-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, lKcsVFUdyUFGWyqxFTTPcHJW7UJPKOZ5mOsnTH0YNZUel7//t5f7uxLEgt7ait9N EEiuD7OHqPGL5hBeUZl0bg== 0000950129-95-000343.txt : 19950424 0000950129-95-000343.hdr.sgml : 19950424 ACCESSION NUMBER: 0000950129-95-000343 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19950421 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION TEXAS PETROLEUM HOLDINGS INC CENTRAL INDEX KEY: 0000774214 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760040040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58735 FILM NUMBER: 95530062 BUSINESS ADDRESS: STREET 1: 1330 POST OAK BLVD CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7136236544 MAIL ADDRESS: STREET 1: 1330 POST OAK BLVD CITY: HOUSTON STATE: TX ZIP: 77056 S-3 1 FORM S-3 -- UNION TEXAS PETROLEUM HOLDINGS INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1995 REGISTRATION NO. 33-..... - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- UNION TEXAS PETROLEUM HOLDINGS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 76-0040040 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1330 POST OAK BOULEVARD HOUSTON, TEXAS 77056 (713) 623-6544 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) NEWTON W. WILSON, III GENERAL COUNSEL, VICE PRESIDENT-ADMINISTRATION AND SECRETARY 1330 POST OAK BOULEVARD HOUSTON, TEXAS 77056 (713) 623-6544 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) --------------------- Copies to: MARK ZVONKOVIC EDWARD SONNENSCHEIN, JR. JOHN B. TEHAN CHRISTINE B. LAFOLLETTE LATHAM & WATKINS SIMPSON THACHER & BARTLETT ANDREWS & KURTH L.L.P. 633 WEST 5TH STREET, SUITE 4000 425 LEXINGTON AVENUE 425 LEXINGTON AVENUE LOS ANGELES, CALIFORNIA 90071 NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10017 (213) 485-1234 (212) 455-2000 (212) 850-2800
--------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of the Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. / / CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- PROPOSED PROPOSED MAXIMUM MAXIMUM AGGREGATE TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE - --------------------------------------------------------------------------------------------------- Common Stock, par value $.05 per share................... 11,500,000 $23.00 $264,500,000 $91,208 - --------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------
(1) Includes 1,500,000 shares covered by the over-allotment options. (2) Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule 457(c) of the Securities Act of 1933, based on the average high and low prices per share of the registrant's Common Stock on April 19, 1995, as reported by the consolidated reporting system of the New York Stock Exchange. --------------------- 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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 EXPLANATORY NOTE This Registration Statement contains two forms of prospectus: one to be used in connection with a United States offering (the "U.S. Prospectus") and one to be used in connection with a concurrent international offering (the "International Prospectus"). The U.S. Prospectus and the International Prospectus will be identical in all respects except that they will contain different front and back cover pages and different descriptions of the plan of distribution under the caption "Underwriting" and the International Prospectus will contain an additional section under the caption "Certain United States Tax Consequences to Non-U.S. Holders." The U.S. Prospectus is included herein and is followed by those pages to be used in the International Prospectus which differ from, or are in addition to, those in the U.S. Prospectus. Each of the pages for the International Prospectus included herein has been labeled "Alternate Page for International Prospectus." If required pursuant to Rule 424(b) of the General Rules and Regulations under the Securities Act of 1933, as amended, ten copies of each of the prospectuses in the forms in which they are used after the Registration Statement becomes effective will be filed with the Securities and Exchange Commission. 3 Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. PROSPECTUS SUBJECT TO COMPLETION [LOGO] APRIL 21, 1995 10,000,000 SHARES UNION TEXAS PETROLEUM HOLDINGS, INC. COMMON STOCK ($.05 PAR VALUE) The shares of Common Stock, $.05 par value per share (the "Common Stock"), of Union Texas Petroleum Holdings, Inc. (the "Company") offered hereby (the "Shares") are being sold by the Selling Shareholder. See "Selling Shareholder and Principal Shareholder." The Company will not receive any of the proceeds from the sale of the Shares offered hereby. Upon completion of the Offerings (as defined below), the Selling Shareholder will hold approximately 27% (or 25%, if the Underwriters exercise their over-allotment options in full) of the Company's outstanding Common Stock. Of the Shares being offered, 8,000,000 shares are being offered hereby in the United States and Canada (the "U.S. Offering") and 2,000,000 shares are being offered in a concurrent international offering outside the United States and Canada (the "International Offering" and collectively with the U.S. Offering, the "Offerings"), subject to transfers between the U.S. Underwriters and the International Underwriters. The Price to Public and Underwriting Discount per Share will be identical for the U.S. Offering and the International Offering. See "Underwriting." The closing of the U.S. Offering and the International Offering are conditioned upon each other. The Common Stock is listed on the New York Stock Exchange under the symbol "UTH." On April 20, 1995, the last reported sale price of the Common Stock on the New York Stock Exchange Composite Transactions Tape was $23 3/8 per share. See "Market and Dividend Information." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------------------- PROCEEDS TO PRICE TO UNDERWRITING SELLING PUBLIC DISCOUNT SHAREHOLDER(1) Per Share............................ $ $ $ Total(2)............................. $ $ $ - ---------------------------------------------------------------------------------------------
(1) Estimated expenses of $700,000 will be payable by the Company pursuant to its obligations under a registration agreement with the Selling Shareholder. See "Selling Shareholder and Principal Shareholder." (2) The Selling Shareholder has granted to the U.S. Underwriters and the International Underwriters 30-day options to purchase up to an aggregate of 1,500,000 additional shares of Common Stock at the Price to Public, less Underwriting Discount, solely to cover over-allotments, if any. If the Underwriters exercise such options in full, the total Price to Public, Underwriting Discount and Proceeds to Selling Shareholder will be $ , $ and $ , respectively. See "Underwriting." The Shares are offered subject to receipt and acceptance by the Underwriters, to prior sale and to the Underwriters' right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that delivery of the Shares will be made at the office of Salomon Brothers Inc, Seven World Trade Center, New York, New York, or through the facilities of The Depository Trust Company, on or about May , 1995. SALOMON BROTHERS INC CS FIRST BOSTON GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. The date of this Prospectus is May , 1995. 4 AVAILABLE INFORMATION Union Texas Petroleum Holdings, Inc. is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at 7 World Trade Center, New York, NY 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60601. Copies of such materials can be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. In addition, the Company's Common Stock is listed on the New York Stock Exchange and the Pacific Stock Exchange, and the Company's 8.25% Senior Notes due 1999 are listed on the New York Stock Exchange. The Company's reports, proxy statements and other information filed under the Exchange Act may also be inspected and copied at the offices of the New York Stock Exchange, 20 Broad Street, New York, NY 10005 and the Pacific Stock Exchange, 301 Pine Street, San Francisco, CA 94104. The Company has filed with the Commission a Registration Statement on Form S-3 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which have been omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement, and to the exhibits and schedules filed therewith. All of these documents may be inspected without charge at the Commission's principal office in Washington, D.C., and copies thereof may be obtained from the Commission at the prescribed rates or may be examined without charge at the public reference facilities of the Commission. ------------------------ INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Commission (File No. 1-9019) pursuant to the Exchange Act are incorporated herein by reference: (1) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994; (2) The Company's Current Reports on Form 8-K dated January 20, 1995, February 7, 1995, February 22, 1995, March 16, 1995, March 17, 1995 and April 10, 1995; (3) The description of the Company's Common Stock, which is contained in the Registration Statement on Form 8-A dated August 6, 1987, filed by the Company to register such securities under Section 12 of the Exchange Act, as amended by amendments on Form 8 dated September 16, 1987, September 21, 1987 and September 24, 1987; and (4) All other documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made hereby. Any statement contained in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified shall not be deemed to constitute a part of this Prospectus except as so modified, and any statement so superseded shall not be deemed to constitute part of this Prospectus. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon the request of any such person, a copy of any or all documents which are incorporated herein by reference, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to the Company, at its principal executive offices at 1330 Post Oak Boulevard, Houston, TX 77056, Attention: Corporate Secretary, telephone (713) 623-6544. Quantities of natural gas are expressed in this Prospectus in terms of thousand cubic feet ("Mcf"), million cubic feet ("MMcf") or billion cubic feet ("Bcf"). Oil is quantified in terms of barrels ("Bbls"). Gas is converted into a barrel of oil equivalent ("boe") based on 5.8 Mcf of gas to one barrel of oil. ------------------------ IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK AND PACIFIC STOCK EXCHANGES OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. 2 5 PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information appearing elsewhere in this Prospectus. As used herein, the "Company" means Union Texas Petroleum Holdings, Inc. and its subsidiaries unless the context requires otherwise. The address and telephone number of the Company's principal executive offices are 1330 Post Oak Boulevard, Houston, Texas 77056, (713) 623-6544. Unless indicated otherwise, the information contained in this Prospectus assumes that the Underwriters' over-allotment options are not exercised. THE COMPANY The Company, the successor to a corporation founded in 1896, is an independent (non-integrated) oil and gas company with worldwide operations. At December 31, 1994, the Company had proved oil and gas reserves of 411 million boe. The Company's average net daily oil and gas production during 1994 and the first three months of 1995 was approximately 48,000 Bbls and 421 MMcf and 50,000 Bbls and 473 MMcf, respectively. All of the Company's oil and gas producing activities are presently conducted outside of the U.S., primarily in the U.K. sector of the North Sea, Indonesia and Pakistan. Approximately 90% of the Company's oil and gas revenues are indexed to world crude oil prices. The Company also owns an interest in and operates a U.S.-based petrochemicals business, which includes a 41.67% interest in a plant with a gross capacity to produce approximately 1.2 billion pounds of ethylene annually. The Company's strategic focus is to build shareholder value through developing its core holdings, conducting an active exploration program, pursuing oil and gas acquisition opportunities and continuing to control costs. The Company's current exploration activity includes interests in Alaska, Argentina, Tunisia, Vietnam, Ireland, the U.K., Italy, Pakistan and eastern Indonesia. Also, as part of its growth strategy, the Company has recently acquired an interest in the Britannia field, the largest undeveloped natural gas and condensate field in the U.K. North Sea. Capital expenditures (which exclude capitalized interest and acquisition costs) by the Company in 1994 totaled $131 million. Capital expenditures for 1995 are estimated to be $212 million, of which approximately one-third is allocated to exploration activities. U.K. North Sea Operations. The Company's principal properties in the U.K. North Sea are interests in the Piper, Claymore, Scapa, Saltire and Chanter oil fields, in each of which the Company owns a 20% working interest, and the Sean gas fields, in which the Company owns a 25% working interest. Major development projects undertaken by the Company at the Piper and Saltire fields were substantially completed in 1993. The Company's net daily production from the Piper and Claymore blocks averaged approximately 38,000 boe in 1994 as compared to 28,300 boe in 1993 and 13,200 boe in 1992. In November 1994, the Company acquired a 9.42% interest in the Britannia field for L100.6 million (approximately $159 million). The Company's share of total development costs for Britannia, at current exchange rates, is estimated to be approximately $200 million, with initial production expected in late 1998. At year-end 1994, the Company recorded 38 million boe of proved undeveloped reserves associated with this acquisition. Indonesia Operations. The Company's Indonesian activities consist primarily of its 37.81% working interest in a joint venture that produces natural gas and, to a lesser extent, oil and condensate from several fields in East Kalimantan, Indonesia. The natural gas is converted into liquefied natural gas ("LNG") at the Indonesian-owned LNG plant at Bontang Bay and is sold under contracts at prices that are based on a "basket" of world crude oil prices. In 1994, shipments from this plant were 247 cargoes (108 Bcf net to the Company). The Company holds its interests in this joint venture both directly through a wholly owned subsidiary and indirectly through Unimar Company ("Unimar"), a 50/50 partnership with a subsidiary of a U.K. company, LASMO plc. Pakistan Operations. The Company also participates through a joint venture in Pakistan for the exploration and production of oil and gas with working interests of 30% and 25.5% in the currently 3 6 producing fields. The Company is operator of the joint venture which produced approximately one-third of Pakistan's total domestic oil output in 1994. Petrochemicals Business. In the United States, the Company operates the Geismar ethylene plant near Baton Rouge, Louisiana, in which it owns a 41.67% interest. The plant has the gross capacity to produce approximately 1.2 billion pounds of ethylene annually. Improved ethylene margins during the last six months of 1994 had a positive impact on the Company's cash flow and net income. By December 1994, margins had risen to approximately 12 cents per pound, up from about 1 cent at the beginning of the year. The Company's ethylene margins averaged 6 cents per pound for the full year 1994. During the first quarter of 1995, ethylene margins averaged 16 cents per pound. THE OFFERINGS Common Stock offered by the Selling Shareholder: United States Offering........................ 8,000,000 shares International Offering........................ 2,000,000 shares Total(1).............................. 10,000,000 shares Common Stock to be outstanding before and after the Offerings(2).............................. 87,666,148 shares NYSE symbol for the Common Stock................ UTH Use of Proceeds................................. The Shares are being offered by the Selling Shareholder. The Company will not receive any of the proceeds.
- ------------ (1) Does not include up to 1,500,000 shares of Common Stock which may be sold by the Selling Shareholder pursuant to the Underwriters' over-allotment options. See "Underwriting." (2) Based upon outstanding shares as of March 31, 1995 and exclusive of up to 3,499,788 shares issuable on the exercise of stock options in connection with employee benefit plans. See "Capitalization" and "Management Developments." SELLING SHAREHOLDER AND PRINCIPAL SHAREHOLDER The Common Stock is being offered on behalf of two limited partnerships, Petroleum Associates, L.P. and KKR Partners II, L.P. (the "KKR Partnerships" or, collectively, the "Selling Shareholder"), both of which are affiliated with Kohlberg Kravis Roberts & Co. ("KKR"). Following the Offerings and assuming no exercise of the over-allotment options, the Selling Shareholder will own 23,333,334 shares of Common Stock, representing approximately 27% of the outstanding Common Stock. The KKR Partnerships and their general partners will continue to be able to exercise effective control over the Company through their representation on the Board of Directors of the Company (the "Board") and by reason of their substantial voting power with respect to the election of directors and actions submitted to a vote of stockholders. See "Selling Shareholder and Principal Shareholder." 4 7 SUMMARY FINANCIAL DATA The following summary financial data for the three years ended December 31, 1994, has been derived from the consolidated financial statements of the Company and should be read in conjunction with the consolidated financial statements and notes thereto incorporated herein by reference and "Capitalization," "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Prospectus. The financial information presented below for the three-month periods ended March 31, 1994 and 1995, reflects all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company's consolidated results of operations and financial position for such periods. The information shown for the three-month periods is not necessarily indicative of full year results.
THREE MONTHS ENDED YEARS ENDED DECEMBER 31, MARCH 31, ----------------------------------- --------------------- 1992 1993 1994 1994 1995 ------- ------- ------- ------- ------- (IN MILLIONS, EXCEPT PER SHARE DATA) INCOME STATEMENT DATA: Total revenues......................................... $ 714 $ 697 $ 770 $ 201 $ 246 Net income before extraordinary items and the cumulative effect of changes in accounting principles........................................... 110 31 67 27 47 Net income(a).......................................... 14 27 67 27 47 Net income (loss) applicable to common stockholders(a)...................................... (17) 27 67 27 47 Share data: Net income (loss) per share of common stock............ (.26) .31 .76 .30 .53 Common stock dividends per share....................... .20 .20 .20 .05 .05 Average number of shares outstanding................... 85.8 87.2 87.6 87.7 87.6 BALANCE SHEET DATA (AT PERIOD END): Cash and cash equivalents.............................. $ 101 $ 18 $ 8 $ 11 $ 14 Total assets........................................... 1,581 1,339 1,545 1,324 1,564 Total debt............................................. 483 450 538 443 510 Redeemable preferred stock............................. 75 -- -- -- -- Stockholders' equity................................... 269 281 349 305 403 CASH FLOW DATA: Net cash provided by operating activities.............. $ 241 $ 191 $ 215 $ 47 $ 61 Capital expenditures(b)................................ 308 192 131 23 34
- ------------ (a) In 1992, the Company recognized a $76 million charge for the cumulative effect of adopting two new accounting standards and an extraordinary loss of $20 million as a result of the early redemption of debt. (b) Capital expenditures include the Company's proportional share of such expenditures through Unimar, an equity partnership. 5 8 SUMMARY OPERATING INFORMATION The following summary of operating information has been derived from the supplementary oil and gas data to the Company's consolidated financial statements and other records of the Company and should be read in conjunction with such data in the Company's consolidated financial statements incorporated herein by reference. The proved reserves and production statistics for the Company set forth below and elsewhere in this Prospectus are net of royalties and operating interests owned by others, unless otherwise indicated. Gas is converted into a boe based on 5.8 Mcf of gas to one barrel of oil.
