-----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, EWYH/B3p9i9FEItxn7JpKjx8LVcM4ZNfo9mVA25fiabR73QIhZNGrpGLVEjEvPPl sq0pWfzhWx7+k/6Id2ujnA== 0000950129-95-000462.txt : 19950517 0000950129-95-000462.hdr.sgml : 19950516 ACCESSION NUMBER: 0000950129-95-000462 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19950512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOBLE DRILLING CORP CENTRAL INDEX KEY: 0000777201 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 730374541 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-59269 FILM NUMBER: 95537129 BUSINESS ADDRESS: STREET 1: 10370 RICHMOND AVE STE 400 CITY: HOUSTON STATE: TX ZIP: 77042 BUSINESS PHONE: 7139743131 MAIL ADDRESS: STREET 1: 10370 RICHMOND AVE STREET 2: STE 400 CITY: HOUSTON STATE: TX ZIP: 77042 S-3 1 FORM S-3 ORIGINAL FILING 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 1995 REGISTRATION NO. 33- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ NOBLE DRILLING CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 73-0374541 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10370 RICHMOND AVENUE, SUITE 400 HOUSTON, TEXAS 77042 (713) 974-3131 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ JAMES C. DAY CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER NOBLE DRILLING CORPORATION 10370 RICHMOND AVENUE, SUITE 400 HOUSTON, TEXAS 77042 (713) 974-3131 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ Copies to: ROBERT D. CAMPBELL WILLIAM P. ROGERS, JR. THOMPSON & KNIGHT, P.C. CRAVATH, SWAINE & MOORE 1700 PACIFIC AVENUE, SUITE 3300 WORLDWIDE PLAZA DALLAS, TEXAS 75201 825 EIGHTH AVENUE (214) 969-1700 NEW YORK, NEW YORK 10019 (212) 474-1000
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this registration statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ ------------------------ 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 PER UNIT(1) PRICE(1) REGISTRATION FEE - --------------------------------------------------------------------------------------------------- Common Stock, par value $.10 per share............................ 11,192,474 $6.75 $75,549,200 $26,052 shares - --------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the registration fee based on the average of the high and low sales prices of the Common Stock reported in the consolidated reporting system for NASDAQ National Market System securities on May 8, 1995. ----------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PROSPECTUS 11,192,474 SHARES [NOBLE LOGO] NOBLE DRILLING CORPORATION COMMON STOCK ($.10 PAR VALUE) This Prospectus relates to the sale from time to time by Salomon Brothers Inc (the "Purchaser") of a maximum of 11,192,474 shares of Common Stock, par value $.10 per share ("Common Stock"), of Noble Drilling Corporation, a Delaware corporation (the "Company"), that may be acquired by the Purchaser either (i) upon conversion of the $2.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share (the "$2.25 Preferred Stock"), of the Company or (ii) under the standby arrangements described herein. The Company has called all of the shares of $2.25 Preferred Stock (the "$2.25 Preferred Shares") for redemption on June 1, 1995 (the "Redemption Date") at a redemption price equal to $26.575 per share, plus an amount equal to unpaid dividends accrued thereon from April 1, 1995 through the Redemption Date of $0.38125 per share, for a total redemption price of $26.95625 per share (the "Redemption Price"). No dividends will accrue on the $2.25 Preferred Shares from and after the Redemption Date. The $2.25 Preferred Shares are convertible into shares of Common Stock at the rate of 5.41946 shares of Common Stock for each share of $2.25 Preferred Stock, until 5:00 p.m., Central Daylight Savings Time, on May 31, 1995, the business day prior to the Redemption Date (the "Final Conversion Date"), at which time the conversion privilege terminates. Cash will be paid in lieu of any fractional shares of Common Stock. No payment or adjustment will be made for dividends accrued on $2.25 Preferred Shares surrendered for conversion. The Company has arranged for the Purchaser to purchase, at a flat price of $27.10 per $2.25 Preferred Share, all $2.25 Preferred Shares properly tendered to it or the Paying Agent prior to the expiration of convertibility on the Final Conversion Date and to convert all such purchased $2.25 Preferred Shares into shares of Common Stock. The Purchaser may also purchase $2.25 Preferred Shares in the open market or otherwise prior to expiration of convertibility on the Final Conversion Date, and any $2.25 Preferred Shares so purchased will be converted into Common Stock. In addition, in the event that less than all the $2.25 Preferred Shares are surrendered for conversion prior to the expiration of convertibility on the Final Conversion Date, the Company has made arrangements with the Purchaser to purchase from the Company such number of shares of Common Stock as would have been issuable upon conversion of the $2.25 Preferred Shares that have not been surrendered for conversion prior to 5:00 p.m., Central Daylight Savings Time, on the