of
incorporation provides that directors of Weatherford shall have no personal
liability to Weatherford or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (1) for any breach of the
director's duty of loyalty to Weatherford or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) under Section 174 of the DGCL or (4) for any transaction
from which the director derived an improper personal benefit. David J. Butters
and Robert B. Millard, employees of Lehman Brothers Inc. ("Lehman Brothers"),
constitute two of the eight members of the Board of Directors of Weatherford.
Under the restated certificates of incorporation, as amended to date, of Lehman
Brothers and its parent, Lehman Brothers Holdings Inc. ("Holdings"), both
Delaware corporations, Messrs. Butters and Millard, in their capacity as
directors of Weatherford, are to be indemnified by Lehman Brothers and Holdings
to the fullest extent permitted by Delaware law. Messrs. Butters and Millard are
serving as directors of Weatherford at the request of Lehman Brothers and
Holdings.
The amended and restated bylaws of Weatherford provide that Weatherford
shall to the fullest extent permitted by the DGCL indemnify each of its present
and former officers and directors, and each of its present or former officers,
directors, agents or employees who are serving or have served at the request of
Weatherford as an officer, director or partner (or in any similar position) of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments,
II-1
fines and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit or proceeding,
whether by or in the right of Weatherford, by a third party or otherwise, to
which such person is made a party or threatened to be made a party by reason of
such office in Weatherford or in another corporation, partnership, joint
venture, trust or other enterprise. The amended and restated bylaws also provide
that to the fullest extent that the DGCL permits, under general or specific
authority granted by the board of directors, (a) Weatherford may furnish such
indemnification to its agents and employees with respect to their activities on
behalf of Weatherford; (b) Weatherford may furnish such indemnification to each
present or former officer, director, employee or agent of a constituent
corporation absorbed in a consolidation or merger with Weatherford and to each
officer, director, agent or employee who is or was serving at the request of
such constitute corporation as an officer, director, agent or employee of
another corporation, partnership, joint venture, trust or other enterprise; and
(c) Weatherford may purchase and maintain indemnification insurance on behalf of
any of the officers, directors, agents or employees whom it is required or
permitted to indemnify.
Section 145 of the DGCL also empowers a Delaware corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporations, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such liability
under the provisions of Section 145. Policies of insurance are maintained by
Weatherford under which its directors and officers are insured, within the
limits and subject to the limitations of the policies, against certain expenses
in connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers. Messrs. Butters and Millard are insured against certain
liabilities which they may incur in their capacity as directors pursuant to
insurance maintained by Holdings.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The following instruments and documents are included as Exhibits to this
Registration Statement.
EXHIBIT
NUMBER EXHIBIT
------- -------
1.1 Purchase Agreement between Weatherford International, Inc.
and Credit Suisse First Boston Corporation and Lehman
Brothers Inc., on behalf of the Initial Purchasers, dated
November 8, 2001.
*3.1 Amended and Restated Certificate of Incorporation of the
registrant, as amended (incorporated by reference to Exhibit
3.1 to Form 10-K (File No. 1-13086) filed March 30, 1999).
*3.2 By-laws of the registrant, as amended (incorporated by
reference to Exhibit 3.2 to Form 8-K (File No. 1-3086) filed
June 2, 1998).
*4.1 Indenture dated as of May 17, 1996, between Weatherford
Enterra, Inc. and Bank of Montreal Trust Company, as trustee
(incorporated by reference to Exhibit 4.1 to Weatherford
Enterra, Inc.'s Current Report on Form 8-K (File No. 1-7867)
filed May 28, 1996).
*4.2 First Supplemental Indenture dated and effective as of May
27, 1998, between EVI Weatherford, Inc., the successor by
merger to Weatherford Enterra, Inc., and Bank of Montreal
Trust Company, as trustee (incorporated by reference to
Exhibit 4.1 to Weatherford Enterra, Inc.'s Current Report on
Form 8-K (File No. 1-7867) filed June 2, 1998).
*4.3 Second Supplemental Indenture dated June 30, 2000, between
Weatherford International, Inc. and The Bank of New York, as
successor trustee to Bank of Montreal Trust Company
(including the form of Debenture) (incorporated by reference
to Exhibit 4.1 to Current Report on Form 8-K (File No.
1-13086) filed July 10, 2000).
II-2
EXHIBIT
NUMBER EXHIBIT
------- -------
*4.4 Third Supplemental Indenture dated November 16, 2001,
between Weatherford International, Inc. and The Bank of New
York, as trustee (incorporated by reference to Exhibit 4.11
to Form S-3 (Reg. No. 333-73770) filed November 20, 2001).
*4.5 Registration Rights Agreement, dated November 16, 2001,
among the registrant and Credit Suisse First Boston
Corporation and Lehman Brothers Inc., on behalf of the
Initial Purchasers (incorporated by reference to Exhibit
4.16 to Form S-3 (Reg. No. 333-73770) filed November 20,
2001).
5.1 Opinion of Andrews & Kurth, Mayor, Day, Caldwell & Keeton
L.L.P., as to the validity of the new notes.
12.1 Statement regarding Computation of Ratio of Earnings to
Fixed Changes.
23.1 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, on Form T-1, of The Bank
of New York, as trustee.
99.1 (a) Form of Letter of Transmittal.
(b) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(c) Form of Notice of Guaranteed Delivery.