AT DECEMBER 31, ------------------------------ 1992 1993 1994 ------ ------ ------ NET PROVED DEVELOPED AND UNDEVELOPED OIL AND GAS RESERVES: Crude oil, including condensate and natural gas liquids (millions of barrels) United Kingdom..................................................................... 76 69 74 Indonesia.......................................................................... 13 18 19 Pakistan........................................................................... 6 5 4 Equity Partnership................................................................. 5 6 7 ------ ------ ------ Total............................................................................ 100 98 104 ===== ===== ===== Natural gas (billion cubic feet) United Kingdom..................................................................... 90 139 320 Indonesia.......................................................................... 798 1,009 973 Pakistan........................................................................... 101 102 98 Equity Partnership................................................................. 295 389 385 ------ ------ ------ Total............................................................................ 1,284 1,639 1,776 ===== ===== ===== NET PROVED DEVELOPED OIL AND GAS RESERVES: Crude oil, including condensate and natural gas liquids (millions of barrels) United Kingdom..................................................................... 25 34 57 Indonesia.......................................................................... 12 15 17 Pakistan........................................................................... 3 3 3 Equity Partnership................................................................. 5 5 7 ------ ------ ------ Total............................................................................ 45 57 84 ===== ===== ===== Natural gas (billion cubic feet) United Kingdom..................................................................... 75 131 149 Indonesia.......................................................................... 725 785 813 Pakistan........................................................................... 35 39 52 Equity Partnership................................................................. 267 300 321 ------ ------ ------ Total............................................................................ 1,102 1,255 1,335 ===== ===== =====
6 9
THREE MONTHS ENDED YEARS ENDED DECEMBER 31, MARCH 31, ------------------------------- -------- 1992 1993 1994 1995 ------- ------- ------- -------- AVERAGE NET PRODUCTION PER DAY: Crude oil, including condensate (thousands of barrels) United Kingdom(a).................................................. 13 27 35 37 Indonesia.......................................................... 5 6 6 6 Pakistan........................................................... 5 5 5 5 Equity Partnership................................................. 2 2 2 2 ------- ------- ------- ------- Total(b)....................................................... 25 40 48 50 ====== ====== ====== ====== Natural gas (million cubic feet) United Kingdom(a).................................................. 7 8 24 44 Indonesia(c)....................................................... 244 242 266 290 Pakistan........................................................... 39 43 43 43 Equity Partnership(c).............................................. 81 80 88 96 ------- ------- ------- ------- Total.......................................................... 371 373 421 473 ====== ====== ====== ====== AVERAGE SALES PRICE: Crude oil, including condensate (dollars per barrel) United Kingdom(a).................................................. $ 18.47 $ 15.10 $ 14.99 $ 16.34 Indonesia.......................................................... 20.69 17.26 15.78 17.28 Pakistan........................................................... 16.32 15.04 13.43 14.62 Equity Partnership................................................. 20.69 17.26 15.78 17.28 Natural gas (dollars per thousand cubic feet) United Kingdom(a).................................................. 3.69 2.49 2.57 3.01 Indonesia(c)....................................................... 3.22 3.00 2.72 2.94 Pakistan........................................................... 1.09 1.26 1.07 1.30 Equity Partnership(c).............................................. 3.22 3.00 2.72 2.94
- ------------ (a) Includes Piper activity beginning early 1993 and Saltire and Chanter activity beginning in the middle of 1993. (b) Excludes natural gas liquids production of 1,000, 2,000, 3,000 and 3,000 barrels per day for 1992, 1993, 1994 and the three months ended March 31, 1995, respectively. (c) Includes gas consumed in the operation of the liquefied natural gas plant in the Company's Indonesian joint venture. 7 10 USE OF PROCEEDS All of the shares of Common Stock offered hereby are being offered by the Selling Shareholder. The Company will not receive any of the proceeds of the Offerings. SELLING SHAREHOLDER AND PRINCIPAL SHAREHOLDER All of the shares of Common Stock offered hereby are being sold by the KKR Partnerships (which are referred to in this Prospectus as a single shareholder, the "Principal Shareholder"). Petroleum Associates, L.P. and KKR Partners II, L.P., currently hold 33,047,334 shares and 286,000 shares, respectively, or approximately 38% in the aggregate of the outstanding shares of Common Stock. Shares sold in each of the U.S. Offering and the International Offering, including shares sold pursuant to any exercise of the over-allotment options, will be sold by each of the KKR Partnerships in proportion to the amount of their holdings. Following the Offerings, the Selling Shareholder will hold approximately 27% of the outstanding shares of Common Stock (assuming no exercise of the over-allotment options). As a result of the KKR Partnerships' stock ownership of the Company, the KKR Partnerships and their general partners will continue to be able to exercise effective control over the Company, through their representation on the Board and by reason of their substantial voting power with respect to the election of directors and actions requiring stockholder approval. KKR Associates, the sole general partner of the KKR Partnerships, is a limited partnership of which Henry R. Kravis, George R. Roberts, Michael W. Michelson, Saul A. Fox, James H. Greene, Jr., Edward A. Gilhuly (each a director of the Company), Robert I. MacDonnell, Paul E. Raether, Michael T. Tokarz, Perry Golkin, Clifton S. Robbins and Scott Stuart are the general partners. See "Description of Capital Stock." The KKR Partnerships and the Company are parties to a consulting agreement (the "Consulting Agreement"), a copy of which is incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part. Such Consulting Agreement provides for the payment to KKR by the Company of an annual fee for financial advisory services. In 1992, 1993 and 1994, KKR was paid approximately $465,000, $512,000 and $563,000, respectively. The Company will remain obligated to pay these fees until such time as the KKR Partnerships shall own less than 20% of the shares of Common Stock outstanding. In addition, each non-employee director of the Company, including the directors affiliated with KKR, receives $40,000 per annum for serving on the Board. During 1992, the Company completed a financial restructuring through a series of transactions that significantly streamlined its capital structure and reduced its financing costs. Included in such transactions was the redemption for $300 million of all its outstanding warrants to purchase Common Stock, $145 million of which was received by the Selling Shareholder. Such warrants were redeemed with funds borrowed under the Company's then-existing credit facility. Pursuant to the sale in 1991 of certain U.S. businesses of the Company, the KKR Partnerships were indemnified as affiliates of the Company by the buyers in such transactions. The KKR Partnerships have agreed with the Underwriters not to offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or securities convertible into shares of Common Stock for 90 days after the date of this Prospectus, without the consent of the representatives of the Underwriters. In addition, the Company has agreed with the Underwriters not to offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or securities convertible into shares of Common Stock, except in connection with stock options or other incentive benefit plans, for 90 days after the date of this Prospectus without the consent of the representatives of the Underwriters. See "Underwriting." The Company and the Principal Shareholder entered into an agreement dated as of September 30, 1987 (the "Registration Agreement"), a copy of which is incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part, pursuant to which the Company agreed to register the offer and sale of shares of Common Stock held by the Selling Shareholder, including the shares of Common Stock offered hereby, under the Securities Act, and the Selling Shareholder and the Company agreed to indemnify each other against certain liabilities, including liabilities under the 8 11 Securities Act in connection with the sale of the shares pursuant to the Registration Agreement, and to contribute to payments that they may be required to make in respect thereof. Pursuant to the Registration Agreement, the Selling Shareholder is required to pay the underwriting discounts and commissions and transfer taxes, if any, associated with the Offerings, and the Company is required to pay substantially all expenses directly associated with the Offerings, including, without limitation, the cost of registering the shares offered hereby, including applicable registration and filing fees, printing expenses, certain underwriting expenses and applicable expenses for legal counsel and accountants incurred by the Company or the Selling Shareholder. Certain executive officers and key employees have registration rights with respect to shares of the Company's Common Stock purchased pursuant to stock subscription agreements with the Company. These registration rights permit the purchasers to require the Company to seek to register a pro rata portion of their shares in the event that the Company seeks to register in a public offering some or all of the Common Stock owned by the Selling Shareholder. The executive officers and key employees have waived such registration rights in connection with the Offerings. 9 12 MARKET AND DIVIDEND INFORMATION The Common Stock of the Company is listed on the New York Stock Exchange (the "NYSE") and the Pacific Stock Exchange. The following table sets forth the range of high and low sale prices as reported on the NYSE Composite Transactions Tape during the periods indicated.
PERIOD HIGH LOW ------------------------------------------------------------------- ------ ------ 1992 First Quarter.................................................... $20 7/8 $16 7/8 Second Quarter................................................... 18 3/4 15 5/8 Third Quarter.................................................... 18 7/8 16 Fourth Quarter................................................... 20 1/8 17 1/4 1993 First Quarter.................................................... $24 7/8 $17 7/8 Second Quarter................................................... 26 1/8 21 Third Quarter.................................................... 27 1/2 22 1/2 Fourth Quarter................................................... 26 1/2 19 1994 First Quarter.................................................... $22 $16 5/8 Second Quarter................................................... 20 1/8 16 1/4 Third Quarter.................................................... 20 3/8 17 Fourth Quarter................................................... 21 7/8 18 1/8 1995 First Quarter.................................................... $23 1/8 $18 1/4 Second Quarter (through April 20, 1995).......................... 23 7/8 22 1/2
The last reported sale price of the Common Stock on the NYSE on April 20, 1995, was $23 3/8 per share. Holders of Common Stock are entitled to receive cash dividends when declared by the Board out of funds legally available. Beginning with the second quarter of 1988, the Company has paid regular quarterly dividends on the Common Stock of $.05 per share each quarter. On April 13, 1995, the Company announced a dividend of $.05 per share on the Common Stock to stockholders of record as of April 28, 1995, payable on May 15, 1995. The timing and amount of future dividends will depend upon the Company's earnings and cash requirements and other factors deemed relevant by the Board. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Financial Condition and Liquidity" and "Description of Capital Stock" for certain restrictions imposed by the Company's credit facilities upon the Company with respect to the payment of dividends on the Common Stock. 10 13 CAPITALIZATION The following table sets forth the consolidated capitalization of the Company as of March 31, 1995. The sale of the shares of the Common Stock in the Offerings by the Selling Shareholder will not affect the capitalization of the Company, other than the estimated expenses of approximately $700,000 that will be paid by the Company, which expenses are not reflected in the table. The following table should be read in conjunction with the Company's consolidated financial statements and notes thereto incorporated by reference in this Prospectus.
AT MARCH 31, 1995 ----- (IN MILLIONS) Debt(a) Short-term debt, including current maturities of long-term debt........... $ 74 Long-term debt Credit facilities...................................................... 207 8.25% Senior Notes due 1999............................................ 100 8 3/8% Senior Notes due 2005........................................... 125 Other.................................................................. 4 ----- Total debt........................................................... 510 ----- Stockholders' equity Common stock, par value $.05 per share; 200,000,000 shares authorized(b).......................................................... 4 Capital in excess of par value............................................ 20 Retained earnings......................................................... 437 Treasury stock(c)......................................................... (3) Cumulative foreign exchange translation adjustment and other.............. (55) ----- Total stockholders' equity........................................... 403 ----- Total capitalization.............................................. $ 913 =====
- ------------ (a) In April 1995, the Company issued an aggregate $75 million principal amount of 8 1/2% Senior Notes due 2007 pursuant to a public offering. The net proceeds from the offering were approximately $74.1 million, which the Company used to reduce indebtedness under its $350 million credit facility and its uncommitted and unsecured lines of credit. See "Management's Discussion and Analysis of Financial Condition and Results of Operations." (b) As of March 31, 1995, there were 87,666,148 shares of Common Stock issued and outstanding. This amount does not reflect 3,499,788 shares issuable as of such date on the exercise of stock options granted by the Company in connection with employee benefit plans. See "Management Developments." (c) At March 31, 1995, the Company held in treasury 163,135 shares of Common Stock at cost, including shares purchased under the Company's stock repurchase plan adopted in April 1994, which authorized the repurchase of up to 2,000,000 shares of Common Stock. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Financial Condition and Liquidity." 11 14 SELECTED CONSOLIDATED FINANCIAL DATA The following selected consolidated financial information has been derived from the consolidated financial statements of the Company for each of the three years in the period ended December 31, 1994, which statements have been audited by Price Waterhouse LLP, and the three-month periods ended March 31, 1994 and 1995. The information set forth below should be read in conjunction with the Company's consolidated financial statements and notes thereto incorporated herein by reference and "Capitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Prospectus. The financial information presented below for the three-month periods ended March 31, 1994 and 1995, reflects all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company's consolidated results of operations and financial position for such periods. The information shown for the three-month periods is not necessarily indicative of full year results.
THREE MONTHS ENDED YEARS ENDED DECEMBER 31, MARCH 31, ------------------------------ ------------------ 1992 1993 1994 1994 1995 ------ ------ ------ ------ ------ (IN MILLIONS, EXCEPT PER SHARE DATA) STATEMENT OF CONSOLIDATED INCOME DATA: Revenues Sales and operating revenues................................... $ 669 $ 682 $ 748 $ 194 $ 240 Interest income and other revenues............................. 32 6 2 -- 1 Net income of equity investee.................................. 13 9 20 7 5 ------ ------ ------ ------ ------ Total...................................................... 714 697 770 201 246 Costs and other deductions Product costs and operating expenses........................... 318 301 300 64 79 Exploration expenses........................................... 67 94 53 13 16 Depreciation, depletion and amortization....................... 77 243(b) 169 47 47 Selling, general and administrative expenses................... 27 24 25 6 6 Interest expense............................................... 4 6 11 1 5 Preferred dividends of a subsidiary............................ 2 2 -- -- -- Other charges.................................................. 6 -- -- -- -- ------ ------ ------ ------ ------ Income (loss) before income taxes, extraordinary items and cumulative effect of changes in accounting principles.......... 213 27 212 70 93 Provision for (benefit from) income taxes........................ 103 (4) 145 43 46 ------ ------ ------ ------ ------ Income before extraordinary items and cumulative effect of changes in accounting principles............................... 110 31 67 27 47 Extraordinary items(a)........................................... (20) -- -- -- -- Cumulative effect of changes in accounting principles............ (76) (4) -- -- -- ------ ------ ------ ------ ------ Net income....................................................... $ 14 $ 27 $ 67 $ 27 $ 47 Net income (loss) applicable to common stockholders.............. (17) 27 67 27 47 ====== ====== ====== ===== ====== Net income (loss) per share of common stock...................... $ (.26) $ .31 $ .76 $ .30 $ .53 ====== ====== ====== ===== ====== Common stock dividends per share................................. $ .20 $ .20 $ .20 $ .05 $ .05 Average number of shares outstanding............................. 85.8 87.2 87.6 87.7 87.6 STATEMENT OF CASH FLOW DATA: Net cash provided by operating activities........................ $ 241 $ 191 $ 215 $ 47 $ 61 ------ ------ ------ ------ ------ Cash flows from investing activities Additions to property, plant and equipment..................... (296) (144) (300) (37) (27) Cash (required) provided by equity investee.................... 29 20 9 (6) 8 Cash (required) provided by sale of businesses, net............ (18) (43) (2) (1) (1) ------ ------ ------ ------ ------ Net cash provided (required) by investing activities........... (285) (167) (293) (44) (20) ------ ------ ------ ------ ------ Cash flows from financing activities Net proceeds from issuance of long-term notes.................. -- -- -- -- 123 Net proceeds (payments) from debt under the credit facilities................................................... 465 30 81 -- (119) Payment to settle long-term debt and capitalized lease obligations.................................................. (529) (118) (37) (35) -- Redemption of Preferred Auction Rate Stock..................... -- (75) -- -- -- Redemption of preferred stock and common stock warrants........ (500) -- -- -- -- Purchase of treasury stock..................................... -- -- (6) -- -- Proceeds from issuance of treasury stock....................... -- -- 1 -- -- Proceeds from issuance of common stock......................... 4 18 -- -- -- Net proceeds (payments) from short-term borrowings............. 6 55 47 29 (36) Dividends paid................................................. (47) (17) (18) (4) (4) ------ ------ ------ ------ ------ Net cash provided (required) by financing activities....... (601) (107) 68 (10) (36) ------ ------ ------ ------ ------ Net increase (decrease) in cash and cash equivalents............. $ (645) $ (83) $ (10) $ (7) $ 5 ====== ====== ====== ===== ======
- ------------ See accompanying notes. (Table continued on following page) 12 15
THREE MONTHS ENDED YEARS ENDED DECEMBER 31, MARCH 31, --------------------------------- -------------------- 1992 1993 1994 1994 1995 ------- ------- ------- ------- ------- (IN MILLIONS) SELECTED BALANCE SHEET DATA: Cash and cash equivalents................................... $ 101 $ 18 $ 8 $ 11 $ 14 Property, plant and equipment (net)......................... 1,199 1,089 1,286 1,064 1,295 Total assets................................................ 1,581 1,339 1,545 1,324 1,564 Total debt.................................................. 483 450 538 443 510 Redeemable preferred stock.................................. 75 -- -- -- -- Stockholders' equity........................................ 269 281 349 305 403
- ------------ (a) In 1992, the Company recognized a $76 million charge for the cumulative effect of adopting two new accounting standards and an extraordinary loss of $20 million as a result of the early redemption of debt. (b) During 1993, the Company recorded a non-cash charge to depreciation, depletion and amortization of $103 million pretax ($48 million after-tax) for the write-down of its investment in the U.K. North Sea's Piper field. 13 16 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the financial statements and notes contained in the Company's 1994 Annual Report on Form 10-K, and condensed financial statements and notes contained in the Company's Report on Form 10-Q for the quarter ended March 31, 1995. RESULTS OF OPERATIONS -- THREE MONTHS ENDED MARCH 31, 1995 COMPARED WITH THREE MONTHS ENDED MARCH 31, 1994 Net income for the three months ended March 31, 1995, was $47 million, or $.53 per share as compared to net income of $27 million, or $.30 per share reported for the same period in 1994. The current quarter was favorably impacted by higher U.S. ethylene margins and sales volumes and higher international oil and gas prices partially offset by lower Indonesian LNG volumes. Sales and operating revenues for the three months ended March 31, 1995, were $240 million, up from $194 million for the first quarter of 1994. International revenues totaled $184 million as compared to $163 million for the first quarter of 1994. In the U.K., sales and operating revenues increased by $20 million due to higher crude prices and increased sales volumes. In Indonesia, sales were $1 million below 1994 as higher crude oil and LNG prices were offset by lower LNG volumes, attributable to the contracted cargo mix which resulted in a lower average participation interest in cargoes delivered for the quarter. It is not expected that these lower LNG volumes will be made up during the remainder of 1995. In Pakistan, sales were $2 million above 1994 primarily due to higher crude oil and natural gas prices. Average prices received and volumes sold by the Company's major operations during the first quarter of 1995 and 1994, respectively, were as follows:
VOLUMES PRICES (000S PER DAY) -------------------- ---------------- 1995 1994 1995 1994 -------- -------- ------- ----- Crude oil (barrels): U.K.......................................... $ 16.34 $ 13.13 37 35 Pakistan..................................... 14.62 12.77 5 4 Indonesia.................................... 17.28 14.72 6 7 Indonesian LNG (Mcf)........................... 3.07 2.72 242 280 Pakistan natural gas (Mcf)..................... 1.30 1.11 43 46 U.K. natural gas (Mcf)......................... 3.01 2.88 44 41 U.S. ethylene (pounds)......................... .28 .15 1,338 904
Petrochemical revenues totaled $55 million as compared to $31 million in the first quarter of 1994, while operating profit was $19 million as compared to $1 million in the prior period. The increase was primarily due to higher ethylene sales prices which resulted in an increase in ethylene margins to 16 cents per pound in 1995 versus 1 cent per pound in 1994 and due to higher volumes. Exploration expenses increased by $3 million reflecting the Company's expanded 1995 exploration program. Interest expense increased by $4 million during the period due to higher levels of debt, primarily due to the funding of the Britannia acquisition during the fourth quarter of 1994 and higher interest rates. The effective tax rate decreased from the prior year due primarily to the increase in the U.S. petrochemical income, which is taxed at lower rates. 14 17 RESULTS OF OPERATIONS -- YEAR ENDED DECEMBER 31, 1994 COMPARED WITH YEAR ENDED DECEMBER 31, 1993 Net income for the year ended December 31, 1994 was $67 million, or $.76 per share, as compared to net income of $27 million, or $.31 per share reported for the year ended December 31, 1993. Included in 1993 results are certain non-recurring items; excluding these items, net income for the year ended December 31, 1993, was $54 million, or $.61 per share. The 1994 earnings were favorably impacted by higher volumes in the U.K. North Sea and Indonesia, higher U.S. ethylene margins and lower operating expenses, partially offset by lower oil and LNG prices and higher depreciation, depletion and amortization expense related to the increased production. Sales and operating revenues for 1994 were $748 million, up approximately 10% from $682 million in 1993. International revenues totaled $578 million as compared to $537 million in 1993. In the U.K., sales and operating revenues increased $52 million as lower crude prices were more than offset by increased production from the Piper block. In Indonesia, sales were $1 million below 1993 as a result of lower crude oil and LNG prices, which were partially offset by higher LNG volumes. In Pakistan, sales were $10 million below 1993 primarily due to lower prices for crude oil and natural gas. Average prices received and volumes sold by the Company's major operations during 1994 and 1993, respectively, were as follows.