Final Conversion Date. See "Standby Arrangements" for a description of the Purchaser's compensation and indemnification arrangements with the Company. The Common Stock is traded through the NASDAQ National Market System under the symbol "NDCO." On May 11, 1995, the reported last sale price of the Common Stock, as reported in the NASDAQ National Market System, was $6.75 per share. See "Price Range of Common Stock and Dividend Policy." THE CONVERTIBILITY OF THE $2.25 PREFERRED SHARES WILL EXPIRE AT 5:00 P.M., CENTRAL DAYLIGHT SAVINGS TIME, ON MAY 31, 1995. NO DIVIDENDS ACCRUED FOR THE PERIOD COMMENCING APRIL 1, 1995 WILL BE PAID ON $2.25 PREFERRED SHARES DULY SURRENDERED FOR CONVERSION PRIOR TO THE EXPIRATION OF CONVERTIBILITY. SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF COMMON STOCK. Under the foregoing alternatives, a holder of $2.25 Preferred Shares (a "Holder") who converted such $2.25 Preferred Shares on May 11, 1995 would have received Common Stock (including cash in lieu of any fractional share) having a market value of $36.58, based on the reported last sale price of the Common Stock, as reported in the NASDAQ National Market System, on that date. As long as the market price of the Common Stock (after giving effect to commissions and any other costs of sale) remains at least $5.01 per share, Holders who elect to convert will receive upon conversion Common Stock (plus cash in lieu of any fractional share) having a current market value greater than the $27.10 in cash that they would be entitled to receive if such $2.25 Preferred Shares were tendered for purchase. It should be noted, however, that the price of the Common Stock received upon conversion will fluctuate in the market, and that Holders may incur various expenses of sale if such Common Stock is sold. 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. On or before the close of business on June 1, 1995 the Purchaser may offer to the public Common Stock, including shares acquired through the purchase and conversion of the $2.25 Preferred Shares, at prices set from time to time by the Purchaser. It is intended that each such price when set will not exceed the highest price offered by any dealer not participating in this distribution, as reported in the NASDAQ National Market System, plus the amount of any concessions to dealers, and it is intended that an offering price set on any calendar day will not be increased more than once during such day. After the close of business on June 1, 1995 the Purchaser may offer Common Stock at a price or prices to be determined, but it is presently intended that any such price will be determined in conformity with the preceding sentence. The Purchaser may thus realize profits or losses independent of the compensation referred to under "Standby Arrangements." Any Common Stock will be offered by the Purchaser when, as and if accepted by the Purchaser and subject to its right to reject orders in whole or in part. This Prospectus covers the sale from time to time by the Purchaser of a maximum of 11,192,474 shares of Common Stock that may be acquired by the Purchaser upon conversion of the $2.25 Preferred Shares or pursuant to the standby arrangements described herein. - --------------------------------------------------- SALOMON BROTHERS INC - -------------------------------------------------------------------------------- The date of this Prospectus is May 12, 1995. 3 IN CONNECTION WITH THIS OFFERING, THE PURCHASER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK, THE $2.25 PREFERRED STOCK AND THE $1.50 CONVERTIBLE PREFERRED STOCK OF THE COMPANY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy and information statements, and other information with the Securities and Exchange Commission (the "Commission"). These reports, proxy and information statements, and other information concerning the Company can 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 at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621-2511 and at Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such material can also be obtained from the Commission at prescribed rates through its Public Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, reports, proxy statements and other information filed by the Company can be inspected at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, Washington, D.C. 20006. The Company has filed with the Commission a Registration Statement on Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the shares of Common Stock offered hereby (including all amendments and supplements thereto, the "Registration Statement"). This Prospectus, which forms a part of the Registration Statement, does not contain all 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. Statements contained herein concerning the provisions of certain documents are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. The Registration Statement and the exhibits thereto can be inspected and copied at the public reference facilities and regional offices referred to above. On September 15, 1994, Chiles Offshore Corporation ("Chiles") merged with and into a wholly owned subsidiary of the Company pursuant to the terms of that certain Agreement and Plan of Merger dated June 13, 1994 among the Company, such subsidiary and Chiles. Prior to the merger, Chiles was engaged in the drilling and workover of offshore oil and gas wells on a contract basis for major and independent oil and gas companies. The Chiles merger has been accounted for as a "pooling of interests" which results in the historical financial statements of the Company being restated for prior periods. Unless otherwise specified, information contained in this Prospectus gives effect to the merger. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed with the Commission pursuant to the Exchange Act, are incorporated herein by reference and made a part of this Prospectus: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. 2. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. 3. The description of the Common Stock contained in the Registration Statement on Form 10 of the Company heretofore filed with the Commission, including any amendments or reports filed for the purpose of updating such description. 2 4 All 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 of the Common Stock covered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. All information appearing in this Prospectus or in any document incorporated herein by reference is not necessarily complete and is qualified in its entirety by the information and financial statements (including notes thereto) appearing in the documents incorporated herein by reference and should be read together with such information and documents. Any statement contained in a document or information incorporated or deemed to be incorporated herein by reference 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 that also is, or is deemed to be, incorporated herein by reference, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE COMPANY UNDERTAKES TO PROVIDE, WITHOUT CHARGE, TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS OR INFORMATION REFERRED TO ABOVE THAT HAS BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS (EXCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE). REQUESTS SHOULD BE DIRECTED TO BYRON L. WELLIVER, SENIOR VICE PRESIDENT-FINANCE, TREASURER AND CONTROLLER, NOBLE DRILLING CORPORATION, 10370 RICHMOND AVENUE, SUITE 400, HOUSTON, TEXAS 77042 (THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY), TELEPHONE (713) 974-3131. 3 5 THE COMPANY The Company is a leading provider of diversified contract drilling services for the oil and gas industry worldwide. The Company's activities include offshore and land drilling services, turnkey drilling services, and engineering and production management services. The Company's drilling fleet is broadly diversified allowing it to work in a variety of operating conditions. The Company's business strategy since becoming a publicly held corporation in 1985 has been to actively expand its international and offshore capabilities through acquisitions and to position itself in geologically promising areas. In addition, the Company attempts to balance its revenues between international and domestic operations. The Company intends to continue to make selective strategic acquisitions as opportunities arise. On September 15, 1994, the Company completed the merger of Chiles Offshore Corporation ("Chiles") with and into a subsidiary of the Company. Prior to the merger, Chiles was engaged in the drilling and workover of offshore oil and gas wells on a contract basis for major and independent oil and gas companies. The assets acquired by the Company in the merger included a fleet of 13 offshore jackup drilling rigs, 11 of which are located in the U.S. Gulf of Mexico and two of which are located offshore Nigeria. Unless otherwise specified, information contained in this Prospectus gives effect to the merger. The Company was organized as a Delaware corporation in 1939. The Company and its predecessors have been engaged in the contract drilling of oil and gas wells for others domestically since 1921 and internationally during various periods since 1939. As hereinafter used in this Prospectus, unless otherwise required by the context, the term "Noble Drilling" refers to Noble Drilling Corporation and the term "Company" refers to Noble Drilling and its consolidated subsidiaries (including the Company's subsidiary into which Chiles was merged). Offshore Drilling Operations. The Company's offshore drilling operations are conducted worldwide. Principal regions of operations currently include the Gulf of Mexico, West Africa, Venezuela and, to a lesser extent, India. The offshore fleet consists of 44 rigs, composed of 32 jackup drilling rigs, eight submersible rigs and four posted barges. The average age of the offshore fleet is 14 years, with 34 of the 44 offshore rigs having been built or rebuilt since 1980. The offshore fleet is currently diversified geographically as follows: U.S. Gulf -- 29 rigs; Mexican Gulf -- two rigs; Nigeria and Zaire -- eight rigs; Venezuela -- four rigs; and India -- one rig. The Company's offshore operations