(d) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(e) Form of Letter to Clients.
(f) Form of Exchange Agent Agreement.
---------------
* Indicates exhibits incorporated by reference as indicated.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) (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 SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that 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 with or furnished to the SEC
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.
II-3
(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) 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 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 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, the registrant has been advised
that in the opinion of the SEC 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.
(d) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(e) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the Registration Statement when it became
effective.
(f) 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 in accordance with the rules and regulations prescribed by the SEC under
Section 305(b)(2) of the Act.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement on Form S-4 to be signed on its behalf by the
undersigned, thereunto duly authorized, on this day of February, 2002.
WEATHERFORD INTERNATIONAL, INC.
By: /s/ BERNARD J. DUROC-DANNER
------------------------------------
Bernard J. Duroc-Danner
President, Chief Executive Officer,
Chairman of the Board and Director
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of the Registrant hereby constitutes and appoints Bernard J.
Duroc-Danner and Burt M. Martin (with full power to each of them to act alone)
his true and lawful attorney-in-fact and agent, with full power of substitution,
for him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute and file this registration statement under the
Securities Act of 1933, as amended, and any or all amendments (including,
without limitation, post-effective amendments), with all exhibits and any and
all documents required to be filed with respect thereto, with the Securities and
Exchange Commission or any regulatory authority, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same, as fully to all intents
and purposes as he himself might or could do, if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on February , 2002.
SIGNATURE TITLE
--------- -----
/s/ BERNARD J. DUROC-DANNER President, Chief Executive Officer, Chairman of the
------------------------------------------------ Board and Director (Principal Executive Officer)
Bernard J. Duroc-Danner
/s/ LISA W. RODRIGUEZ Vice President -- Finance and Accounting (Principal
------------------------------------------------ Financial and Accounting Officer)
Lisa W. Rodriguez
/s/ DAVID J. BUTTERS Director
------------------------------------------------
David J. Butters
/s/ PHILLIP BURGUIERES Director
------------------------------------------------
Phillip Burguieres
/s/ SHELDON B. LUBAR Director
------------------------------------------------
Sheldon B. Lubar
II-5
SIGNATURE TITLE
--------- -----
/s/ WILLIAM E. MACAULAY Director
------------------------------------------------
William E. Macaulay
/s/ ROBERT B. MILLARD Director
------------------------------------------------
Robert B. Millard
/s/ ROBERT K. MOSES, JR. Director
------------------------------------------------
Robert K. Moses, Jr.
/s/ ROBERT A. RAYNE Director
------------------------------------------------
Robert A. Rayne
II-6
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
------- -------
1.1 Purchase Agreement between Weatherford International, Inc.
and Credit Suisse First Boston Corporation and Lehman
Brothers Inc., on behalf of the Initial Purchasers, dated
November 8, 2001.
*3.1 Amended and Restated Certificate of Incorporation of the
registrant, as amended (incorporated by reference to Exhibit
3.1 to Form 10-K (File No. 1-13086) filed March 30, 1999).
*3.2 By-laws of the registrant, as amended (incorporated by
reference to Exhibit 3.2 to Form 8-K (File No. 1-3086) filed
June 2, 1998).
*4.1 Indenture dated as of May 17, 1996, between Weatherford
Enterra, Inc. and Bank of Montreal Trust Company, as trustee
(incorporated by reference to Exhibit 4.1 to Weatherford
Enterra, Inc.'s Current Report on Form 8-K (File No. 1-7867)
filed May 28, 1996).
*4.2 First Supplemental Indenture dated and effective as of May
27, 1998, between EVI Weatherford, Inc., the successor by
merger to Weatherford Enterra, Inc., and Bank of Montreal
Trust Company, as trustee (incorporated by reference to
Exhibit 4.1 to Weatherford Enterra, Inc.'s Current Report on
Form 8-K (File No. 1-7867) filed June 2, 1998).
*4.3 Second Supplemental Indenture dated June 30, 2000, between
Weatherford International, Inc. and The Bank of New York, as
successor trustee to Bank of Montreal Trust Company
(including the form of Debenture) (incorporated by reference
to Exhibit 4.1 to Current Report on Form 8-K (File No.
1-13086) filed July 10, 2000).
*4.4 Third Supplemental Indenture dated November 16, 2001,
between Weatherford International, Inc. and The Bank of New
York, as trustee (incorporated by reference to Exhibit 4.11
to Form S-3 (Reg. No. 333-73770) filed November 20, 2001).
*4.5 Registration Rights Agreement, dated November 16, 2001,
among the registrant and Credit Suisse First Boston
Corporation and Lehman Brothers Inc., on behalf of the
Initial Purchasers (incorporated by reference to Exhibit
4.16 to Form S-3 (Reg. No. 333-73770) filed November 20,
2001).
5.1 Opinion of Andrews & Kurth, Mayor, Day, Caldwell & Keeton
L.L.P., as to the validity of the new notes.
12.1 Statement regarding Computation of Ratio of Earnings to
Fixed Changes.
23.1 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, on Form T-1, of The Bank
of New York, as trustee.
99.1 (a) Form of Letter of Transmittal.
(b) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(c) Form of Notice of Guaranteed Delivery.
(d) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(e) Form of Letter to Clients.
(f) Form of Exchange Agent Agreement.
---------------
* Indicates exhibits incorporated by reference as indicated.