VOLUMES PRICES (000S PER DAY) --------------------- ------------------- 1994 1993 1994 1993 ------- ------- ------ ------ Crude oil (barrels): U.K. .......................................... $ 14.99 $ 15.10 34 27 Pakistan....................................... 13.43 15.04 5 5 Indonesia...................................... 15.78 17.26 6 6 Indonesian LNG (Mcf)............................. 2.85 3.17 222 198 Pakistan natural gas (Mcf)....................... 1.07 1.26 43 43 U.K. natural gas (Mcf)........................... 2.57 2.49 24 8 U.S. ethylene (pounds)........................... .20 .16 1,194 1,235
Production costs per boe for the Company's oil and gas activities averaged $3.98 in 1994, down from $4.73 per boe in 1993 primarily as a result of increased volumes in the U.K., lower LNG plant costs in Indonesia and the benefits of a Company-wide cost containment program. The operating profit for the Company's petrochemical operations was $16 million above the prior year. The increase primarily resulted from improved ethylene margins reflecting higher sales prices for ethylene and lower costs. The prior year's results included four non-recurring items which in the aggregate reduced 1993 earnings by $27 million. These items included depreciation expense of $103 million ($48 million after tax) representing a write-down of the Company's investment in the Piper field, a $25 million charge to exploration expense due to the write-off of the Company's investment in the Kuvlum prospect in Alaska and a $4 million charge for the cumulative effect of adopting a new accounting standard for postemployment benefits. Partially offsetting these items was a $50 million tax benefit associated with changes to U.K. tax laws. Exploration expenses decreased by $40 million due to the prior year write-off of Kuvlum, lower worldwide operating expenditures and reduced expenditures in the U.K. and Indonesia. Depreciation, depletion and amortization decreased by $74 million due to the prior period's write-down of the Piper field, which was partially offset by increased production. Interest expense increased $5 million due to lower capitalized interest related to the Piper redevelopment project, which was substantially completed in 1993. The effective tax rate was essentially level with the prior period, adjusted for the non-recurring items mentioned previously. 15 18 RESULTS OF OPERATIONS -- YEAR ENDED DECEMBER 31, 1993 COMPARED WITH YEAR ENDED DECEMBER 31, 1992 Net income for the year ended December 31, 1993, was $27 million, or $.31 per share, as compared to net income of $14 million, or a loss of $.26 per share, reported for the year ended December 31, 1992. Included in 1993 results are certain significant items related to the U.K. North Sea's Piper field write- down, the benefit of a U.K. tax law change, the write-off of the Kuvlum prospect in Alaska and a charge for the cumulative effect of adopting a new accounting standard for postemployment benefits. Excluding these items, net income for the year ended December 31, 1993, was $54 million, or $.61 per share. The prior period's results include a $76 million charge for the cumulative effect of adopting two new accounting standards effective January 1, 1992. The prior period's results also include an extraordinary charge of $20 million for the early redemption of certain of the Company's debt in early 1992. Excluding these items, net income for the year ended December 31, 1992, was $109 million, or $.86 per share. The 1993 earnings were negatively impacted by lower oil and Indonesian LNG prices and decreased interest income on refunds of prior years' PRT. The 1993 results benefitted from the elimination of preferred stock dividends and higher worldwide oil volumes. Sales and operating revenues for 1993 were $682 million, an increase from $669 million for 1992. International revenues totaled $537 million as compared to $500 million in 1992. In the U.K., sales increased by $52 million primarily due to increased production from the Piper and Saltire fields, partially offset by lower prices. In Indonesia, sales decreased by $19 million due to lower LNG and oil prices, partially offset by increased LNG volumes. In Pakistan, sales increased $6 million due primarily to higher natural gas prices and higher oil and gas volumes. The average sales price for U.K. crude oil decreased from $18.47 to $15.10 per barrel. The average sales price received for Indonesia LNG decreased from $3.41 per Mcf to $3.17 per Mcf. The average sales price received for Pakistan natural gas increased from $1.09 per Mcf to $1.26 per Mcf. The Company's petrochemical operation's operating profit increased $4 million from the prior year due to lower costs. The average sales price of ethylene ($.16 per pound) was consistent with the prior year. Interest income and other revenues in the U.K. decreased by $21 million, primarily due to lower refunds of prior years' PRT associated with the development costs of the Piper field. Domestic interest income and other revenues were $5 million below the prior year primarily due to a lower level of interest bearing cash investments held during the current year. Exploration expenses increased by $27 million primarily due to the write-off of the Company's investment in the Kuvlum prospect in Alaska. Two exploratory wells drilled in the third quarter indicated that the prospect was not commercial as a stand-alone development. Depreciation increased by $166 million during 1993 due to increased production in the North Sea and the $103 million pretax ($48 million after-tax) write-down of the Company's investment in the Piper field. The Company's taxes decreased from the prior period primarily due to a one-time reduction in deferred taxes as a result of a decrease in the PRT rate in the North Sea, which had a one-time favorable impact to net income of approximately $50 million. Earnings per share of common stock were favorably impacted by the elimination of dividends on the preferred stock and accretion of discount on common stock warrants. Dividends on the Series B and C Preferred Stock decreased during the period by $30 million as a result of the redemption of this stock in September 1992. Similarly, accretion of discount on common stock warrants decreased in the current period by $5 million as a result of the redemption of the warrants in September 1992. In December 1992, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits," which concluded that the estimated cost of benefits provided by an employer to former or inactive employees 16 19 after employment but before retirement represents part of the compensation provided to an employee in exchange for service. The Company currently provides certain long-term benefits to disabled employees. The Company adopted the Statement effective January 1, 1993, by recording a cumulative charge to net income of approximately $4 million representing the estimated future obligation for those employees currently under the long-term disability program. In prior periods, the Company's cost of long-term disability was expensed as paid. FINANCIAL CONDITION AND LIQUIDITY General. The Company's strategic focus is to build shareholder value through developing its core holdings, conducting an active exploration program, pursuing oil and gas acquisition opportunities and continuing to control costs. The Company's capital expenditures for 1995 are estimated to be $212 million, excluding capitalized interest, an increase from the previously budgeted $170 million for 1995, which is due primarily to the Britannia field development costs. Approximately one-third of the 1995 capital budget is allocated to fund the Company's expanded worldwide exploration program, which represents an 85% increase over exploration program funds expended in 1994. A total of $74 million is included in the Company's budget for exploration activities, including at least ten exploration wells in new venture areas in Alaska, Argentina, Eastern Indonesia, Ireland, Tunisia and Vietnam, and as many as 20 wells in ongoing exploration programs in the Company's producing areas in the U.K. North Sea, Indonesia and Pakistan. The budget also includes approximately $132 million for oil and gas development programs in the Company's producing areas, including $47 million for the initial development of the Britannia field. The Company has also budgeted approximately $5 million for its petrochemical interests in the United States. In 1995, the Company intends to evaluate acquisition opportunities of developed and undeveloped oil and gas reserves and to add to its production base in the near-term. Acquisition costs are not included in the estimated capital expenditures for 1995, but the Company believes that its financial strength and available credit give it the financial resources to make acquisitions. As a result of the completion of large development projects for the Piper and Saltire fields in the U.K. North Sea and a continuation of the growing demand for Indonesian LNG, the Company experienced record levels of production from its international operations during 1994, which increased 16% from 1993 levels. The Company's objective is for production in 1995 to exceed 1994 levels. In developing its business plan for 1995, the Company expects that it will continue to have excess cash flow available after capital expenditures, required debt service and normal dividends. The business plan is based upon numerous assumptions made by management including assumptions as to the volume of oil and gas the Company will produce from its properties and the prices received for such production. Pricing for the Company's business plan is based on the assumption that the spot price of West Texas intermediate will average $18.75 per barrel for 1995. Approximately 90% of the Company's oil and gas revenues are indexed to world crude oil prices. Although management believes that the assumptions used at the time in formulating the business plan and the resultant estimate of excess cash flow were reasonable in light of world energy, financial and economic conditions, and the Company's cash requirements, such conditions could change materially, and actual results of operations, cash flows and use of cash by the Company through 1995 may vary materially from those included in the business plan. Cash flow from operations. Net cash provided by operating activities was $61 million in the first quarter of 1995, an increase of $14 million from the same period in the prior year. The improvement was primarily the result of improved ethylene margins and sales volumes and higher international oil and gas prices, partially offset by lower Indonesian LNG volumes. Net cash provided by operating activities was $215 million in 1994, an increase of $24 million from the same period in the prior year. The increase was primarily the result of increased U.K. oil and Indonesian LNG sales volumes and improved ethylene margins, partially offset by lower oil and gas prices. 17 20 During the last six months of 1994, ethylene margins improved significantly from the first six months of 1994. By December 1994, margins had risen to approximately 12 cents per pound, up from about 1 cent at the beginning of the year. The Company's ethylene margins averaged 6 cents per pound for the full year 1994, and the Company's petrochemical business posted 1994 operating profit of $24 million. The Company has utilized an average 8 cents per pound ethylene margin for the full year 1995 in its business plan for 1995. The Company estimates that a margin improvement of an average one cent per pound for an entire year at full capacity production can provide approximately an additional $5 million in operating profit and net income on an annualized basis for the petrochemical business of the Company. Ethylene margins have averaged approximately 16 cents per pound in the first quarter of 1995. The Company cannot predict the duration of the recent favorable trends in the ethylene business. The ethylene business is cyclical and there can be no assurances that margins will remain at their current levels over the near term. The prices the Company receives for its ethylene are sensitive to many factors beyond the control of the Company, such as worldwide and U.S. demand for petrochemicals, inventory levels, feedstock costs and availability, plant utilization rates, plant operations and costs and competitive capacity expansion. Capital resources. Capital expenditures for the first quarter of 1995 were $39 million including capitalized interest of $5 million. Capital expenditures for the first quarter of 1994 were $29 million including capitalized interest of $6 million. The current quarter increase was principally due to development costs for the Britannia field and increased exploration spending. Capital expenditures for 1994, exclusive of the Britannia acquisition, were $131 million, a decrease from the prior year's expenditures of $192 million primarily as a result of the completion of the large development projects in the U.K. North Sea. During 1993, Piper redevelopment costs were $22 million and Saltire development costs were $23 million. In 1994, the Company spent $45 million in Indonesia, primarily on exploration and development drilling. In 1994, 1993 and 1992, total Company capital costs incurred, including capitalized interest, totaled $309 million (including $159 million related to the Britannia acquisition), $218 million and $325 million, respectively. On November 4, 1994, the Company acquired from Fina Exploration Limited and Fina Petroleum Development Limited, subsidiaries of Petrofina SA (collectively, "Fina"), a 9.42% unit interest in the Britannia field, the largest undeveloped natural gas and condensate field in the U.K. North Sea, for 83.8 million pounds sterling (approximately $133 million). In December 1994, the U.K's Department of Trade and Industry ("DTI") approved the development program for the Britannia field. As a result of the DTI approval of the development program, the Company made a second agreed upon payment to Fina for 16.8 million pounds sterling (approximately $26 million) in December. At year-end 1994, the Company recorded 38 million boe as proved undeveloped reserves associated with the acquisition. The Company expects to record additional proved reserves from the Britannia field in the future based on the field's development results and its production history. The Company increased oil and gas properties and equipment by $219 million, resulting from the purchase price of $159 million, financed through debt, and an offset to deferred income taxes payable of $60 million. The Company's share of total development costs for Britannia, at current exchange rates, is estimated to be approximately $200 million, with $47 million budgeted for 1995 for drilling activities and initial platform fabrication and facilities work. Initial production from Britannia is expected in late 1998. The Britannia field will be operated by Britannia Operator Limited, a joint venture between Conoco (U.K.) Ltd. and Chevron U.K. Ltd. The Company has contracted to sell a substantial portion of its share of gas from Britannia under long-term sales agreements with several large gas purchasers in the U.K. Revenues from the Britannia field will be subject to U.K. corporate tax but not to U.K. government royalty or PRT. Financing activities. During 1994, the Company replaced its $650 million unsecured revolving credit facility with three unsecured credit facilities (the "Credit Facilities"). One of the Credit Facilities was a $100 million unsecured credit agreement with NationsBank of Texas, N.A. ("NationsBank"), as agent, Bank of America National Trust and Savings Association ("Bank of America") and Union Bank of Switzerland, Houston Agency ("UBS"), as co-agents. This Credit Facility was a revolver that provided for conversion of amounts outstanding on September 15, 1995 to a one-year term loan maturing 18 21 September 15, 1996. The Company has terminated this Credit Facility effective March 31, 1995 as a result of the issuance of the new senior notes discussed below. The Company's other two Credit Facilities are with NationsBank, as agent, Bank of America, and UBS, as co-agents, and certain other banks. One of these Credit Facilities is a $350 million revolver that reduces quarterly by $25 million beginning July 31, 1997 and has a final maturity of April 30, 1998. The other Credit Facility is a $200 million revolver that provides for conversion of outstanding amounts on April 30, 1995 to a one-year term loan maturing April 30, 1996. The Company has negotiated amendments to extend the maturities and certain terms on the latter two Credit Facilities, subject to execution of definitive agreements. Loans under the $350 million revolver may be made in both pounds sterling and U.S. dollars at the option of the Company. Loans under the Credit Facilities bear interest at floating market rates based on, at the Company's option, the agent bank's base rate or LIBOR, plus applicable margins, subject to increase in certain events. In addition, the $350 million revolver allows the Company to obtain up to $200 million of availability thereunder in U.S. dollar loans that bear interest at a rate determined in a competitive bid process. Borrowings under the Credit Facilities are guaranteed by certain subsidiaries of the Company that also guarantee the Company's senior notes. The Credit Facilities contain restrictive covenants, including limitations on incurrence of additional indebtedness, asset sales and mergers or consolidations. The Credit Facilities restrict the amount of total indebtedness incurred by the Company and the restricted subsidiaries referred to in the Credit Facilities, which include the guarantors and certain other subsidiaries ("Restricted Subsidiaries"), to $750 million of senior indebtedness (including the aggregate $300 million principal amount of senior notes described below and amounts drawn under the Credit Facilities) and $100 million of subordinated indebtedness. Debt of unrestricted subsidiaries and nonrecourse debt on certain assets of the Company and its subsidiaries are not limited under the Credit Facilities, subject to certain conditions. The sum of the senior notes and the commitments under the Credit Facilities equals $850 million. As a result, the Company is currently unable to fully utilize the Commitments under the Credit Facilities. However, the Company is pursuing an amendment to the restriction on total indebtedness under the Credit Facilities. The covenants also require maintenance of a certain level of stockholders' equity. Under the terms of the Credit Facilities, the Company may pay dividends and make stock repurchases, provided that such level of minimum stockholders' equity is maintained and the Company complies with the other covenants in the Credit Facilities. Based on current conditions, the Company expects to pay dividends without restriction under the Credit Facilities. At March 31, 1995, $207 million was outstanding under the Credit Facilities bearing interest at a weighted average rate of 6.8% per annum and approximately $250 million was available for additional borrowing under such existing Credit Facilities. Due to the Company's ability to obtain favorable interest rates on short-term borrowings, uncommitted and unsecured lines of credit were established with several banks. At March 31, 1995, $71 million was outstanding under these lines. These amounts outstanding bear interest at a weighted average rate of 6.9% per annum and are included in the total indebtedness restriction under the Company's Credit Facilities and reduce amounts available under the Company's Credit Facilities. Funding for the acquisition of the Britannia field was through the Company's Credit Facilities and its uncommitted and unsecured lines of credit. The Company's indirect subsidiary, Union Texas Britannia Limited ("UTBL"), which is a wholly owned subsidiary of Union Texas Petroleum Limited ("UTPL"), has received a commitment, subject to negotiation of definitive agreements, from Chemical Bank, NationsBank N.A. (Carolinas) and National Westminster Bank plc for a 150 million pounds sterling secured financing. The financing will be used to fund the Company's share of the cost of developing the Britannia field to production (including interest and other financing costs incurred prior to completion and potential cost overruns), and any remaining availability after completion may, subject to certain coverage ratios being met, be used to refinance acquisition costs. Except for certain support by UTPL related to any potential cost overruns in excess of the facility amount (limited to 30 million pounds sterling), tax benefits and administrative services, the lenders' recourse will be limited to the Britannia field project assets and is nonrecourse to the Company. The financing will have a final maturity in September 2005. The borrowings by UTBL, an unrestricted subsidiary, would not be included in the total indebtedness under the Company's Credit Facilities and will not reduce amounts available under the Credit Facilities. 19 22 In March 1995, the Company publicly issued $125 million principal amount of 8 3/8% Senior Notes due 2005 (the "8 3/8% Senor Notes") at an initial public offering price of 99.431%. In April 1995, the Company publicly issued $75 million principal amount of 8 1/2% Senior Notes due 2007 (the "8 1/2% Senior Notes" together with the 8 3/8% Senior Notes referred to as the "Senior Notes") at an initial public offering price of 99.658%. The net proceeds from the sale of the 8 3/8% Senior Notes and the 8 1/2% Senior Notes were approximately $123.3 million and $74.1 million, respectively (after deducting underwriting discount, commissions and offering expenses). The Company used such proceeds to reduce debt under the $350 million Credit Facility and its uncommitted and unsecured lines of credit. The Senior Notes represent general unsecured obligations of the Company and rank pari passu in right of payment with the Company's obligations under its Credit Facilities, its outstanding $100 million principal amount of 8.25% senior notes due 1999, and senior in right of payment to all subordinated indebtedness of the Company. The Senior Notes are guaranteed by the subsidiaries of the Company that are also guarantors under the Company's Credit Facilities and the senior notes due 1999 and contain restrictive covenants similar to the Company's senior notes due 1999. The Senior Notes are redeemable at any time, at the option of the Company, in whole or in part, at a price equal to 100% of their principal amount plus accrued interest plus a make whole premium relating to the then-prevailing Treasury Yield and the remaining life of the Senior Notes. In addition, at the 1995 Annual Meeting of Stockholders to be held May 10, 1995, the Company will seek stockholder approval to authorize a new class of 15,000,000 shares of preferred stock. The new preferred stock will provide the Company additional financing flexibility to issue from time to time this form of equity based on current market conditions. On January 4, 1994, Unimar, an equity partnership, redeemed the 8.25% convertible subordinated guaranteed debentures which were due in 1995. The Company's share of the debt redemption was approximately $18 million and was funded by additional short-term borrowings. As of December 31, 1994, the Company's scheduled maturities of long-term debt outstanding for the five-year period of 1995 through 1999 are approximately $2 million, $2 million, $28 million, $300 million and $100 million, respectively. The Company believes that it will have sufficient sources of funds to satisfy these scheduled maturities. The Company has effected refinancing alternatives in order to extend its maturities. The Company may enter into interest rate swap contracts from time to time. However, the Company did not enter into any interest rate swap contracts during 1994 or the first quarter of 1995. On April 27, 1994, the Board authorized the repurchase of up to 2,000,000 shares of Common Stock to be used for general corporate purposes, including fulfilling employee benefit program obligations. No repurchases were made by the Company during the first quarter of 1995. During 1994, the Company repurchased 307,500 shares of Common Stock at a cost of $5.6 million, a portion of which shares were used to fund employee savings and benefit plan obligations. As of March 31, 1995, 163,135 shares of Common Stock were held, at cost, as treasury shares. Financial Condition. During January 1993, the Company entered into an agreement to terminate a portion of its Houston office building lease and accordingly made a $35 million payment to the lessor in consideration of such agreement in March 1993 for which an accrual had been made in 1992. In each of the four quarters ended December 31, 1994, the Company declared and paid a dividend of approximately $4.3 million on its Common Stock. In the first quarter of 1995, the Company declared and paid a dividend of approximately $4.4 million on its Common Stock. On April 13, 1995, the Company announced a dividend on its Common Stock of $.05 per share to stockholders of record as of April 28, 1995, payable on May 15, 1995. In March 1995, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which set forth the criteria for impairment of plant, property and equipment and other long-lived assets. Adoption of the Statement is required for years beginning after December 15, 1995. The Company is still reviewing the Statement; however, the Company believes its 20 23 current policy on oil and gas asset impairment is consistent with this pronouncement and that the pronouncement will have no material impact on the Company. Effective July 1, 1993, the British Parliament enacted changes in PRT that will have an overall positive impact on the Company's operations in the North Sea. The changes included reforms which reduced PRT on producing fields in the North Sea from 75% to 50% and which abolished PRT for all new fields not licensed for development on March 16, 1993. A substantial portion of the Company's production in the U.K. benefitted from such changes. Also enacted was the elimination of PRT deductions for most exploration and appraisal expenditures incurred on or after March 16, 1993, subject to limited transitional allowances through December 31, 1994. The functional currency for translating the accounts of foreign subsidiaries is the U.S. dollar, except for subsidiaries in the United Kingdom where the functional currency is pounds sterling. The Company's revenues are predominantly based upon the world market price for crude oil, which is denominated in U.S. dollars. Certain operating costs, taxes, capital costs and intercompany transactions represent commitments settled in foreign currencies. Exchange rate fluctuations on transactions in currencies other than the functional currency are recognized as gains and losses in current period income. The Company periodically enters into foreign exchange contracts as a hedge against fluctuations in foreign currency rates. These contracts are generally of a short-term nature of three months or less. At December 31, 1994, the Company had open contracts with a net value of 5 million pounds sterling. However, there are foreign exchange risks inherent in operations such as the Company's, and the Company cannot predict with any certainty the results of currency exchange rate fluctuations. The Company also cannot predict with any degree of certainty the prices it will receive in 1995 and future years for its crude oil, LNG, natural gas and ethylene. In addition, uncertainty in the Middle East, policies of oil exporting countries and worldwide demand for products affect the Company's sales. The Company's financial condition, operating results and liquidity may be materially affected by any significant fluctuations in its sales prices. The Company's ability to service its long-term obligations and to internally generate funds for capital expenditures will be similarly affected. Likewise, the Company's business is affected by its costs and success in finding, developing or acquiring new reserves to replace its reserves depleted by production. In general, the Company's volume of production from oil and gas properties declines with the passage of time. In addition, the Company's and its co-venturers' participation share of gas volumes supplied to support Indonesian LNG sales contract extensions or additions will be significantly less than their participation share under the original long-term sales contracts. The Company's long-term strategy is to increase its production with reserve acquisitions and successful exploration and development