also include labor contracts for drilling and workover activities covering 14 rigs operating in the U.K. North Sea and one rig operating in the Middle East. These rigs are not owned or leased by the Company. Under these labor contracts, the Company provides the personnel necessary to manage and perform the drilling operations from drilling platforms owned by the operator. Land Operations. The Company's land drilling operations are conducted in Canada, Texas and Louisiana. Twenty of the Company's 46 land rigs are being or can be actively bid by the Company. As of April 30, 1995, 14 of the 46 rigs were operating under contract, six were available for bidding and 26 were mothballed or stacked and not being actively marketed. The 20 actively marketed rigs have an average age of 13 years. The domestic land drilling operations of the Company have in recent years been de-emphasized strategically as compared to offshore and international operations, accounting in 1994 for only 2.7 percent of the Company's total operating revenues. Turnkey Drilling and Engineering Services. Through its wholly owned subsidiary, Triton Engineering Services Company ("Triton"), and Triton's subsidiaries, the Company provides turnkey drilling services and other engineering and consulting services for the oil and gas industry. Triton is also engaged in the manufacture and rental of oilfield equipment. The Company acquired all the issued and outstanding common stock of Triton on April 22, 1994 (the "Triton acquisition"). Through its wholly owned subsidiary, Noble Engineering Services Ltd. ("Noble Engineering"), the Company provides engineering services relating primarily to the design of drilling equipment for offshore development and production services. Noble Engineering works, on a contract basis, with operators and prime construction contractors of drilling and production platforms in the design of drilling equipment configurations aimed at optimizing the operational efficiency of developmental drilling by maximizing platform space utilization and load capability. 4 6 INVESTMENT CONSIDERATIONS Prospective purchasers of the Common Stock offered hereby should carefully consider the following matters, as well as the information contained elsewhere in this Prospectus and incorporated herein by reference. INTENSE COMPETITION; INDUSTRY CONDITIONS The offshore contract drilling industry is a highly competitive and cyclical business characterized by high capital and maintenance costs. Although conditions in recent years in the oil and gas industry have precipitated consolidation of offshore contract drilling industry participants, there remains a substantial oversupply of drilling equipment. As a consequence, there has been intense competition for available drilling contracts, resulting in much equipment being idle for long periods of time and generally unfavorable terms and prices for contract drilling. In addition, certain competitors of the Company may have access to greater financial resources than the Company. The Company's operations are materially dependent upon the levels of activity in offshore world oil and U.S. natural gas exploration, development and production. Such activity levels are affected both by short-term and long-term trends in oil and natural gas prices. In recent years, oil and natural gas prices, and therefore the level of offshore drilling and exploration activity, have been extremely volatile. Worldwide military, political and economic events, including initiatives by the Organization of Petroleum Exporting Countries, have contributed to, and are likely to continue to contribute to, price volatility. As events during recent years have exhibited, any prolonged reduction in oil and natural gas prices would depress the level of offshore exploration and development activity and result in a corresponding decline in the demand for the Company's services and therefore have a material adverse effect on the Company's revenues and profitability. During late 1992, U.S. natural gas prices began to improve. Increasing U.S. natural gas prices resulted in significant improvements during 1993 in rig demand and dayrates in the U.S. Gulf of Mexico ("U.S. Gulf"). Declining world oil prices during this period reduced rig demand outside the U.S. Gulf. As a result of declining international rig demand and improved market conditions in the U.S. Gulf, certain contractors mobilized rigs from international markets to the U.S. Gulf during late 1993 and early 1994. The increased supply of drilling rigs in the U.S. Gulf more than offset the increased level of U.S. Gulf rig demand during 1994 and the first quarter of 1995, causing dayrates to deteriorate. The average dayrate charged by the Company in the first quarter of 1995 in the U.S. Gulf was 16 percent lower than the average dayrate charged by the Company in the first quarter of 1994. If the price of natural gas in the U.S., which has increased slightly in recent months, remains at current levels indefinitely, the Company's dayrates and utilization rates in the U.S. Gulf could be adversely affected. The Company believes