activities. There can be no assurances that the Company will achieve such objectives. Except to the extent the Company acquires additional properties containing proved reserves or conducts successful exploration or development activities, or both, the proved reserves of the Company, and the revenues generated from production thereof (assuming no price increases), will decline as reserves are produced. Drilling activities are expensive and subject to numerous risks, including the risk that no commercially viable oil or gas production will be obtained. Increases or decreases in prices of oil and gas and in cost levels, along with the timing of development projects, will also affect revenues generated by the Company and the present value of estimated future net cash flows from its properties. Revenues generated from future activities of the Company are highly dependent upon the level of success in acquiring, finding or developing additional reserves. The Company's overseas operations are subject to certain risks, including expropriation of assets, governmental reinterpretation of applicable law and contract terms, increases in taxes and government royalties, renegotiation of contracts with foreign governments, foreign government approvals of lease, permit or similar applications and of exploration and production plans, political and economic instability, disputes between governments, payment delays, export restrictions, increased environmental regulations, limits on allowable levels of exploration and production and currency exchange losses and repatriation restrictions, as well as changes in laws and policies governing operations of companies with overseas operations generally. Foreign operations and investments may also be subject to laws and 21 24 policies of the United States affecting foreign trade, investment and taxation that could affect the conduct and profitability of these operations. All of the Company's activities are subject to the risks normally associated with exploration for and production of oil and gas as well as the production of petrochemicals. Also, the Company's activities are subject to stringent environmental regulations. The Company believes that its operations and facilities are in general compliance with existing environmental regulations. Nevertheless, the risks of substantive costs and liabilities are inherent in operations such as the Company's, and there can be no assurance that significant costs and liabilities will not be incurred in the future. MANAGEMENT DEVELOPMENTS Incentive Plan. The Company has adopted, subject to shareholder approval at its 1995 Annual Stockholders Meeting to be held on May 10, 1995, an incentive plan allowing for the grant to employees of the Company of awards including options, stock appreciation rights, restricted stock, performance awards, bonus shares and other stock-based and cash awards relating to up to 4 million shares of Common Stock. In addition, the plan would provide for an automatic initial and annual grant of options to non-employee directors (other than directors affiliated with the KKR Partnerships). If the plan is approved by the shareholders, no additional stock options will be granted under any of the Company's prior stock option plans. Succession Committee. In light of its policy mandating retirement of officers at age 65, the Company has begun to plan for a successor to the Chairman and Chief Executive Officer of the Company, A. Clark Johnson, who will be 65 on December 7, 1995. The Board has created a special committee, whose members consist of current Board members Glenn A. Cox, Edward A. Gilhuly, Michael W. Michelson and Richard R. Shinn, to study and make recommendations to the full Board regarding the succession issue so as to provide for an orderly transfer of responsibilities. DESCRIPTION OF CAPITAL STOCK The Company is authorized to issue 200,000,000 shares of Common Stock, par value $.05 per share, and 2,000,000 shares of Preferred Stock, par value $1.00 per share ("Preferred Stock"). As of March 31, 1995, 87,666,148 shares of Common Stock were outstanding. The following summary is qualified in its entirety by reference to the Company's Restated Certificate of Incorporation (the "Charter") and the Company's Bylaws ("Bylaws"), copies of which are incorporated by reference as exhibits to the Registration Statement of which this Prospectus is a part. COMMON STOCK Voting and Other Rights. The Common Stock possesses ordinary voting rights for the election of directors and in respect of other corporate matters, each share being entitled to one vote. There are no cumulative voting rights, meaning that the holders of a majority of the shares voting for the election of directors can elect all the directors if they choose to do so. The Common Stock carries no preemptive rights and is not convertible, redeemable or assessable. The holders of Common Stock are entitled to dividends in such amounts and at such times as may be declared by the Board. See "Market and Dividend Information" for information regarding dividends. The Company currently expects to be able to pay regular quarterly dividends without restriction under its Credit Facilities. After the Offerings and assuming no exercise of the over-allotment options, the Selling Shareholder will hold 23,333,334 shares of the issued and outstanding Common Stock. Upon liquidation or dissolution, holders of Common Stock are entitled to share ratably in all net assets available for distribution to stockholders after payment of preferential amounts to holders of Preferred Stock, if any. All outstanding shares of Common Stock, including the shares to be sold by the Selling Shareholder, are duly authorized, validly issued, fully paid and nonassessable. 22 25 Miscellaneous. First Chicago Trust Company of New York is the transfer agent and the registrar for the Company's Common Stock. PREFERRED STOCK There are 2,000,000 authorized and unissued shares of Preferred Stock of the Company available for reissuance in the two series, Series B and Series C. At the 1995 Annual Meeting of Stockholders to be held May 10, 1995, the Company will seek approval to authorize the issuance of up to 15,000,000 shares of preferred stock, $.01 par value ("New Preferred Stock"), and to eliminate the provisions relating to the existing class of Preferred Stock. If approved by the shareholders at the 1995 Annual Meeting, the Board can authorize the issuance, at any time or from time to time, of one or more series of New Preferred Stock at its discretion. In addition, the Board would determine all designations, powers, preferences and the rights of such stock and any qualifications, limitations and restrictions, including but not limited to: (i) the designation of series and numbers of shares (up to 15,000,000 shares); (ii) the dividend rights, if any; (iii) the rights upon liquidation or distribution of the assets of the Company, if any; (iv) the conversion or exchange rights, if any; (v) the redemption provisions, if any; and (vi) the voting rights, if any; provided, that the holders of shares of New Preferred Stock will not be entitled to more than one vote per share, when voting as a class with the holders of shares of the Common Stock and if such New Preferred Stock is convertible into Common Stock, then holders can receive one vote on an as converted basis. SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW Section 203 of the Delaware General Corporation Law ("DGCL") prevents an "interested stockholder" (defined in Section 203, generally, as a person owning 15% or more of a corporation's outstanding voting stock), from engaging in a "business combination" (as defined in Section 203) with a publicly-held Delaware corporation for three years following the date such person became an interested stockholder unless (i) before such person became an interested stockholder, the board of directors of the corporation approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination; (ii) upon consummation of the transaction that resulted in the interested stockholder's becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding stock held by directors who are also officers of the corporation and by employee stock plans that do not provide participants with the rights to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or (iii) following the transaction in which such person became an interested stockholder, the business combination is approved by the board of directors of the corporation and authorized at a meeting of stockholders by the affirmative vote of the holders of two-thirds of the outstanding voting stock of the corporation not owned by the interested stockholder. The provisions of Section 203 may have the effect of delaying, deferring or preventing a change of control of the Company. The Selling Shareholder is not considered an interested stockholder of the Company for the purposes of Section 203 of the DGCL. DIRECTOR LIABILITY The Charter contains a provision that limits the liability of the Company's directors to the fullest extent permitted by the DGCL. The provision eliminates the personal liability of directors to the Company and its stockholders for monetary damages for breaches of their fiduciary duty of care. As a result, stockholders may be unable to recover monetary damages against directors for negligent or grossly negligent acts or omissions in violation of their duty of care. The provision does not change the liability of a director for breach of his duty of loyalty to the Company or to stockholders, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, the declaration or payment of dividends in violation of Delaware law or in respect of any transaction from which a director received an improper personal benefit. The Charter provides that if the DGCL is amended to further limit such liability, then the liability of Company directors will be limited or eliminated to the maximum extent permitted by law as so amended. 23 26 UNDERWRITING Subject to the terms and conditions of the U.S. Underwriting Agreement among the Selling Shareholder, the Company and Salomon Brothers Inc, CS First Boston Corporation, Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several U.S. Underwriters (the "U.S. Representatives"), the Selling Shareholder has agreed to sell to the entities named below (the "U.S. Underwriters") and each of such U.S. Underwriters has severally agreed to purchase from the Selling Shareholder, the respective number of shares of Common Stock set forth opposite its name below:
NUMBER OF U.S. UNDERWRITER SHARES --------- Salomon Brothers Inc.................................................... CS First Boston Corporation............................................. Goldman, Sachs & Co. ................................................... Merrill Lynch, Pierce, Fenner & Smith Incorporated............................................... --------- Total......................................................... 8,000,000 =========
The U.S. Underwriting Agreement provides that the several U.S. Underwriters will be obligated to purchase all the shares of Common Stock being offered in the U.S. Offering (other than those subject to the over-allotment option described below) if any are purchased. The U.S. Representatives have advised the Company and the Selling Shareholder that they propose to offer Common Stock directly to the public at the public offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession not in excess of $ per share. The U.S. Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share on sales to certain other dealers. After the initial Offering, the price to public and concessions to dealers may be changed. The Selling Shareholder has granted to the U.S. Underwriters and the underwriters of the International Offering (the "International Underwriters") options to purchase up to an additional 1,200,000 shares and 300,000 shares of Common Stock, respectively, at the initial offering price less the aggregate underwriting discounts. Either or both options may be exercised at any time up to 30 days after the date of this Prospectus. The Company and the Selling Shareholder have entered into an underwriting agreement (the "International Underwriting Agreement") with the International Underwriters providing for the concurrent offer and sale of 2,000,000 shares of Common Stock (in addition to the shares covered by the over-allotment option described above) in the International Offering outside the United States and Canada. The price to public and aggregate underwriting discount per share for the Offerings are identical. The closing of the U.S. Offering is a condition to the closing of the International Offering, and vice versa. The representatives of the International Underwriters are Salomon Brothers International Limited, CS First Boston Limited, Goldman Sachs International and Merrill Lynch International Limited. 24 27 For a period of 90 days after the date of this Prospectus, the KKR Partnerships have agreed not to offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or securities convertible into, exercisable for or exchangeable for Common Stock or any such other capital stock without the consent of the U.S. Representatives and the representatives of the International Underwriters. In addition, the Company has agreed not to offer, sell or contract to sell or otherwise dispose of any shares of Common Stock or any securities convertible into, exercisable for or exchangeable for shares of Common Stock, except for securities issued pursuant to the Company's stock option or other incentive benefit plans, for 90 days after the date of this Prospectus without the consent of the U.S. Representatives and the representatives of the International Underwriters. The U.S. Underwriters and the International Underwriters have entered into an Agreement Between U.S. Underwriters and International Underwriters pursuant to which each U.S. Underwriter has agreed that, as part of the distribution of the shares of Common Stock offered in the U.S. Offering and subject to certain exceptions, (a) it is not purchasing any such shares for the account of an International Person (as defined below), (b) it has not offered or sold, and will not offer, sell, resell or deliver, directly or indirectly, any shares of Common Stock or distribute any prospectus relating to the Common Stock to anyone other than a U.S. or Canadian Person (as defined below) and (c) any dealer to whom it may sell any of the shares of Common Stock will represent and agree that it will comply with the restrictions set forth in (a) and (b) and will not offer, sell, resell or deliver, directly or indirectly, any of the shares or distribute any prospectus relating to the Common Stock to any other dealer who does not so represent and agree. In addition, pursuant to the Agreement Between U.S. Underwriters and International Underwriters, each International Underwriter has agreed that, as part of the distribution of the shares of Common Stock offered in the International Offering and subject to certain exceptions, (1) it is not purchasing any such shares for the account of anyone other than an International Person, (2) it has not offered or sold, and will not offer, sell, resell or deliver, directly or indirectly, any shares of Common Stock or distribute any prospectus relating to the Common Stock to anyone other than an International Person and (3) any dealer to whom it may sell any of the shares of Common Stock will represent and agree that it will comply with the restrictions set forth in (1) and (2) and will not offer, sell, resell or deliver, directly or indirectly, any of the shares or distribute any prospectus relating to the Common Stock to any other dealer who does not so represent and agree. The foregoing limitations do not apply to stabilization transactions or to transactions among the U.S. Underwriters and the International Underwriters pursuant to the Agreement Between U.S. Underwriters and International Underwriters. As used herein, "United States" means the United States of America (including the District of Columbia) and its territories, possessions and other areas subject to its jurisdiction, "Canada" means Canada, its provinces, territories, possessions and other areas subject to its jurisdiction and "U.S. or Canadian Person" means a citizen or resident of the United States or Canada, a corporation, partnership or other entity created or organized in or under the laws of the United States or Canada or any political subdivision thereof, or any estate or trust the income of which is subject to United States or Canadian income taxation regardless of its source (other than a foreign branch of such entity), and includes any United States or Canadian branch of a person other than a U.S. or Canadian Person. As used herein, the term "International Person" means any person, corporation, partnership or other entity that is not a U.S. or Canadian Person. Pursuant to the Agreement Between U.S. Underwriters and International Underwriters, sales may be made between the International Underwriters and the U.S. Underwriters of such number of shares of Common Stock as may be mutually agreed. The price of any shares so sold shall be the initial price to public, less an amount not greater than the selling concession. To the extent that these are sales between the U.S. Underwriters and the International Underwriters pursuant to the Agreement Between U.S. Underwriters and International Underwriters, the number of shares initially available for sale by the International Underwriters or by the U.S. Underwriters may be more or less than the amount specified on the cover page of this Prospectus. The Company and each U.S. Underwriter and International Underwriter (a) have not offered or sold, and will not offer or sell, in the United Kingdom, by means of any document, any shares of Common Stock 25 28 other than to persons whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent (except under circumstances which do not constitute an offer to the public within the meaning of the Companies Act of 1985), (b) have complied and will comply with all applicable provisions of the Financial Services Act of 1986 (the "1986 Act") with respect to anything done by them in relation to the shares of Common Stock in, from or otherwise involving the United Kingdom and (c) have only issued or passed on, and will only issue or pass on to any person in the United Kingdom, any investment advertisement (within the meaning of the 1986 Act) relating to the shares of Common Stock if that person falls within Article 9(3) of the 1986 Act (Investment Advertisements) (Exemptions) Order 1988. The shares of Common Stock may not be offered or sold directly or indirectly in Hong Kong by means of this document or any other offering material or document other than to persons whose ordinary business it is to buy or sell shares or debentures, whether as principal or as agent. Unless permitted to do so by the securities laws of Hong Kong, no person may issue or cause to be issued in Hong Kong this document or any amendment or supplement thereto or any other information, advertisement or document relating to the shares of Common Stock other than with respect to shares of Common Stock intended to be disposed of to persons outside Hong Kong or to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or as agent. The shares of Common Stock have not been registered under the Securities and Exchange Law of Japan and are not being offered and may not be offered or sold directly or indirectly in Japan or to residents of Japan, except pursuant to applicable Japanese laws and regulations. No action has been taken or will be taken in any jurisdiction by the Company or the International Underwriters or U.S. Underwriters that would permit a public offering of the shares offered hereby in any jurisdiction where action for that purpose is required, other than the United States. Persons into whose possession this Prospectus comes are required by the Company and the International Underwriters and U.S. Underwriters to inform themselves about and to observe any restrictions as to the offering of the shares offered hereby and the distribution of this Prospectus. Purchasers of the shares of Common Stock offered hereby may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase in addition to the offering price set forth on the cover page hereof. The Company and the Selling Shareholder have agreed to indemnify the U.S. Underwriters and the U.S. Underwriters have agreed to indemnify the Company and the Selling Shareholder against certain liabilities, including liabilities under the Securities Act of 1933, as amended, and to contribute to payments required to be made in respect thereof. Each of Salomon Brothers Inc, CS First Boston Corporation, Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, and certain of their international affiliates, from time to time provides investment banking and other related services to the Company, the Selling Shareholder and their respective affiliates in the ordinary course of their respective businesses. 26 29 VALIDITY OF COMMON STOCK The validity of the shares of Common Stock offered in the Offerings will be passed upon for the Company by Newton W. Wilson, III, Esq., General Counsel of the Company. As of the date of this Prospectus, Mr. Wilson owned approximately 6,400 shares of Common Stock of the Company (excludes shares held indirectly by Mr. Wilson in the Company's Savings Plan for Salaried Employees) and owned directly options to purchase 157,653 shares of Common Stock (includes options to purchase Common Stock which are not yet vested). The validity of the Shares will also be passed upon for the Company by Andrews & Kurth L.L.P., New York, New York. Certain legal matters in connection with the Offerings will be passed upon for the KKR Partnerships, as Selling Shareholder, by Latham & Watkins, Los Angeles, California and for the Underwriters by Simpson Thacher & Bartlett (a partnership which includes professional corporations), New York, New York. Certain partners of Latham & Watkins, members of their families, related persons and others have an indirect interest, through limited partnerships, in less than 1% of the Common Stock. Such persons do not have the power to vote or dispose of such shares. EXPERTS The financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K of Union Texas Petroleum Holdings, Inc. for the year ended December 31, 1994, have been so incorporated in reliance on the report of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. 27 30 NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDER OR ANY OF THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION. --------------------- TABLE OF CONTENTS
PAGE ---- Available Information.................. 2 Incorporation of Certain Documents by Reference............................ 2 Prospectus Summary..................... 3 Use of Proceeds........................ 8 Selling Shareholder and Principal Shareholder.......................... 8 Market and Dividend Information........ 10 Capitalization......................... 11 Selected Consolidated Financial Data... 12 Management's Discussion and Analysis of Financial Condition and Results of Operations........................... 14 Management Developments................ 22 Description of Capital Stock........... 22 Underwriting........................... 24 Validity of Common Stock............... 27 Experts................................ 27
10,000,000 SHARES UNION TEXAS PETROLEUM HOLDINGS, INC. COMMON STOCK ($.05 PAR VALUE) (LOGO) SALOMON BROTHERS INC CS FIRST BOSTON GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. PROSPECTUS DATED MAY , 1995 31 Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. [ALTERNATIVE INTERNATIONAL PAGE] PROSPECTUS SUBJECT TO COMPLETION [LOGO] APRIL 21, 1995 10,000,000 SHARES UNION TEXAS PETROLEUM HOLDINGS, INC. COMMON STOCK ($.05 PAR VALUE) The shares of Common Stock, $.05 par value per share (the "Common Stock"), of Union Texas Petroleum Holdings, Inc. (the "Company") offered hereby (the "Shares") are being sold by the Selling Shareholder. See "Selling Shareholder and Principal Shareholder." The Company will not receive any of the proceeds from the sale of the Shares offered hereby. Upon completion of the Offerings (as defined below), the Selling Shareholder will hold approximately 27% (or 25% if the Underwriters exercise their over-allotment options in full) of the Company's outstanding Common Stock. Of the Shares being offered, 2,000,000 shares are being offered hereby in an international offering outside the United States and Canada (the "International Offering") and 8,000,000 shares are being offered in a concurrent offering in the United States and Canada (the "U.S. Offering" and collectively with the International Offering, the "Offerings"), subject to transfers between the International Underwriters and the U.S. Underwriters. The Price to Public and Underwriting Discount per Share will be identical for the International Offering and the U.S. Offering. See "Underwriting." The closing of the International Offering and the U.S. Offering are conditioned upon each other. The Common Stock is listed on The New York Stock Exchange under the symbol "UTH." On April 20, 1995 the last reported sale price of the Common Stock on the New York Stock Exchange Composite Transactions Tape was $23 3/8 per share. See "Market and Dividend Information." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ----------------------------------------------------------------------------------------------- PROCEEDS TO PRICE TO UNDERWRITING SELLING PUBLIC DISCOUNT SHAREHOLDER(1) Per Share........................... $ $ $ Total(2)............................ $ $ $ - -----------------------------------------------------------------------------------------------
(1) Estimated expenses of $700,000 will be payable by the Company pursuant to its obligations under a registration agreement with the Selling Shareholder. See "Selling Shareholder and Principal Shareholder." (2) The Selling Shareholder has granted to the International Underwriters and the U.S. Underwriters 30-day options to purchase up to an aggregate of 1,500,000 shares of Common Stock at the Price to Public, less Underwriting Discount, solely to cover over-allotments, if any. If the Underwriters exercise such options in full, the total Price to Public, Underwriting Discount and Proceeds to Selling Shareholder will be $ , $ and $ , respectively. See "Underwriting." The Shares are offered subject to receipt and acceptance by the Underwriters, to prior sale and to the Underwriters' right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that delivery of the Shares will be made at the office of Salomon Brothers International Limited, Seven World Trade Center, New York, New York, or through the facilities of The Depository Trust Company, on or about May , 1995. SALOMON BROTHERS INTERNATIONAL LIMITED CS FIRST BOSTON GOLDMAN SACHS INTERNATIONAL MERRILL LYNCH INTERNATIONAL LIMITED The date of this Prospectus is May , 1995. 32 [ALTERNATIVE INTERNATIONAL PAGE] CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-U.S. HOLDERS The following is a general discussion of certain United States federal income and estate tax consequences of the ownership and disposition of shares of Common Stock by a Non-U.S. Holder. The term "Non-U.S. Holder" means (a) a foreign corporation, (b) a foreign partnership, (c) a nonresident alien individual or (d) a foreign estate or trust (that is, a trust or estate not subject to United States federal income tax on income from sources without the United States that is not effectively connected with the conduct of a trade or business within the United States). An individual may, subject to certain exceptions, be deemed to be a resident alien (as opposed to a nonresident alien) with respect to a calendar year by virtue of being present in the United States on at least 31 days in that calendar year and for an aggregate of at least 183 days during a three-year period ending in that calendar year (counting for such purposes all of the days present in that year, one-third of the days present in the immediately preceding year, and one-sixth of the days present in the second preceding year). Resident aliens are subject to United States federal tax as if they were United States citizens. This discussion does not describe all aspects of United States federal income and estate taxation that may be relevant to a Non-U.S. Holder's particular circumstances or to certain types of Non-U.S. Holders that may be subject to special treatment under United States federal income tax laws (for example, insurance companies, tax-exempt organizations, financial institutions or broker-dealers). Moreover, this discussion does not address non-U.S., state and local tax consequences. Furthermore, this discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations promulgated thereunder and administrative and judicial interpretations as of the date of this Prospectus, all of which are subject to change. Any revisions of these authorities could be made retroactive with respect to transactions consummated prior to the time such changes are announced or enacted. NON-U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE SPECIFIC UNITED STATES AND OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SHARES OF COMMON STOCK. DIVIDENDS A dividend paid to a Non-U.S. Holder of Common Stock will be subject to United States withholding tax at a rate of 30% of the gross amount of the dividend (or at such lower rate as may be provided by an applicable income tax treaty), unless the dividend is effectively connected with the conduct of a trade or business in the United States by the Non-U.S. Holder. If a dividend is effectively connected with a United States trade or business of a Non-U.S. Holder (or, if a tax treaty applies, is attributable to or effectively connected with a U.S. permanent establishment of the Non-U.S. Holder) who has properly filed a Form 4224 (or similar statement) with the withholding agent with respect to the taxable year in which the dividend is paid, no withholding will be required. However, that dividend will be subject to the regular United States federal income tax on a net income basis at applicable graduated individual or corporate rates, which is not collected by withholding. A substantial portion of such dividends otherwise subject to withholding may be exempt from withholding, however, under the provisions of the Code relating to a U.S. corporation that derives 80% or more of its gross income from a foreign active trade or business for the prior three taxable years. Further, under certain circumstances, corporate Non-U.S. Holders may be subject to an additional "branch profits tax" at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. Although proposed regulations could alter this position if they become effective, currently the Internal Revenue Service's position is that a dividend paid to an address in a foreign country is generally presumed to be paid to a resident of the foreign country for purposes of determining the applicability of the United States withholding tax discussed above (either at the statutory rate of 30% or at any lower rate established by treaty) unless the payor has knowledge to the contrary. Under the proposed regulations, however, a Non-U.S. Holder of Common Stock who wishes to claim the benefit of an applicable treaty rate would be required to file Form 1001 (Ownership, Exemption of Reduced Rate Certificate) and, subject to a de minimis exception, Form 8306 (Certificate of Residence) (a form not yet printed by the Internal Revenue Service) with the withholding agent. Such forms would be required 24 33 [ALTERNATIVE INTERNATIONAL PAGE] to contain the name and address of the Non-U.S. Holder and other pertinent information, to be certified by the Non-U.S. Holder under penalties of perjury, and, in the case of Form 8306, to include an official statement by the competent authority in the foreign country that the Non-U.S. Holder is a resident thereof for purposes of its tax laws. A Non-U.S. Holder of Common Stock eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty may obtain a refund as to any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service. GAIN ON DISPOSITION In general, a Non-U.S. Holder will not be subject to the United States federal withholding tax in respect of gain realized on a disposition of shares of Common Stock. In addition, except as described below, regular United States federal income tax will not apply to gain realized on the disposition of shares of Common Stock, provided that (i) the gain is not effectively connected with the conduct of a trade or business of the Non-U.S. Holder in the United States (or, if any of certain tax treaties applies, is not attributable to or effectively connected with a United States permanent establishment of the Non-U.S. Holder within the meaning of the applicable treaty), (ii) in the case of a Non-U.S. Holder who is an individual (a) if such individual holds the Common Stock as a capital asset, either he, (1) is not present in the United States for 183 or more days in the taxable year of the disposition (as calculated under certain provisions of the Code) or (2) if so present in the United States, such individual's "tax home" for United States federal income tax purposes is not in the United States and the gain is not attributable to an office or other fixed place of business maintained in the United States by such individual, (b) such individual is not subject to tax pursuant to the Code provisions applicable to certain expatriates and (c) such individual has not elected to be treated as a resident of the United States for federal income tax purposes and (iii) at the time of disposition the Company is not and has not for the shorter of the holder's holding period and the preceding five-year period been a "United States real property holding corporation" for federal income tax purposes or, if the Company is or was a "United States real property holding corporation" whose Common Stock is or was during the calendar year of disposition regularly traded on an established securities market, the Non-U.S. Holder has not held, directly or indirectly, at any time during the shorter of the holder's holding period and the five-year period ending on the date of disposition, more than 5% of the shares of Common Stock. The Company believes that it is not and has not been nor does the Company presently expect to become a "United States real property holding corporation." A partner in a partnership or a beneficiary of a trust or estate may be subject to United States federal income tax on gain realized on the disposition of shares of Common Stock by the partnership, trust or estate (even though that entity may not be subject to tax) if (i) the partner or beneficiary is subject to United States federal income tax because of its own status, such as a United States resident or a foreign person engaged in a trade or business in the United States whose gain is effectively connected with that trade or business or (ii) the partner or beneficiary is a nonresident alien individual or foreign corporation and the gain of the partnership, estate or trust disposing of the shares of Common Stock is effectively connected with the conduct of a trade or business within the United States by such partnership, estate or trust. FEDERAL ESTATE TAXES Shares of Common Stock owned, or treated as owned, by an individual who is a Non-U.S. Holder at the time of death will be subject to United States federal estate taxes, unless an applicable estate tax treaty provides otherwise. UNITED STATES INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING The Company must report annually to the Internal Revenue Service the amount of dividends paid to, and the tax withheld with respect to, a Non-U.S. Holder. These information reporting requirements apply even if withholding was not required because the dividends were effectively connected with a trade or 25 34 [ALTERNATIVE INTERNATIONAL PAGE] business in the United States of the Non-U.S. Holder or withholding was reduced by an applicable tax treaty. Copies of these information returns may also be made available, under the provisions of a specific treaty or agreement, to the tax authorities in the country in which the Non-U.S. Holder resides. United States backup withholding tax, which generally is a withholding tax imposed at a rate of 31% on certain payments to persons that fail to furnish the information required under the United States information reporting requirements, will generally not apply to dividends paid on shares of Common Stock to a Non-U.S. Holder at an address outside the United States, under temporary Treasury regulations, unless the payor has knowledge that the payee is a U.S. person. In general, the payment of the proceeds of the disposition of shares of Common Stock to or through a non-U.S. office of a non-U.S. broker will not generally be subject to information reporting or backup withholding. Information reporting requirements will apply, but backup withholding will not apply, to payments made outside the United States to or through a foreign office of a broker that is a United States person, a United States controlled foreign corporation or a foreign person 50% or more of whose gross income (over a three-year period) is effectively connected with the conduct of a United States trade or business unless such broker has documentary evidence in its records of the owner's non-U.S. status, certain other conditions are met and such broker has no actual knowledge to the contrary or unless the owner otherwise establishes an exemption. Temporary Treasury regulations provide that the Treasury is considering whether backup withholding will apply with respect to such payments that are not currently subject to backup withholding under the current regulations. Under proposed Treasury regulations not currently in effect, backup withholding will not apply to such payments absent actual knowledge that the payee is a U.S. person. The payment of proceeds of the disposition of shares of Common Stock by a broker to or through a U.S. office is subject to both possible backup withholding and information reporting requirements unless the holder certifies his non-U.S. status under penalties of perjury, or otherwise establishes an applicable exception. REFUNDS Any amounts withheld under the backup withholding rules from a payment to a Non-U.S. Holder will be refunded or credited against the Non-U.S. Holder's United States federal income tax liability, if any, provided that a proper claim for refund is made or the required information is furnished to the Internal Revenue Service. 26 35 [ALTERNATIVE INTERNATIONAL PAGE] UNDERWRITING Subject to the terms and conditions set forth in the International Underwriting Agreement among the Selling Shareholder, the Company and Salomon Brothers International Limited, CS First Boston Limited, Goldman Sachs International and Merrill Lynch International Limited as representatives of the several International Underwriters (the "International Representatives"), the Selling Shareholder has agreed to sell to the entities named below (the "International Underwriters"), and each of the International Underwriters has severally agreed to purchase from the Selling Shareholder, the respective number of shares of Common Stock set forth opposite its name below:
NUMBER OF INTERNATIONAL UNDERWRITER SHARES ------------------------------------------------------------------------- --------- Salomon Brothers International Limited................................... CS First Boston Limited.................................................. Goldman Sachs International.............................................. Merrill Lynch International Limited...................................... --------- Total............................................................. 2,000,000 =========
The International Underwriting Agreement provides that the several International Underwriters will be obligated to purchase all of the shares of Common Stock being offered in the International Offering (other than those subject to the over-allotment option described below), if any are purchased. The International Representatives have advised the Company that they propose to offer the Common Stock directly to the public at the public offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession not in excess of $ per share. The International Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share on sales to certain other dealers. After the initial Offering, the price to public and concessions to dealers may be changed. The Selling Shareholder has granted to the International Underwriters and the underwriters of the U.S. Offering (the "U.S. Underwriters") options to purchase up to an additional 300,000 shares and 1,200,000 shares of Common Stock, respectively, at the initial offering price less the aggregate underwriting discounts. Either or both options may be exercised at any time up to 30 days after the date 27 36 [ALTERNATIVE INTERNATIONAL PAGE] of this Prospectus. The Company and the Selling Shareholder have entered into a U.S. Underwriting Agreement with the U.S. Underwriters providing for the concurrent offer and sale of 8,000,000 shares of Common Stock (in addition to the shares covered by the over-allotment option described above) in the United States and Canada. The price to public and aggregate underwriting discount per share for the International Offering and U.S. Offering are identical. The closing of the International Offering is a condition to the closing of the U.S. Offering, and vice versa. The representatives of the U.S. Underwriters are Salomon Brothers Inc, CS First Boston Corporation, Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. For a period of 90 days after the date of this Prospectus, the KKR Partnerships have agreed not to offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or securities convertible into, exercisable for or exchangeable for Common Stock or any such other capital stock without the consent of the representatives of the International Underwriters and the U.S. Representatives. In addition, the Company has agreed not to offer, sell or contract to sell or otherwise dispose of any shares of Common Stock or any securities convertible into, exercisable for or exchangeable for shares of Common Stock, except for securities issued pursuant to the Company's stock option or other incentive benefit plans, for 90 days after the date of this Prospectus without the consent of the representatives of the International Underwriters and the U.S. Representatives. The International Underwriters and the U.S. Underwriters have entered into an Agreement Between U.S. Underwriters and International Underwriters pursuant to which each U.S. Underwriter has agreed that, as part of the distribution of the shares of Common Stock offered in the U.S. Offering and subject to certain exceptions, (a) it is not purchasing any such shares for the account of an International Person (as defined below), (b) it has not offered or sold, and will not offer, sell, resell or deliver, directly or indirectly, any shares of Common Stock or distribute any prospectus relating to the Common Stock to anyone other than a U.S. or Canadian Person (as defined below) and (c) any dealer to whom it may sell any of the shares of Common Stock will represent and agree that it will comply with the restrictions set forth in (a) and (b) and will not offer, sell, resell or deliver, directly or indirectly, any of the shares or distribute any prospectus relating to the Common Stock to any other dealer who does not so represent and agree. In addition, pursuant to the Agreement Between U.S. Underwriters and International Underwriters, each International Underwriter has agreed that, as part of the distribution of the shares of Common Stock offered in the International Offering and subject to certain exceptions, (1) it is not purchasing any such shares for the account of anyone other than an International Person, (2) it has not offered or sold, and will not offer, sell, resell or deliver, directly or indirectly, any shares of Common Stock or distribute any prospectus relating to the Common Stock to anyone other than an International Person and (3) any dealer to whom it may sell any of the shares of Common Stock will represent and agree that it will comply with the restrictions set forth in (1) and (2) and will not offer, sell, resell or deliver, directly or indirectly, any of the shares or distribute any prospectus relating to the Common Stock to any other dealer who does not so represent and agree. The foregoing limitations do not apply to stabilization transactions or to transactions among the International Underwriters and the U.S. Underwriters pursuant to the Agreement Between U.S. Underwriters and International Underwriters. As used herein, "United States" means the United States of America (including the District of Columbia) and its territories, possessions and other areas subject to its jurisdiction, "Canada" means Canada, its provinces, territories, possessions and other areas subject to its jurisdiction and "U.S. or Canadian Person" means a citizen or resident of the United States or Canada, a corporation, partnership or other entity created or organized in or under the laws of the United States or Canada or any political subdivision thereof, or any estate or trust the income of which is subject to United States or Canadian income taxation regardless of its source (other than a foreign branch of such entity), and includes any United States or Canadian branch of a person other than a U.S. or Canadian Person. As used herein, the term "International Person" means any person, corporation, partnership or other entity that is not a U.S. or Canadian Person. Pursuant to the Agreement Between U.S. Underwriters and International Underwriters, sales may be made between the International Underwriters and the U.S. Underwriters of such number of shares of 28 37 [ALTERNATIVE INTERNATIONAL PAGE] Common Stock as may be mutually agreed. The price of any shares so sold shall be the initial price to public, less an amount not greater than the selling concession. To the extent that these are sales between the International Underwriters and the U.S. Underwriters pursuant to the Agreement Between U.S. Underwriters and International Underwriters, the number of shares initially available for sale by the International Underwriters or by the U.S. Underwriters may be more or less than the amount specified on the cover page of this Prospectus. The Company and each International Underwriter and U.S. Underwriter (a) have not offered or sold, and will not offer or sell, in the United Kingdom, by means of any document, any shares of Common Stock other than to persons whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent (except under circumstances which do not constitute an offer to the public within the meaning of the Companies Act of 1985), (b) have complied and will comply with all applicable provisions of the Financial Services Act of 1986 (the "1986 Act") with respect to anything done by them in relation to the shares of Common Stock in, from or otherwise involving the United Kingdom and (c) have only issued or passed on, and will only issue or pass on to any person in the United Kingdom, any investment advertisement (within the meaning of the 1986 Act) relating to the shares of Common Stock if that person falls within Article 9(3) of the 1986 Act (Investment Advertisements) (Exemptions) Order 1988. The shares of Common Stock may not be offered or sold directly or indirectly in Hong Kong by means of this document or any other offering material or document other than to persons whose ordinary business it is to buy or sell shares or debentures, whether as principal or as agent. Unless permitted to do so by the securities laws of Hong Kong, no person may issue or cause to be issued in Hong Kong this document or any amendment or supplement thereto or any other information, advertisement or document relating to the shares of Common Stock other than with respect to shares of Common Stock intended to be disposed of to persons outside Hong Kong or to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or as agent. The shares of Common Stock have not been registered under the Securities and Exchange Law of Japan and are not being offered and may not be offered or sold directly or indirectly in Japan or to residents of Japan, except pursuant to applicable Japanese laws and regulations. No action has been taken or will be taken in any jurisdiction by the Company or the International Underwriters or U.S. Underwriters that would permit a public offering of the shares offered hereby in any jurisdiction where action for that purpose is required, other than the United States. Persons into whose possession this Prospectus comes are required by the Company and the International Underwriters and U.S. Underwriters to inform themselves about and to observe any restrictions as to the offering of the shares offered hereby and the distribution of this Prospectus. Purchasers of the shares of Common Stock offered hereby may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase in addition to the offering price set forth on the cover page hereof. The Company and the Selling Shareholder have agreed to indemnify the International Underwriters and the International Underwriters have agreed to indemnify the Company and the Selling Shareholder against certain liabilities, including liabilities under the Securities Act of 1933, as amended, and to contribute payments required to be made in respect thereof. Each of Salomon Brothers Inc, CS First Boston Corporation, Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, and certain of their international affiliates, from time to time provides investment banking and other related services to the Company, the Selling Shareholder and their respective affiliates in the ordinary course of their respective businesses. 29 38 [ALTERNATIVE INTERNATIONAL PAGE] VALIDITY OF COMMON STOCK The validity of the shares of Common Stock offered in the Offerings will be passed upon for the Company by Newton W. Wilson, III, Esq., General Counsel of the Company. As of the date of this Prospectus, Mr. Wilson owned approximately 6,400 shares of Common Stock of the Company (excludes shares held indirectly by Mr. Wilson in the Company's Savings Plan for Salaried Employees) and owned directly options to purchase 157,653 shares of Common Stock (includes options to purchase Common Stock which are not yet vested). The validity of the Shares will also be passed upon for the Company by Andrews & Kurth L.L.P., New York, New York. Certain legal matters in connection with the Offerings will be passed upon for the KKR Partnerships, as Selling Shareholder, by Latham & Watkins, Los Angeles, California and for the Underwriters by Simpson Thacher & Bartlett (a partnership which includes professional corporations), New York, New York. Certain partners of Latham & Watkins, members of their families, related persons and others have an indirect interest, through limited partnerships, in less than 1% of the Common Stock. Such persons do not have the power to vote or dispose of such shares. EXPERTS The financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K of Union Texas Petroleum Holdings, Inc. for the year ended December 31, 1994, have been so incorporated in reliance on the report of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. 30 39 [ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS] NO DEALER, SALES PERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDER OR ANY OF THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION. ------------------------ TABLE OF CONTENTS
PAGE --- Available Information.................. 2 Incorporation of Certain Documents by Reference............................ 2 Prospectus Summary..................... 3 Use of Proceeds........................ 8 Selling Shareholder and Principal Shareholder.......................... 8 Market and Dividend Information........ 10 Capitalization......................... 11 Selected Consolidated Financial Data... 12 Management's Discussion and Analysis of Financial Condition and Results of Operations........................... 14 Management Developments................ 22 Description of Capital Stock........... 22 Certain United States Tax Consequences to Non-U.S. Holders.................. 24 Underwriting........................... 27 Validity of Common Stock............... 30 Experts................................ 30
10,000,000 SHARES UNION TEXAS PETROLEUM HOLDINGS, INC. COMMON STOCK ($.05 PAR VALUE) (LOGO) SALOMON BROTHERS INTERNATIONAL LIMITED CS FIRST BOSTON GOLDMAN SACHS INTERNATIONAL MERRILL LYNCH INTERNATIONAL LIMITED PROSPECTUS DATED MAY , 1995 40 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION An itemized statement of the estimated amount of all expenses in connection with the distribution of the securities registered hereby, all of which will be paid by the Company, is as follows: Registration fee......................................................... $ 91,208 Blue Sky fees and expenses............................................... 15,000 Printing and engraving expenses.......................................... 200,000 Legal fees and expenses.................................................. 250,000 Accounting fees and expenses............................................. 60,000 Miscellaneous fees and expenses.......................................... 83,792 --------- Total............................................................. $ 700,000 =========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 145 of the Delaware General Corporation Law ("DGCL"), inter alia, 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 (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Similar indemnity is authorized for such persons against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of any such threatened, pending or completed action or suit if 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 provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors or by independent legal counsel in a written opinion that indemnification is proper because the indemnitee has met the applicable standard of conduct. Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145. The Company maintains policies insuring its and its subsidiaries' officers and directors against certain liabilities for actions taken in such capacities, including liabilities under the Securities Act. Article VI of the Bylaws of the Company provides for indemnification of the directors and officers of the Company to the full extent permitted by law, as now in effect or later amended. In addition, the Bylaws provide for indemnification against expenses incurred by a director or officer to be paid by the Company at reasonable intervals in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall be ultimately determined that he is not entitled to be indemnified by the Company. The Bylaws further provide for a contractual cause of action on the part of directors and officers of the Company for indemnification claims which have not been paid by the Company. II-1 41 The Company also has provided liability insurance for each director and officer for certain losses arising from claims or charges made against them while acting in their capacities as directors or officers of the Company. Article VIII of the Company's Restated Certificate of Incorporation limits under certain circumstances the liability of the Company's directors for a breach of their fiduciary duty as directors. These provisions do not eliminate the liability of a director (i) for a breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (relating to the declaration of dividends and purchase or redemption of shares in violation of the DGCL) or (iv) for any transaction from which the director derived an improper personal benefit. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Exhibits 1.1 -- Form of U.S. Underwriting Agreement. 1.2 -- Form of International Underwriting Agreement. 3.1 -- Restated Certificate of Incorporation of Union Texas Petroleum Holdings, Inc. (Filed under the identical exhibit number in Post-Effective Amendment No. 1 to the Company's Registration Statement No. 33-12800 and incorporated herein by reference). 3.2 -- Bylaws of the Company, as amended (Filed as Exhibit 3.2 to the Company's 10-Q for quarter ending June 30, 1994 (Commission File No. 1-9019) and incorporated herein by reference). 5.1 -- Opinion of legal counsel regarding legality of securities being registered. 10.1 -- Amended and Restated Registration Rights Agreement, dated September 30, 1987, among the Company and Certain Holders of Certain Securities of the Company (Filed as Exhibit 10.117 to Post-Effective Amendment No. 1 to the Company's Registration Statement No. 33-12800 and incorporated herein by reference). 10.2 -- Consulting Agreement, dated as of November 18, 1992, between the Company and the KKR Partnerships (Filed as Exhibit 10.81 to the Company's Form 10-K for the year ended December 31, 1992 (Commission File No. 1-9019), and incorporated herein by reference). 23.1 -- Consent of Price Waterhouse LLP. 23.2 -- Consent of legal counsel included in Exhibit 5.1. 24.1 -- Power of Attorney included in Part II of the Registration Statement.