that, absent an improvement in rig demand outside the U.S. Gulf, the supply of rigs in the U.S. Gulf could continue to have an adverse effect on dayrates and utilization levels of the Company's rig fleet through 1995. The Company can predict neither the future level of demand for its drilling services nor the future conditions in the offshore contract drilling industry. LOSSES FROM OPERATIONS The historical financial data for the Company reflect net losses applicable to common shares of $3,331,000 and $50,078,000 for the three-month period ended March 31, 1995 and the year ended December 31, 1992, respectively. The Company had net income applicable to common shares of $4,930,000, $8,759,000 and $14,916,000 for the three-month period ended March 31, 1994 and the years ended December 31, 1994 and 1993, respectively. The profitability of the Company is materially dependent upon the utilization of and rates for its drilling rigs. No assurance can be given that utilization levels or dayrates will remain at current levels or that they will not decrease in the future. 5 7 SUBSTANTIAL INTERNATIONAL OPERATIONS; NIGERIA AND VENEZUELA A major portion of the Company's revenues has been attributable to international operations. Revenues from international sources accounted for approximately 52 percent and 48 percent of the Company's operating revenues for the three-month period ended March 31, 1995 and the year ended December 31, 1994, respectively. In addition to the risks inherent in the drilling business (See "Investment Considerations -- Operational Risks and Insurance"), the Company's international operations are subject to certain political, economic and other uncertainties including, among others, risks of war and civil disturbances, expropriation, nationalization, renegotiation or modification of existing contracts, taxation policies, foreign exchange restrictions, international monetary fluctuations, and other hazards arising out of foreign governmental sovereignty over certain areas in which the Company conducts operations. International operations are sometimes impacted by laws, regulations or customs giving preferential considerations to drilling contractors with some local ownership. Where necessary, international subsidiaries of Noble Drilling have entered into agreements with foreign companies either to comply with statutory requirements or to take advantage of the additional consideration given to companies with local ownership. Furthermore, no predictions can be made as to what foreign governmental regulations may be enacted in the future that could be applicable to the contract drilling industry. The Company has significant operations in Nigeria. In 1994, Nigeria's two oil worker unions and other national labor unions participated in strikes and protests which resulted in the suspension of drilling activity in Nigeria by certain operators but which did not materially adversely affect the Company's operations. The strikes ended in September 1994. Currently, the Company has four offshore drilling rigs under contract and three offshore drilling rigs stacked and available for bidding in Nigeria. The contracts under which the four rigs are operating each contain provisions permitting the operator to suspend operations in the event of force majeure and to terminate the contract if the force majeure continues; however, no operator has elected to suspend operations pursuant to these provisions. The Company maintains war and political risk insurance (covering physical damage or loss up to the insured value of each rig), subject, in the case of certain coverages, to immediate termination upon certain events or upon termination by the underwriter on seven days' notice. Revenues from drilling activities in Nigeria accounted for approximately 10 percent and 13 percent, respectively, of the Company's operating revenues for the three-month period ended March 31, 1995 and the year ended December 31, 1994. No assurance can be given that the political and economic climate in Nigeria will improve or that it will not worsen. The Company began to operate in Venezuela in late 1993. The Company currently has four jackup rigs working for Lagoven, a subsidiary of the government-owned oil company of Venezuela, under well-to-well contracts. The four rigs were under long-term contracts with Lagoven which expired during the first quarter of 1995. Negotiations are currently underway to renew contracts for two of the rigs under an alliance program with Lagoven, and the remaining two rigs are being actively bid by the Company in Venezuela. Revenues generated from drilling operations in Venezuela accounted for approximately 10 percent of the Company's operating revenues for each of the three-month period ended March 31, 1995 and the year ended December 31, 1994. In recent periods, the Venezuelan economy has experienced high inflation and a shortage of foreign currency. During a banking crisis in July 1994, the Venezuelan government imposed a program of currency exchange controls and taxes on certain financial transactions that temporarily limited the ability of the government-owned oil companies and their affiliates to make payment in U.S. dollars or other hard currencies to oilfield service contractors. The Company's operations have not been materially affected, and the Company continues to receive timely payment for its services in U.S. dollars. Although timely U.S. dollar payments are currently being made to the Company, future exchange control actions of the Venezuelan government could adversely affect the Company's operations in Venezuela. 