ITEM 17. UNDERTAKINGS The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) 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. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. II-2 42 (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 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 provisions in Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final adjudication of such issue. II-3 43 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY OF HOUSTON, STATE OF TEXAS, ON APRIL 20, 1995. UNION TEXAS PETROLEUM HOLDINGS, INC. By: A. CLARK JOHNSON A. Clark Johnson Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY We, the undersigned, directors and officers of Union Texas Petroleum Holdings, Inc. (the "Company"), do hereby severally constitute and appoint A. Clark Johnson, Newton W. Wilson, III and Larry D. Kalmbach and each or any of them, our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments or post-effective amendments to this Registration Statement, and to file the same with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys and agents, and each or any of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or his substitution or substitutes, may lawfully do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE - --------------------------------------------- ---------------------------- --------------- /s/ A. CLARK JOHNSON Chairman of the Board and (A. Clark Johnson) Chief Executive Officer (Principal Executive Officer) April 20, 1995 /s/ LARRY D. KALMBACH Vice President and Chief (Larry D. Kalmbach) Financial Officer (Principal Financial Officer) April 20, 1995 /s/ DONALD M. McMULLAN Vice President and (Donald M. McMullan) Controller (Principal Accounting Officer) April 20, 1995 ------------------------- Director (Glenn A. Cox) , 1995 /s/ SAUL A. FOX Director (Saul A. Fox) April 20, 1995 /s/ EDWARD A. GILHULY Director (Edward A. Gilhuly) April 20, 1995 /s/ JAMES H. GREENE, JR. Director (James H. Greene, Jr.) April 20, 1995 /s/ HENRY R. KRAVIS Director (Henry R. Kravis) April 20, 1995 /s/ MICHAEL W. MICHELSON Director (Michael W. Michelson) April 20, 1995 ------------------------- Director (Stanley P. Porter) , 1995 /s/ GEORGE R. ROBERTS Director (George R. Roberts) April 20, 1995 ------------------------- Director (Richard R. Shinn) , 1995 ------------------------- Director (Sellers Stough) , 1995
II-4 44 INDEX TO EXHIBITS 1.1 -- Form of U.S. Underwriting Agreement. 1.2 -- Form of International Underwriting Agreement. 3.1 -- Restated Certificate of Incorporation of Union Texas Petroleum Holdings, Inc. (Filed under the identical exhibit number in Post-Effective Amendment No. 1 to the Company's Registration Statement No. 33-12800 and incorporated herein by reference). 3.2 -- Bylaws of the Company, as amended (Filed as Exhibit 3.2 to the Company's 10-Q for quarter ending June 30, 1994 (Commission File No. 1-9019) and incorporated herein by reference). 5.1 -- Opinion of legal counsel regarding legality of securities being registered. 10.1 -- Amended and Restated Registration Rights Agreement, dated September 30, 1987, among the Company and Certain Holders of Certain Securities of the Company (Filed as Exhibit 10.117 to Post-Effective Amendment No. 1 to the Company's Registration Statement No. 33-12800 and incorporated herein by reference). 10.2 -- Consulting Agreement, dated as of November 18, 1992, between the Company and the KKR Partnerships (Filed as Exhibit 10.81 to the Company's Form 10-K for the year ended December 31, 1992 (Commission File No. 1-9019), and incorporated herein by reference). 23.1 -- Consent of Price Waterhouse LLP. 23.2 -- Consent of legal counsel included in Exhibit 5.1. 24.1 -- Power of Attorney included in Part II of the Registration Statement.
EX-1.1 2 U.S. UNDERWRITING AGREEMENT 1 EXHIBIT 1.1 Union Texas Petroleum Holdings, Inc. Common Stock (par value $.05 per share) Underwriting Agreement (U.S. Version) ________ __, 199_ SALOMON BROTHERS INC CS FIRST BOSTON CORPORATION GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED As representatives of the several Underwriters named in Schedule I hereto c/o SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 Dear Sirs: Petroleum Associates, L.P. and KKR Partners II, L.P. (together, the "Selling Stockholders"), propose, subject to the terms and conditions stated herein, to sell to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of 8,000,000 shares (the "Firm Shares") and, at the election of the Underwriters, up to 1,200,000 additional shares (the "Optional Shares") of Common Stock, par value $.05 per share (the "Stock"), of Union Texas Petroleum Holdings, Inc., a Delaware corporation (the "Company"). The Firm Shares and the Optional Shares which the Underwriters elect to purchase pursuant to Section 2 hereof are collectively referred to herein as the "Shares". It is understood and agreed to by all parties that the Company and the Selling Stockholders are concurrently entering into an agreement (the "International Underwriting Agreement") providing for the sale by the Selling Stockholders of up to a total of 2,300,000 shares of Stock (the "International Shares"), including the over-allotment option thereunder, through arrangements with certain underwriters outside the United States (the "International Underwriters"), for whom Salomon Brothers International Limited, CS First Boston Limited, Goldman Sachs International and Merrill Lynch International Limited are acting as representatives. Anything herein or therein to the contrary notwithstanding, the respective closings under this Agreement and the International Underwriting Agreement are hereby expressly made conditional on one another. The Underwriters hereunder and the International Underwriters are simultaneously entering into an Agreement between U.S. and International Underwriting Syndicates (the "Agreement between Syndicates") which provides, among other things, for the transfer of shares of Stock between the two syndicates. Two forms of prospectus are to be used in connection with the offering and sale of shares of Stock contemplated by the foregoing, one relating to the Shares hereunder and the other relating to the International Shares. The latter form of prospectus will be identical 2 to the former except for certain substitute pages as included in the registration statement and amendments thereto as mentioned below. Except as used in Sections 2, 3, 4, 9 and 11 herein, and except as the context may otherwise require, references hereinafter to the Shares shall include all the shares of Stock which may be sold pursuant to either this Agreement or the International Underwriting Agreement, and references herein to any prospectus whether in preliminary or final form, and whether as amended or supplemented, shall include both the U.S. and the international versions thereof. 1. (a) The Company represents and warrants to, and agrees with, each of the Underwriters that: (i) A registration statement in respect of the Shares has been filed with the Securities and Exchange Commission (the "Commission"); such registration statement and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, to you for each of the other Underwriters, have been declared effective by the Commission in such form; no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed with the Commission; and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act"), being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto and including (i) the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the registration statement at the time it was declared effective and (ii) the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, being hereinafter called the "Registration Statement"; the final prospectus, in the form first filed with the Commission pursuant to Rule 424(b) under the Act, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus being deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus being deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement); (ii) No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the published rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through you expressly for use therein or by either Selling Stockholder expressly for use in the preparation of the answers therein to Item 7 of Form S-3; 2 3 (iii) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the published rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the published rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through you expressly for use therein or by either Selling Stockholder expressly for use in the preparation of the answers therein to Item 7 of Form S-3; (v) None of the Company or any of its subsidiaries or, to the best of the Company's knowledge, Unimar Company, a Texas general partnership ("Unimar"), has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, which loss or interference is material to the Company and its subsidiaries taken as a whole; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock (other than (i) any shares of capital stock of the Company sold upon exercise of a subscription, option or warrant or the conversion of a security outstanding on the date of this Agreement, (ii) any shares of such capital stock, or other securities convertible or exercisable or exchangeable for such shares, in either case issued pursuant to any employee stock option or benefit plan of the Company existing on the date of this Agreement and (iii) stock repurchases in accordance with the Company's publicly announced stock repurchase program) or any increase of more than $25,000,000 in the consolidated short-term or long-term debt of the Company or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus; (vi) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; each subsidiary of the Company identified in Annex II hereto (collectively, the "Material Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation; Unimar has been duly formed and is validly existing as a partnership under the laws of the State of Texas; 3 4 and the Company does not have any subsidiary that is a "significant subsidiary" (within the meaning of the published rules and regulations of the Commission under the Act) that is not identified in Annex II hereto; (vii) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and conform to the description thereof contained in the Prospectus; and all of the issued shares of capital stock of each Material Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable, and all of such shares of capital stock and 50% of the equity interests in Unimar (except for directors' qualifying shares and shares held by third parties solely to satisfy local law requirements and except as set forth in the Prospectus) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims; (viii) The Shares have been duly and validly authorized and issued, are fully paid and non-assessable and conform to the description of the Stock contained in the Prospectus; (ix) The compliance by the Company with all of the provisions of this Agreement and the International Underwriting Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries or, to the best of the Company's knowledge, Unimar is a party or by which the Company or any of its subsidiaries or Unimar is bound or to which any of the property or assets of the Company or any of its subsidiaries or Unimar is subject, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, any of its subsidiaries or Unimar or any of their properties (excluding conflicts, breaches, violations and defaults that, individually or in the aggregate, will not have any material adverse effect on the general affairs, management, financial position, stockholders' equity, results of operations or prospects of the Company and its subsidiaries taken as a whole), nor will any such action result in any violation of the provisions of the Restated Certificate of Incorporation or By-laws of the Company; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Company of the transactions contemplated by this Agreement and the International Underwriting Agreement, except the registration under the Act of the Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state or foreign securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters and the International Underwriters; (x) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries or, to the best of the Company's knowledge, Unimar is a party or of which any property of the Company or any of its subsidiaries or Unimar is the subject which, if determined adversely to the Company or any of its subsidiaries or Unimar, would individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (xi) Price Waterhouse LLP, who have certified certain financial statements of the Company and its subsidiaries, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder; and (xii) The Shares have been approved for listing on the New York Stock Exchange and the Pacific Stock Exchange; (xiii) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the published rules and regulations of the Commission thereunder, and the offer and sale of the Shares will not subject the Company to registration under, or result in a violation of, the Investment Company Act; and (xiv) Neither the Company nor any of its affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes. 4 5 (b) Each Selling Stockholder represents and warrants to, and agrees with, each of the Underwriters and the Company that: (i) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the consummation by such Selling Stockholder of the transactions contemplated by this Agreement and the International Underwriting Agreement, except the registration under the Act of the Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state or foreign securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters and the International Underwriters; and such Selling Stockholder has full power and authority to enter into this Agreement and the International Underwriting Agreement and to sell, assign, transfer and deliver the Shares hereunder and under the International Underwriting Agreement; (ii) The sale of the Shares hereunder and under the International Underwriting Agreement and the compliance by such Selling Stockholder with all of the provisions of this Agreement and the International Underwriting Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any statute, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which such Selling Stockholder is a party or by which such Selling Stockholder is bound, or to which any of the property or assets of such Selling Stockholder is subject, or any statute or any order, rule or regulation of any court or governmental agency having jurisdiction over such Selling Stockholder or its property (excluding conflicts, breaches, violations and defaults that, individually or in the aggregate, will not materially adversely affect such Selling Stockholder's ability to perform its obligations under this Agreement or the International Underwriting Agreement), nor will any such action result in any violation of the provisions of the partnership agreement or other documents, if any, relating to such Selling Stockholder; (iii) Such Selling Stockholder has, and immediately prior to each Time of Delivery (as defined in Section 4 hereof) such Selling Stockholder will have, good and valid title to the Shares to be sold at such Time of Delivery hereunder and under the International Underwriting Agreement, free and clear of all liens, encumbrances, equities or claims (other than the interests of the several Underwriters under this Agreement and of the International Underwriters under the International Underwriting Agreement; and, upon delivery of such Shares and payment therefor pursuant hereto and thereto, good and valid title to such Shares, free and clear of all liens, encumbrances, equities or claims, will pass to the several Underwriters and the International Underwriters; (iv) No offering, sale contract to sell, or other disposition of any Stock or any securities exchangeable or convertible into or exercisable for any Stock will be made within 90 days after the date of the Prospectus, directly or indirectly, by such Selling Stockholder, otherwise than hereunder or under the International Underwriting Agreement or with your written consent or as described in the Prospectus; (v) Such Selling Stockholder has not taken and will not take, directly or indirectly, any action which is designed to or which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares; and (vi) To the extent that any statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement thereto are made in reliance upon and in conformity with written information furnished to the Company by such Selling Stockholder expressly for use therein, such Preliminary Prospectus and the Registration Statement did not, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus, when they become effective or are filed with the Commission, as the case may be, will not, contain any untrue statement of a material fact or omit 5 6 to state any material fact required to be stated therein or necessary to make the statements therein not misleading. In order to document the Underwriters' compliance with the reporting and withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the transactions herein contemplated, each Selling Stockholder agrees to deliver to you prior to or at the First Time of Delivery (as hereinafter defined) a properly completed and executed United States Treasury Department Form W-9 (or other applicable form or statement specified by Treasury Department regulations in lieu thereof). 2. Subject to the terms and conditions herein set forth, (a) each Selling Stockholder agrees, severally and not jointly, to sell to the several Underwriters the number of Firm Shares set forth opposite such Selling Stockholder's name in Schedule II hereto, and each of the Underwriters agrees, severally and not jointly, to purchase from the Selling Stockholders at a purchase price per share of $_____ the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto; each Underwriter shall be obligated to purchase from each Selling Stockholder at a purchase price per share of $_____, that number of Firm Shares (to be adjusted by you so as to eliminate fractional shares) determined by multiplying the aggregate number of Firm Shares to be sold by such Selling Stockholder as set forth opposite its name in Schedule II hereto by a fraction, the numerator of which is the aggregate number of Firm Shares to be purchased by such Underwriter as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the aggregate number of Firm Shares to be purchased by all of the Underwriters from both of the Selling Stockholders hereunder and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, each Selling Stockholder agrees, severally and not jointly, to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Selling Stockholders, at the purchase price per share set forth in clause (a) of this Section 2, that portion of the number of Optional Shares as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of the Optional Shares which all of the Underwriters are entitled to purchase hereunder. The Selling Stockholders hereby grant to the Underwriters the right to purchase at their election up to 1,200,000 Optional Shares, at the purchase price per share set forth in the paragraph above, for the sole purpose of covering over-allotments in the sale of the Firm Shares. Any such election to purchase Optional Shares may be exercised by written notice from you to the Selling Stockholders, given within a period of 30 calendar days after the date of this Agreement and setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Selling Stockholders otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. 3. Upon the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale upon the terms and conditions set forth in the Prospectus. 4. Certificates in definitive form for the Shares to be purchased by each Underwriter hereunder, and in such denominations and registered in such names as Salomon Brothers Inc may request upon at least forty-eight hours' prior notice to the Company and the Selling Stockholders, shall be delivered by or on behalf of each Selling Stockholder to you for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by certified or official bank check or checks, payable to the order of such Selling Stockholder, in New York Clearing House funds, all at the office of Salomon Brothers Inc, Seven World Trade Center, New York, New York, or through the facilities of The Depository Trust Company. The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on ________ __, 199_ or such other time and date as you, the Company and the Selling Stockholders may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by you in the written notice given by you of the Underwriters' election to purchase such Optional Shares, or such other time and date as you, the Company and the Selling 6 7 Stockholders may agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the "First Time of Delivery," such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the "Second Time of Delivery", and each such time and date for delivery is herein called a "Time of Delivery." Such certificates will be made available for checking and packaging at least twenty-four hours prior to each Time of Delivery at such office of Salomon Brothers Inc. 5. The Company agrees with each of the Underwriters and each of the Selling Stockholders: (a) To prepare the Prospectus in a form approved by you and the Selling Stockholders and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or Prospectus which shall be reasonably disapproved by you or the Selling Stockholders promptly after reasonable notice thereof; to advise you and the Selling Stockholders, promptly after it receives notice thereof, of the time when the Registration Statement, or any amendment thereto, has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish you and the Selling Stockholders copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Shares; to advise you and the Selling Stockholders, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or prospectus, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) Promptly from time to time to take such action as you may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) To furnish the Underwriters with copies of the Prospectus in such quantities as you may from time to time reasonably request, and, if the delivery of a prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Shares and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act or the Exchange Act, to notify you and upon your request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a prospectus in connection with sales of any of the Shares at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense 7 8 of such Underwriter, to prepare and deliver to such Underwriter as many copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act; (d) To make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including at the option of the Company Rule 158); (e) During the period beginning from the date hereof and continuing to and including the date 90 days after the date of the Prospectus, not to offer, sell, contract to sell or otherwise dispose of (other than pursuant to employee stock option plans existing, or on the conversion, exchange or exercise of convertible, exchangeable or exercisable securities outstanding, on the date of this Agreement) any Stock or securities convertible or exchangeable into or exercisable for Stock, without your prior written consent or as described in the Prospectus; (f) To furnish to its stockholders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders' equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail; and (g) During a period of three years from the effective date of the Registration Statement, to furnish to you copies of all reports or other communications (financial or other) furnished to stockholders, and deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional information concerning the business and financial condition of the Company as you may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission). 6. The Company covenants and agrees with the several Underwriters that it will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the International Underwriting Agreement, the Agreement between Syndicates, any Selling Agreements, the Blue Sky Memorandum and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; (iv) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Shares; (v) the cost of preparing stock certificates; (vi) the cost and charges of any transfer agent or registrar; (vii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section; and (viii) the reasonable fees and expenses of Latham & Watkins, counsel to the Selling Stockholders. 8 9 Salomon Brothers Inc agrees to advance any applicable New York State stock transfer tax, and each Selling Stockholder agrees to reimburse Salomon Brothers Inc for associated carrying costs in respect of the Shares sold by such Selling Stockholder if such tax payment is not rebated on the day of payment and for any portion of such tax payment not rebated. It is understood, however, that, except as provided in this Section, Section 8 and Section 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected with any offers they may make. It is further understood that the Underwriters will not be responsible for any costs or expenses incident to the performance of the Selling Stockholders' obligations hereunder, including any fees or expenses of counsel for the Selling Stockholders and, except as provided above in this Section 6, any expenses or taxes incident to the sale and delivery of the Shares by each Selling Stockholder to the Underwriters hereunder. The Company and the Selling Stockholders agree that nothing contained in this Section 6 shall supersede the terms and provisions of the Amended and Restated Registration Rights Agreement, dated as of September 30, 1987, by and among Union Texas Petroleum Holdings, Inc. and Certain Holders of Certain Securities of Union Texas Petroleum Holdings, Inc. 7. The obligations of each Selling Stockholder hereunder to sell and deliver Shares at a Time of Delivery shall be subject, in its discretion, to the conditions set forth in Clauses (a), (c), (e) and (i) (with respect to, in the case of the condition set forth in clause (i) below, the obligations of the Company thereunder) below. The obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company and of each Selling Stockholder herein are, at and as of such Time of Delivery, true and correct, the condition that the Company and each Selling Stockholder shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction; (b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall have furnished to you such opinion or opinions, dated such Time of Delivery, with respect to the incorporation of the Company, the validity of the Shares being delivered at such Time of Delivery, the Registration Statement, the Prospectus, and other related matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Andrews & Kurth L.L.P., counsel for the Company, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with requisite corporate power and authority to own its properties and conduct its business as described in the Prospectus; (ii) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company (including the Shares being delivered at such Time of Delivery) have been duly and validly authorized and issued and are fully paid and non-assessable; and the Shares conform to the description of the Stock contained in the Prospectus; (iii) The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction 9 10 in which it owns or leases a material amount of properties, or conducts any material business, so as to require such qualification, or is subject to no material liability or disability by reason of failure to be so qualified in any such jurisdiction (such counsel being entitled to rely in respect of the opinion in this clause upon opinions of local counsel and in respect of matters of fact upon certificates of public officials or officers of the Company, provided that such counsel shall state that they believe that both you and they are justified in relying upon such opinions and certificates); (iv) Each Material Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation; to the best of such counsel's knowledge after reasonable investigation, Unimar has been duly formed and is validly existing as a partnership under the laws of the State of Texas; and all of the issued shares of capital stock of each Material Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable, and (except for directors' qualifying shares and shares held by third parties solely to satisfy local law requirements and except as otherwise set forth in the Prospectus), to the best of such counsel's knowledge after reasonable investigation and except as set forth in a schedule to such counsel's opinion, all of such shares of capital stock and 50% of the equity interests in Unimar are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims within the meaning of the Uniform Commercial Code (such counsel being entitled to (A) state that the opinion in this clause relating to the ownership of capital stock and equity interests is based solely on a review of the corporate records of the Company and its subsidiaries and the records of Unimar, the certificate or certificates representing such shares of capital stock and evidence of such equity interests in Unimar and a certificate or certificates in respect of matters of fact as to ownership of and liens, encumbrances, equities or claims on such shares of capital stock and equity interests, provided that such counsel shall state that they believe that both you and they are justified in relying upon such certificate or certificates and (B) rely in respect of the opinion in this clause upon opinions of local counsel furnished to you at such Time of Delivery and in respect of matters of fact upon certificates of public officials or officers of the Company or its subsidiaries furnished to you at such Time of Delivery, provided that such counsel shall state that they believe that both you and they are justified in relying upon such opinions and certificates); (v) To the best of such counsel's knowledge after reasonable investigation, other than as set forth in the Prospectus, there is no pending or threatened action, suit or proceeding before any court or any governmental agency or body or any arbitrator involving the Company, any Material Subsidiary or Unimar required to be disclosed in the Registration Statement that is not adequately disclosed therein; (vi) This Agreement and the International Underwriting Agreement have been duly authorized, executed and delivered by the Company; (vii) The compliance by the Company with all of the provisions of this Agreement and the International Underwriting Agreement and the consummation of the transactions herein and therein contemplated will not result in any violation of the Restated Certificate of Incorporation or By-laws of the Company and, to the best of such counsel's knowledge after reasonable investigation, such action will not result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Material Subsidiaries or, to the best of the Company's knowledge, Unimar is a party or by which the Company or any of its Material Subsidiaries or, to the best of such counsel's knowledge, Unimar is bound or to which any of the property or assets of the Company or any of its Material Subsidiaries or, to the best of such counsel's knowledge, Unimar is subject, or any statute or any order, rule or regulation known to such counsel 10 11 of any court or governmental agency or body having jurisdiction over the Company, any of its Material Subsidiaries or, to the best of such counsel's knowledge, Unimar or any of their properties (excluding breaches, violations and defaults that, individually or in the aggregate, will not have any material adverse effect on the general affairs, management, financial position, stockholders' equity, results of operations or prospects of the Company and its subsidiaries taken as a whole) (such counsel being entitled to rely in respect of the opinion in this clause relating to statutes, orders, rules or regulations upon opinions of local counsel furnished to you at such Time of Delivery, provided that such counsel shall state that they believe that both you and they are justified in relying upon such opinions); (viii) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body having jurisdiction over the Company is required for the consummation by the Company of the transactions contemplated by this Agreement and the International Underwriting Agreement, except the registration under the Act of the Shares, and such consents, approvals, authorizations, registrations or qualifications as may be required under state or foreign securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters and the International Underwriters; (ix) The statements made in the Prospectus under the captions "Description of Capital Stock" and "Certain United States Tax Consequences to Non-U.S. Holders", insofar as such statements constitute summaries of the legal matters and documents referred to therein, fairly present the information called for with respect to such legal matters and documents and fairly summarize such legal matters and documents; (x) The documents incorporated by reference in the Prospectus or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (other than the financial statements and related schedules and engineering and statistical data therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the published rules and regulations of the Commission thereunder; and (xi) The Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Company prior to such Time of Delivery (other than the financial statements and related schedules and engineering and statistical data therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the published rules and regulations of the Commission thereunder. Such counsel shall state that, although they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in any of the documents referred to in subclause (x) of this Clause (c) or in the Registration Statement or the Prospectus (except as and to the extent described in subclause (ix) of this Clause (c)), they have no reason to believe that (i) any of the documents referred to in subclause (x) of this Clause (c) when such documents became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact, or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Exchange Act with the Commission, an untrue statement of a material fact, or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; or (ii) as of its effective date, the Registration Statement 11 12 or any further amendment thereto made by the Company prior to such Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion or belief) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion or belief) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or that, as of such Time of Delivery, either the Registration Statement or the Prospectus or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion or belief) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and they do not know of any amendment to the Registration Statement required to be filed or of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus or required to be described in the Registration Statement or the Prospectus which are not filed or incorporated by reference or described as required. In rendering the opinions referred to in subclauses (ii) (other than with respect to authorized capitalization), (iii), (iv), (v), (vii) and (viii) of this Clause (c), such counsel may rely upon an opinion of Newton W. Wilson, III, Esq., General Counsel, Vice President-Administration and Secretary of the Company, furnished to you at such Time of Delivery, provided that such counsel shall state that they believe that both you and they are justified in relying upon such opinion. In rendering such opinion, such counsel may (A) state that their opinion is limited to matters governed by the Federal laws of the United States, the laws of the State of New York and the State of Texas and the General Corporation Law of the State of Delaware and (B) rely (to the extent such counsel deem proper and specify in their opinion), as to matters involving the application of the laws of other jurisdictions, upon the opinions of local counsel referred to in subclauses (iii), (iv) and (vii) of this Clause (c). (d) Latham & Watkins, counsel for each of the Selling Stockholders, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) Each Selling Stockholder has been duly formed and is validly existing as a partnership under the laws of the State of Delaware; this Agreement and the International Underwriting Agreement have been duly executed and delivered by each Selling Stockholder; and the sale of the Shares hereunder and thereunder and the compliance by each Selling Stockholder with all of the provisions of this Agreement and the International Underwriting Agreement and the consummation of the transactions herein and therein contemplated will not result in any violation of the respective Partnership Agreement or other constituent documents, if any, relating to each Selling Stockholder nor will such action result in a breach or violation of any terms or provisions of, or constitute a default under, any statute, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which either Selling Stockholder is a party or by which either Selling Stockholder is bound or to which any of the property or assets of either Selling Stockholder is subject, or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over either Selling Stockholder or the property of either Selling Stockholder (excluding breaches, violations and defaults that, individually or in the aggregate, will not materially adversely affect such Selling Stockholder's ability to perform its obligations under this Agreement or the International Underwriting Agreement); 12 13 (ii) No consent, approval, authorization or order of any court or governmental agency or body is required for the consummation of the transactions contemplated by this Agreement and the International Underwriting Agreement in connection with the sale of the Shares hereunder and under the International Underwriting Agreement except such as have been obtained under the Act and such as may be required under state or foreign securities or Blue Sky laws in connection with the purchase and distribution of such Shares by the Underwriters and the International Underwriters; (iii) Immediately prior to such Time of Delivery each Selling Stockholder had good and valid title to the Shares to be sold at such Time of Delivery by such Selling Stockholder under this Agreement and the International Underwriting Agreement, free and clear of all liens, encumbrances, equities or claims, within the meaning of the Uniform Commercial Code (such counsel being entitled to state that the opinion in this clause is based solely on a review of the partnership records of such Selling Stockholder, the certificate or certificates representing such Shares and a certificate in respect of matters of fact as to ownership of and liens, encumbrances, equities or claims on the Shares, provided that such counsel shall state that they believe that both you and they are justified in relying upon such certificate or certificates) and full right, power and authority to sell, assign, transfer and deliver the Shares hereunder and thereunder; and (iv) Assuming that each of the several Underwriters purchasing Shares to be sold pursuant to this Agreement and the International Underwriting Agreement have purchased such Shares in good faith and without notice of any lien, encumbrance, equity or any other adverse claim within the meaning of the Uniform Commercial Code, the delivery of certificates for the Shares pursuant to this Agreement and the International Underwriting Agreement will pass valid and marketable title to such Shares to each of the several Underwriters who have purchased such Shares, free and clear of all liens, encumbrances, equities or adverse claims within the meaning of the Uniform Commercial Code. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware. (e) On the effective date of the Registration Statement and the effective date of the most recently filed post- effective amendment to the Registration Statement and also at each Time of Delivery, Price Waterhouse shall have furnished to you a letter or letters, dated the respective date of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Annex I hereto; (f) (i) None of the Company or any of its subsidiaries or Unimar shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, which loss or interference is material to the Company and its subsidiaries taken as a whole, and (ii) since the respective dates as of which information is given in the Prospectus there shall not have been any change in the capital stock (other than (i) any shares of capital stock of the Company sold upon the exercise of a subscription, option or warrant or the conversion of a security outstanding on the date of this Agreement, (ii) any shares of such capital stock, or other securities convertible or exercisable or exchangeable for such shares, in either case issued pursuant to any employee stock option or benefit plan of the Company existing on the date of this Agreement and (iii) stock repurchases in accordance with the Company's publicly announced stock repurchase program) or any increase of more than $25,000,000 in the consolidated short-term or long-term debt of the Company or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and 13 14 its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in Clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus; (g) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the Company's debt securities or its subsidiary's preferred stock by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities (other than Standard & Poor's Corporation's "negative outlook" on its rating of the Company's debt securities, which outlook was publicly announced prior to the date hereof) or its subsidiary's preferred stock; (h) On or after the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iii) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this Clause (iii) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus; and (i) The Company and each Selling Stockholder shall have furnished or caused to be furnished to you at such Time of Delivery certificates of the Company (executed by appropriate officers of the Company) and of such Selling Stockholder, respectively, satisfactory to you as to the accuracy of the representations and warranties of the Company and such Selling Stockholder, respectively, herein at and as of such Time of Delivery, as to the performance by the Company and such Selling Stockholder of all of their respective obligations hereunder to be performed at or prior to such Time of Delivery, and as to such other matters as you may reasonably request, and the Company shall have furnished or caused to be furnished certificates as to the matters set forth in subsections (a) and (f) of this Section, and as to such other matters as you may reasonably request. 8. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any Underwriter through you expressly for use therein or by either Selling Stockholder expressly for use therein; and provided, further, that the Company shall not be liable to any Underwriter under the indemnity agreement in this subsection (a) with respect to any Preliminary Prospectus to the extent that any such loss, claim, damage or liability of such Underwriter results from the fact that such Underwriter sold Shares to a person as to whom it shall be established that there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus (excluding documents incorporated by reference) or of the Prospectus as then amended or supplemented (excluding documents incorporated by reference) in any case where such delivery is required by the Act if the Company has previously furnished copies thereof to such Underwriter and the loss, claim, damage 14 15 or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Preliminary Prospectus which was corrected in the Prospectus (excluding documents incorporated by reference) or in the Prospectus as then amended or supplemented (excluding documents incorporated by reference). (b) Each Selling Stockholder (subject to the limitation on indemnity set forth in subsection (g)) will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished by such Selling Stockholder to the Company, or to an Underwriter through you, expressly for use therein; and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided that such Selling Stockholder shall not be liable to any Underwriter under the indemnity agreement in this subsection (b) with respect to any Preliminary Prospectus to the extent that any such loss, claim, damage or liability of such Underwriter results from the fact that such Underwriter sold Shares to a person as to whom it shall be established that there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus (excluding documents incorporated by reference) or of the Prospectus as then amended or supplemented (excluding documents incorporated by reference) in any case where such delivery is required by the Act if the Company has previously furnished copies thereof to such Underwriter and the loss, claim, damage or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Preliminary Prospectus which was corrected in the Prospectus (excluding documents incorporated by reference) or in the Prospectus as then amended or supplemented (excluding documents incorporated by reference). (c) Each Underwriter will indemnify and hold harmless the Company and each Selling Stockholder against any losses, claims, damages or liabilities to which the Company or such Selling Stockholder may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter through you expressly for use therein; and will reimburse the Company and such Selling Stockholder for any legal or other expenses reasonably incurred by the Company or such Selling Stockholder in connection with investigating or defending any such action or claim as such expenses are incurred. (d) Promptly after receipt by a party entitled to indemnification under subsection (a), (b) or (c) above (the "indemnified party") of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against a party required to provide indemnification to such indemnified party under such subsection (the "indemnifying party"), notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with 15 16 counsel satisfactory to such indemnified party (which shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. In no event shall an indemnifying party be liable for the fees and expenses of more than one counsel (in addition to any local counsel), apart from counsel to such indemnifying party, for all indemnified parties in connection with any one action or separate but similar or related actions arising out of the same general allegations or circumstances. No indemnifying party shall be liable for any settlement of any such action effected without its consent, provided that such consent is not unreasonably withheld or delayed. (e) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a), (b) or (c) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (d) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Selling Stockholders on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Shares purchased under this Agreement (before deducting expenses) received by the Company and the Selling Stockholders on the one hand bear to the total underwriting discounts and commissions received by the Underwriters on the other with respect to the Shares purchased under this Agreement, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or either Selling Stockholder on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (e) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (e). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (e), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (e) to contribute are several in proportion to their respective underwriting obligations and not joint. (f) The obligations of the Company and each Selling Stockholder under this Section 8 shall be in addition to any liability which the Company and such Selling Stockholder may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any 16 17 Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. (g) Notwithstanding the foregoing, in no event shall either Selling Stockholder be required to pay an amount in indemnification and contribution under subsections (b) and (e) above in excess of the total proceeds received by such Selling Stockholder from the Shares sold by it pursuant to this Agreement. (h) With respect to rights and obligations of the Company and the Selling Stockholders vis a vis each other, nothing in this Section 8 shall be construed to modify or supersede such rights and obligations as set forth in the Amended and Restated Registration Rights Agreement dated as of September 30, 1987 among the Company, the predecessor to Allied Signal, Inc. and the Selling Stockholders and the letter dated April 20, 1995 from the Selling Stockholders to the Company. 9. (a) If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Selling Stockholders shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Selling Stockholders that you have so arranged for the purchase of such Shares, or the Selling Stockholders notify you that they have so arranged for the purchase of such Shares, you or the Selling Stockholders shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments to the Registration Statement or the Prospectus which in your opinion and the opinion of the Company may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Shares. (b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Selling Stockholders as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Selling Stockholders shall have the right to require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Selling Stockholders as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Selling Stockholders shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Selling Stockholders to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company or the Selling Stockholders, except for the expenses to be borne by the Company, the Selling Stockholders and the Underwriters as provided in Section 6 hereof and the 17 18 indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of the Company, each Selling Stockholder and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company or the Selling Stockholders, or any officer or director or controlling person of the Company or the Selling Stockholders, and shall survive delivery of and payment for the Shares. 11. If this Agreement shall be terminated pursuant to Section 9 hereof, neither the Company nor the Selling Stockholders shall then be under any liability to any Underwriter except as provided in Section 6 and Section 8 hereof; but, if for any other reason any Shares are not delivered by or on behalf of either Selling Stockholder as provided herein, such Selling Stockholder will reimburse the Underwriters through you for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company and the Selling Stockholders shall then be under no further liability to any Underwriter in respect of the Shares not so delivered except as provided in Section 6 and Section 8 hereof. 12. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives at Seven World Trade Center, New York, N.Y. 10048, Attention: Registration Department; if to either Selling Stockholder shall be delivered or sent by mail, telex or facsimile transmission to such Selling Stockholder at _____________, Attention: ______________; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire or telex constituting such Questionnaire, which address will be supplied to the Company or either Selling Stockholder by you upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and the Selling Stockholders and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of the Company and each person who controls the Company, either Selling Stockholder or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. No partner of either Selling Stockholder or any successor general partner of such Selling Stockholder shall have any personal liability for the performance of any of such Selling Stockholder's obligations hereunder, and any liability or obligation of such Selling Stockholder arising hereunder shall be limited to and satisfied only out of the property of such Selling Stockholder. 15. Time shall be of the essence of this Agreement. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 18 19 17. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 19 20 If the foregoing is in accordance with your understanding, please sign and return to us nine counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters, the Company and the Selling Stockholders. Very truly yours, UNION TEXAS PETROLEUM HOLDINGS, INC. By:___________________________________________________ ___________________________________________________ Name: Title: PETROLEUM ASSOCIATES, L.P. By:___________________________________________________ ___________________________________________________ Name: Title: KKR PARTNERS II, L.P. By:___________________________________________________ ___________________________________________________ Name: Title: 20 21 Accepted as of the date hereof at New York, New York: SALOMON BROTHERS INC CS FIRST BOSTON CORPORATION GOLDMAN, SACHS & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: SALOMON BROTHERS INC By:_____________________________________ Name: Title: For themselves and the other several Underwriters named in Schedule I to the foregoing Agreement. 21 22 SCHEDULE I
Number of Optional Shares Total Number to be Purchased of Firm Shares if Maximum Underwriter to be Purchased Option Exercised ----------- --------------- ---------------- Salomon Brothers Inc . . . . . . . . . . . . . . . . CS First Boston Corporation . . . . . . . . . . . . Goldman, Sachs & Co. . . . . . . . . . . . . . . . . Merrill Lynch, Pierce, Fenner & Smith . . . . . . . . Incorporated . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . 8,000,000 1,200,000 =================================================
23 SCHEDULE II
Number of Optional Shares Total Number to be Sold of Firm Shares if Maximum SELLING STOCKHOLDER to be Sold Option Exercised - ------------------- -------------- ---------------- Petroleum Associates, L.P. . . . . . . . . . . . . . KKR Partners II, L.P. . . . . . . . . . . . . . . .