6 8 DEVALUATION OF MEXICAN CURRENCY Through the first quarter of 1995, the Company had two rigs working under contract offshore Mexico in the Bay of Campeche. These two rigs are currently stacked and being actively bid by the Company in Mexico. Although the Company expects that any Mexican drilling contracts it will enter into in the future will require payments in U.S. dollars, the level of drilling activity and the ability of Mexican parties to meet these obligations will be affected by the strength of the local currency. In late December 1994, the Mexican government devalued its currency by approximately 45 percent. The Mexican new peso further declined in value in the first quarter of 1995; however, the exchange rate has improved in recent weeks. Revenues from drilling activities in Mexico accounted for approximately five percent and six percent, respectively, of the Company's operating revenues for the three-month period ended March 31, 1995 and the year ended December 31, 1994, and the Company has not to date experienced any defaults under its Mexican drilling contracts. At this time, it is not known whether the currency situation in Mexico will cause delays in the renewal of existing contracts or the execution of new drilling contracts for offshore Mexico. No assurance can be given that the economic climate in Mexico will improve or that it will not worsen. CONCENTRATION OF OPERATIONS IN CERTAIN MARKETS Currently, 31 of the Company's 44 mobile offshore drilling rigs are located in the Gulf of Mexico (29 in the U.S. Gulf and two in the Mexican Gulf), eight are located off the coast of West Africa and four are located on Lake Maracaibo in Venezuela. Consequently, given the concentration of such drilling rigs in those regions, a decrease in the demand for offshore drilling rigs in the Gulf of Mexico, and to a lesser extent in West Africa or Venezuela, could have a material adverse effect on the financial performance of the Company. ABSENCE OF DIVIDENDS ON COMMON STOCK The Company has not paid any cash dividends on the Common Stock since becoming a publicly held corporation in October 1985 and does not anticipate paying dividends on the Common Stock at any time in the foreseeable future. The $1.50 Convertible Preferred Stock has priority as to dividends over Common Stock, and no dividend (other than dividends payable solely in Common Stock) may be declared, paid or set apart for payment on the Common Stock unless all accrued and unpaid dividends on the $1.50 Convertible Preferred Stock have been paid or declared and set apart for payment. Certain terms of the indenture governing the 9 1/4% Senior Notes Due 2003 of the Company may restrict the Company's ability to pay cash dividends on the Common Stock and the $1.50 Convertible Preferred Stock. In addition, certain provisions of the Company's bank credit agreement may restrict the payment of dividends on the Common Stock and $1.50 Convertible Preferred Stock. See "Description of Capital Stock -- Restrictions on Dividends." RESTRICTIONS ON FOREIGN OWNERSHIP The Certificate of Incorporation of the Company contains limitations on the percentage of outstanding shares of any class of stock of the Company that can be owned by persons who are not United States citizens within the meaning of certain U.S. statutes relating to ownership of U.S. flag vessels. The Common Stock and the Company's preferred stock (combining all series of preferred stock) are considered to be separate classes of stock for this purpose. Applying the statutory requirements, the Certificate of Incorporation would currently prohibit more than 45 percent of the outstanding Common Stock or more than 45 percent of the outstanding shares of all series of preferred stock of the Company combined from being owned by non-U.S. citizens. As of May 2, 1995, approximately 0.3 percent of the outstanding Common Stock and none of the outstanding $1.50 Convertible Preferred Stock was held by record holders with registered addresses outside the United States. The limitations imposed by the Company's Certificate of Incorporation may at times restrict the ability of the Company's stockholders to transfer shares of their stock to non-U.S. citizens. See "Description of Capital Stock -- Foreign Ownership." 