1 24 ANNEX I Pursuant to Section 7(e) of the Underwriting Agreement, the accountants shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and financial statement schedules provided pursuant to Article 12 of Regulation S-X audited by them and incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the applicable related published rules and regulations thereunder with respect to Registration Statements on Form S-3; and they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements for the periods specified in such letter, as indicated in their reports thereon, copies of which have been furnished to the representatives of the Underwriters (the "Representatives"); (iii) On the basis of limited procedures, not constituting an audit in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements referred to below, a reading of the latest available interim financial data of the Company and its subsidiaries, a reading of the minute books of the Company and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of the Company and its subsidiaries responsible for financial and accounting matters regarding the specified items for which representations are requested below, nothing came to their attention as a result of the foregoing procedures that caused them to believe that: (A) the unaudited condensed consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flows included in the Company's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act as it applies to Form 10-Q and the related published rules and regulations thereunder or are not in conformity with generally accepted accounting principles, when read in conjunction with the audited financial statements and notes thereto incorporated by reference in the Registration Statement, applied on a basis substantially consistent with the basis for the audited consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flows included in the Company's Annual Report on Form 10-K for the most recent fiscal year; (B) at the date of the latest available interim financial data and at a specified date not more than five days prior to the date of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock upon exercise of options and stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increase in the consolidated short-term or long-term debt of the Company and its subsidiaries, or any decreases in consolidated net current assets (working capital) or stockholders' equity or other items heretofore determined with the Representatives, or any increases in any items heretofore determined with the Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (C) for the period from the date of the latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (B) there were any decreases in consolidated net revenues or operating profit or the total or per share amounts of consolidated net income or other items heretofore determined with the Representatives, or any increases in any items heretofore determined with the Representatives, in each case as compared with the comparable period of the preceding year, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and 25 (iv) In addition to the audit referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (iv) above, they have carried out certain specified procedures, not constituting an audit in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of the Company and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference) or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives or in documents incorporated by reference in the Prospectus specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting records of the Company and its subsidiaries and have found them to be in agreement. 2 26 ANNEX II MATERIAL SUBSIDIARIES Union Texas Petroleum Energy Corporation Union Texas International Corporation Union Texas East Kalimantan Limited Union Texas Pakistan, Inc. Union Texas Petroleum Limited Unistar, Inc. Union Texas Britannia Limited Union Texas Finance, Inc. EX-1.2 3 INTERNATIONAL UNDERWRITING AGREEMENT 1 EXHIBIT 1.2 UNION TEXAS PETROLEUM HOLDINGS, INC. COMMON STOCK (PAR VALUE $.05 PER SHARE) ________________ Underwriting Agreement (International Version) ______ __, 199_ SALOMON BROTHERS INTERNATIONAL LIMITED CS FIRST BOSTON LIMITED GOLDMAN SACHS INTERNATIONAL MERRILL LYNCH INTERNATIONAL LIMITED As representatives of the several Underwriters named in Schedule I hereto c/o SALOMON BROTHERS INTERNATIONAL LIMITED Seven World Trade Center New York, New York 10048 Dear Sirs: Petroleum Associates, L.P. and KKR Partners II, L.P. (together, the "Selling Stockholders"), propose, subject to the terms and conditions stated herein, to sell to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of 2,000,000 shares (the "Firm Shares") and, at the election of the Underwriters, up to 300,000 additional shares (the "Optional Shares") of Common Stock, par value $.05 per share (the "Stock"), of Union Texas Petroleum Holdings, Inc., a Delaware corporation (the "Company"). The Firm Shares and the Optional Shares which the Underwriters elect to purchase pursuant to Section 2 hereof are collectively referred to herein as the "Shares". It is understood and agreed to by all parties that the Company and the Selling Stockholders are concurrently entering into an agreement, a copy of which is attached hereto (the "U.S. Underwriting Agreement"), providing for the sale by the Selling Stockholders of up to a total of 9,200,000 shares of Stock (the "U.S. Shares"), including the over-allotment option thereunder, through arrangements with certain underwriters in the United States (the "U.S. Underwriters"), for whom Salomon Brothers Inc, CS First Boston Corporation, Goldman, Sachs & Co. and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as representatives. Anything herein or therein to the contrary notwithstanding, the respective closings under this Agreement and the U.S. Underwriting Agreement are hereby expressly made conditional on one another. The Underwriters hereunder and the U.S. Underwriters are simultaneously entering into an Agreement between U.S. and International Underwriting Syndicates (the "Agreement between Syndicates") which provides, among other things, for the transfer of shares of Stock between the two syndicates and for consultation by the representatives hereunder with Salomon Brothers Inc prior to exercising the rights of the Underwriters under Section 7 hereof. Two forms of prospectus are to be used in connection with the offering and sale of shares of Stock contemplated by the foregoing, one relating to the Shares hereunder and the other relating to the U.S. Shares. The latter form of prospectus will be identical to the former except for certain substitute pages 2 as included in the registration statement and amendments thereto as mentioned below. Except as used in Sections 2, 3, 4, 9 and 11 herein, and except as the context may otherwise require, references hereinafter to the Shares shall include all the shares of Stock which may be sold pursuant to either this Agreement or the U.S. Underwriting Agreement, and references herein to any prospectus whether in preliminary or final form, and whether as amended or supplemented, shall include both the U.S. and the international versions thereof. In addition, this Agreement incorporates by reference certain provisions from the U.S. Underwriting Agreement (including the related definitions of terms, which are also used elsewhere herein) and, for purposes of applying the same, references (whether in these precise words or their equivalent) in the incorporated provisions to the "Underwriters" shall be to the Underwriters hereunder, to the "Shares" shall be to the Shares hereunder as just defined, to "this Agreement" (meaning therein the U.S. Underwriting Agreement) shall be to this Agreement (except where this Agreement is already referred to or as the context may otherwise require) and to the representatives of the Underwriters or to Salomon Brothers Inc shall be to the addressees of this Agreement and to Salomon Brothers International Limited ("SBIL"), and, in general, all such provisions and defined terms shall be applied mutatis mutandis as if the incorporated provisions were set forth in full herein having regard to their context in this Agreement as opposed to the U.S. Underwriting Agreement. 1. The Company hereby makes to the Underwriters, and each Selling Stockholder hereby makes to the Underwriters and the Company, the same respective representations, warranties and agreements as are set forth in Section 1 of the U.S. Underwriting Agreement, which Section is incorporated herein by this reference. 2. Subject to the terms and conditions herein set forth, (a) each Selling Stockholder agrees, severally and jointly, to sell to the several Underwriters the number of Firm Shares set forth opposite such Selling Stockholder's name in Schedule II hereto, and each of the Underwriters agrees, severally and not jointly, to purchase from the Selling Stockholders at a purchase price per share of $_____ the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto; each Underwriter shall be obligated to purchase from each Selling Stockholder at a purchase price per share of $_____, that number of Firm Shares (to be adjusted by you so as to eliminate fractional shares) determined by multiplying the aggregate number of Firm Shares to be sold by such Selling Stockholder as set forth opposite its name in Schedule II hereto by a fraction, the numerator of which is the aggregate number of Firm Shares to be purchased by such Underwriter as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the aggregate number of Firm Shares to be purchased by all of the Underwriters from both of the Selling Stockholders hereunder and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, each Selling Stockholder agrees, severally and not jointly, to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Selling Stockholders, at the purchase price per share set forth in clause (a) of this Section 2, that portion of the number of Optional Shares as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of the Optional Shares which all of the Underwriters are entitled to purchase hereunder. The Selling Stockholders hereby grant to the Underwriters the right to purchase at their election up to 300,000 Optional Shares, at the purchase price per share set forth in the paragraph above, for the sole purpose of covering over-allotments in the sale of the Firm Shares. Any such election to purchase Optional Shares may be exercised by written notice from you to the Selling Stockholders, given within a period of 30 calendar days after the date of this Agreement and setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Selling Stockholders otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. 2 3 3. Upon the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale upon the terms and conditions set forth in the Prospectus. 4. Certificates in definitive form for the Shares to be purchased by each Underwriter hereunder, and in such denominations and registered in such names as Salomon Brothers International Limited may request upon at least forty-eight hours' prior notice to the Company and the Selling Stockholders, shall be delivered by or on behalf of each Selling Stockholder to you for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by certified or official bank check or checks, payable to the order of such Selling Stockholder, in New York Clearing House funds, all at the office of Salomon Brothers Inc, Seven World Trade Center, New York, New York, or through the facilities of The Depository Trust Company. The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on _______ __, 199_ or at such other time and date as you, the Company and the Selling Stockholders may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by you in the written notice given by you of the Underwriters' election to purchase such Optional Shares, or at such other time and date as you, the Company and the Selling Stockholders may agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the "First Time of Delivery", such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the "Second Time of Delivery", and each such time and date for delivery is herein called a "Time of Delivery." Such certificates will be made available for checking and packaging at least twenty-four hours prior to each Time of Delivery at such office of Salomon Brothers Inc. 5. The Company hereby makes with the Underwriters and each of the Selling Stockholders the same agreements as are set forth in Section 5 of the U.S. Underwriting Agreement, which Section is incorporated herein by this reference. 6. The Company, each Selling Stockholder and the Underwriters hereby agree with respect to certain expenses on the same terms as are set forth in Section 6 of the U.S. Underwriting Agreement, which Section is incorporated herein by this reference. 7. Subject to the provisions of the Agreement between Syndicates, the obligations of the Underwriters hereunder shall be subject, in their discretion, at each Time of Delivery to the condition that all representations and warranties and other statements of the Company and of each Selling Stockholder herein are, at and as of such Time of Delivery, true and correct, the condition that the Company and each Selling Stockholder shall have performed all of their respective obligations hereunder theretofore to be performed, and additional conditions identical to those set forth in Section 7 of the U.S. Underwriting Agreement, which Section is incorporated herein by this reference. The obligations of each Selling Stockholder hereunder shall be subject, in its discretion, at each Time of Delivery, to conditions identical to those applicable to it set forth in Section 7 of the U.S. Underwriting Agreement. 8. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any Underwriter through SBIL expressly for use therein or by either Selling Stockholder expressly for use therein; and provided, further, that the Company shall not 3 4 be liable to any Underwriter under the indemnity agreement in this subsection (a) with respect to any Preliminary Prospectus to the extent that any such loss, claim, damage or liability of such Underwriter results from the fact that such Underwriter sold Shares to a person as to whom it shall be established that there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus (excluding documents incorporated by reference) or of the Prospectus as then amended or supplemented (excluding documents incorporated by reference) in any case where such delivery is required by the Act if the Company has previously furnished copies thereof to such Underwriter and the loss, claim, damage or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Preliminary Prospectus which was corrected in the Prospectus (excluding documents incorporated by reference) or in the Prospectus as then amended or supplemented (excluding documents incorporated by reference). (b) Each Selling Stockholder (subject to the limitation on indemnity set forth in subsection (g)) will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished by such Selling Stockholder to the Company, or to an Underwriter through you, expressly for use therein; and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided that such Selling Stockholder shall not be liable to any Underwriter under the indemnity agreement in this subsection (b) with respect to any Preliminary Prospectus to the extent that any such loss, claim, damage or liability of such Underwriter results from the fact that such Underwriter sold Shares to a person as to whom it shall be established that there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus (excluding documents incorporated by reference) or of the Prospectus as then amended or supplemented (excluding documents incorporated by reference) in any case where such delivery is required by the Act if the Company has previously furnished copies thereof to such Underwriter and the loss, claim, damage or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Preliminary Prospectus which was corrected in the Prospectus (excluding documents incorporated by reference) or in the Prospectus as then amended or supplemented (excluding documents incorporated by reference). (c) Each Underwriter will indemnify and hold harmless the Company and each Selling Stockholder against any losses, claims, damages or liabilities to which the Company or such Selling Stockholder may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter through SBIL expressly for use therein; and will reimburse the Company and such Selling Stockholder for any legal or other expenses reasonably incurred by the Company or such Selling Stockholder in connection with investigating or defending any such action or claim as such expenses are incurred. (d) Promptly after receipt by a party entitled to indemnification under subsection (a), (b) or (c) above (the "indemnified party") of notice of the commencement of any action, such indemnified party 4 5 shall, if a claim in respect thereof is to be made against a party required to provide indemnification to such indemnified party under such subsection (the "indemnifying party"), notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (which shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. In no event shall an indemnifying party be liable for the fees and expenses of more than one counsel (in addition to any local counsel), apart from counsel to such indemnifying party, for all indemnified parties in connection with any one action or separate but similar or related actions arising out of the same general allegations or circumstances. No indemnifying party shall be liable for any settlement of any such action effected without its consent, provided that such consent is not unreasonably withheld or delayed. (e) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a), (b) or (c) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (d) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Selling Stockholders on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Shares purchased under this Agreement (before deducting expenses) received by the Company and the Selling Stockholders on the one hand bear to the total underwriting discounts and commissions received by the Underwriters on the other with respect to the Shares purchased under this Agreement, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or either Selling Stockholder on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (e) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (e). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (e), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be 5 6 entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (e) to contribute are several in proportion to their respective underwriting obligations and not joint. (f) The obligations of the Company and each Selling Stockholder under this Section 8 shall be in addition to any liability which the Company and such Selling Stockholder may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. (g) Notwithstanding the foregoing, in no event shall either Selling Stockholder be required to pay an amount in indemnification and contribution under subsections (b) and (e) above in excess of the total proceeds received by such Selling Stockholder from the Shares sold by it pursuant to this Agreement. (h) With respect to rights and obligations of the Company and the Selling Stockholders vis a vis each other, nothing in this Section 8 shall be construed to modify or supersede such rights and obligations as set forth in the Amended and Restated Registration Rights Agreement dated as of September 30, 1987 among the Company, the predecessor to Allied Signal, Inc. and the Selling Stockholders and the letter dated April 20, 1995 from the Selling Stockholders to the Company (and Allied Signal, Inc.). 9. (a) If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Selling Stockholders shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Selling Stockholders that you have so arranged for the purchase of such Shares, or the Selling Stockholders notify you that they have so arranged for the purchase of such Shares, you or the Selling Stockholders shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments to the Registration Statement or the Prospectus which in your opinion and the opinion of the Company may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Shares. (b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Selling Stockholders as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Selling Stockholders shall have the right to require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Selling Stockholders as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Selling Stockholders shall 6 7 not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Selling Stockholders to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company or the Selling Stockholders, except for the expenses to be borne by the Company, the Selling Stockholders and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of the Company, each Selling Stockholder and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company or the Selling Stockholders, or any officer or director or controlling person of the Company or the Selling Stockholders, and shall survive delivery of and payment for the Shares. 11. If this Agreement shall be terminated pursuant to Section 9 hereof, neither the Company nor the Selling Stockholders shall then be under any liability to any Underwriter except as provided in Section 6 and Section 8 hereof; but, if for any other reason any Shares are not delivered by or on behalf of either Selling Stockholder as provided herein, such Selling Stockholder will reimburse the Underwriters through SBIL for all out-of-pocket expenses approved in writing by SBIL, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company and the Selling Stockholders shall then be under no further liability to any Underwriter in respect of the Shares not so delivered except as provided in Section 6 and Section 8 hereof. 12. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the Underwriters in care of SBIL, Seven World Trade Center, New York, New York 10048, Attention: ______, Telex No. ______, facsimile transmission no. ______; if to either Selling Stockholder shall be delivered or sent by mail, telex or facsimile transmission to such Selling Stockholder at ______________, Attention: _________; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company or either Selling Stockholder by SBIL upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and the Selling Stockholders and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of the Company and the Selling Stockholder and each person who controls the Company, either Selling Stockholder or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. No partner of either Selling Stockholder or any successor general partner or such Selling Stockholder shall have any personal liability for the performance of any of such Selling Stockholder's obligations hereunder, and any liability or obligation of such Selling Stockholder arising hereunder shall be limited to and satisfied only out of the property of such Selling Stockholder. 15. Time shall be of the essence of this Agreement. 7 8 16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA. 17. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 8 9 If the foregoing is in accordance with your understanding, please sign and return to us nine counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters, the Company and the Selling Stockholders. Very truly yours, UNION TEXAS PETROLEUM HOLDINGS, INC. By:___________________________________________ Name: Title: PETROLEUM ASSOCIATES, L.P. By:__________________________________________ Name: Title: KKR PARTNERS II, L.P. By:__________________________________________ Name: Title: 9 10 Accepted as of the date hereof at New York, New York: SALOMON BROTHERS INTERNATIONAL LIMITED CS FIRST BOSTON LIMITED GOLDMAN SACHS INTERNATIONAL MERRILL LYNCH INTERNATINOAL LIMITED By: SALOMON BROTHERS INTERNATIONAL LIMITED, representative of the Underwriters 10 11 SCHEDULE I
Number of Optional Shares Total Number to be Purchased of Firm Shares if Maximum Underwriter to be Purchased Option Exercised ----------- --------------- ---------------- Salomon Brothers International Limited . . . . . . . CS First Boston Limited . . . . . . . . . Goldman Sachs International . . . . . . . . . . . . Merrill Lynch International Limited . . . . . . . . . ______________ ______________ Total . . . . . . . . . . . . . . . . . . 2,000,000 300,000 ================== ================
12 SCHEDULE II
Number of Optional Shares Total Number to be Sold of Firm Shares if Maximum SELLING STOCKHOLDER to be Sold Option Exercised - ------------------- -------------- ---------------- Petroleum Associates, L.P. . . . . . . . . . . . . . KKR Partners II, L.P. . . . . . . . . . . . . . . .
EX-5.1 4 OPINION OF LEGAL COUNSEL 1 EXHIBIT 5.1 April 20, 1995 Board of Directors Union Texas Petroleum Holdings, Inc. 1330 Post Oak Boulevard Houston, Texas 77056 Gentlemen: In my capacity as General Counsel, Vice President-Administration and Secretary of Union Texas Petroleum Holdings, Inc. (the "Company"), I have acted as counsel in connection with the Company's Registration Statement on Form S-3 (the "Registration Statement") relating to registration under the Securities Act of 1933, as amended, of the offering and sale of up to 11,500,000 shares of Common Stock, par value $0.05 per share, of the Company (the "Common Stock") (which includes an over-allotment option). All of the 11,500,000 shares will be offered by two limited partnerships affiliated with Kohlberg Kravis Roberts & Co. (collectively, the "Selling Shareholder"). The shares will be offered by the several underwriters represented by Salomon Brothers Inc and the other co-managers (the "Underwriters"). As the basis for the opinion hereinafter expressed, I have examined such statutes, regulations, corporate records and documents, certificates of corporate and public officials and other instruments as I have deemed necessary or advisable for the purposes of this opinion. In such examination, I have assumed the authenticity of all documents submitted to me as originals and the conformity with the original documents of all documents submitted to me as copies. Based on the foregoing and on such legal considerations as I deem relevant, I am of the opinion that the 11,500,000 shares of Common Stock of the Company, which includes the over-allotment option, to be sold by the Selling Shareholder to the Underwriters as described in the Registration Statement have been legally issued, and are currently outstanding, fully paid and non-assessable. I hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the use of my name under the heading "Validity of Common Stock" in the Registration Statement. Very truly yours, /s/ NEWTON W. WILSON, III Newton W. Wilson, III General Counsel, Vice President- Administration and Secretary Union Texas Petroleum Holdings, Inc. EX-23.1 5 CONSENT OF PRICE WATERHOUSE 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of our report dated January 25, 1995 appearing on page 33 of Union Texas Petroleum Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1994. We also consent to the references to us under the headings "Experts" and "Selected Consolidated Financial Data" in such Prospectus. However, it should be noted that Price Waterhouse LLP has not prepared or certified such "Selected Consolidated Financial Data." PRICE WATERHOUSE LLP Houston, Texas April 20, 1995 -----END PRIVACY-ENHANCED MESSAGE-----