7 9 OPERATIONAL RISKS AND INSURANCE The Company's operations are subject to the many hazards inherent in the drilling business, including blowouts, cratering, fires and collisions or groundings of offshore equipment, which could cause substantial damage to the environment, and damage or loss from adverse weather and seas. These hazards could cause personal injury and loss of life, suspend drilling operations or seriously damage or destroy the property and equipment involved and, in addition to environmental damage, could cause substantial damage to producing formations and surrounding areas. Although the Company maintains insurance against many of these hazards, such insurance is subject to substantial deductibles and provides for premium adjustments based on claims. It also excludes certain matters from coverage, such as loss of earnings on certain rigs. Also, while the Company generally obtains indemnification from its customers for environmental damage with respect to offshore drilling, such indemnification is generally only in excess of a specified amount, which usually ranges from $100,000 to $250,000, except for Triton and its operations which are discussed below. In the case of the turnkey drilling operations of Triton, Triton maintains insurance against pollution and environmental damage in amounts ranging from $5 million to $50 million depending on location, subject to self-insured retentions of $100,000 to $500,000. Under turnkey drilling contracts, Triton generally assumes the risk of pollution and environmental damage, but on occasion receives indemnification from the customer for environmental and pollution liabilities in excess of Triton's pollution insurance coverage. Further, Triton is not insured against certain drilling risks that could result in delays or nonperformance of a turnkey drilling contract, although it generally maintains insurance against delays related to loss of well control. Triton typically obtains contractual indemnification from the drilling contractors that provide the rigs for Triton's turnkey drilling operations for pollution arising from certain acts of such contractors. Notwithstanding the insurance coverage carried by and indemnity coverage provided to the Company, the occurrence of a significant event not fully insured or indemnified against or the failure of a customer to meet its indemnification obligations could materially and adversely affect the Company's operations and financial condition. Moreover, no assurance can be given that the Company will be able to maintain adequate insurance in the future at rates it considers reasonable or that particular types of coverage will be available. GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS Many aspects of the Company's operations are affected by domestic and foreign political developments and are subject to numerous domestic and foreign governmental regulations that may relate directly or indirectly to the contract drilling industry. The regulations applicable to the Company's operations include certain regulations that control the discharge of materials into the environment or require remediation of contamination, under certain circumstances. Usually these environmental laws and regulations impose "strict liability," rendering a person liable without regard to negligence or fault on the part of such person. Such environmental laws and regulations may expose the Company to liability for the conduct of, or conditions caused by, others, or for acts of the Company that were in compliance with all applicable laws at the time such acts were performed. It has been the Company's experience that environmental laws, rules and regulations of the United States are more stringent than those found in foreign jurisdictions, and therefore the requirements of foreign jurisdictions do not, in general, impose an additional compliance burden on the Company. The U.S. Oil Pollution Act of 1990 ("OPA '90") and the regulations promulgated pursuant thereto impose certain additional operational requirements on the Company's domestic offshore rigs and govern liability for leaks, spills and blowouts. Regulations under OPA '90 may increase the level of financial assurance required of owners and operators of rigs in the waters of the United States. The Company has monitored these regulations and does not believe that they are likely to have a material adverse effect on the Company's financial condition or results of operations. 8 10 The Company has made and will continue to make expenditures in its efforts to comply with environmental requirements. The Company does not believe that it has to date expended material amounts in connection with such activities or that compliance with such requirements will have a material adverse effect upon the capital expenditures, results of operations or competitive position of the Company. Although such requirements do have a substantial impact upon the energy and energy services industries, generally they do not appear to affect the Company any differently or to any greater or lesser extent than other companies in the energy services industry. The modification of existing laws or regulations or the adoption of new laws or regulations curtailing exploratory or development drilling for oil and gas for economic, environmental or other reasons could have a material adverse effect on the Company's operations by limiting drilling opportunities. LIMITATION ON USE OF NET OPERATING LOSS CARRYFORWARDS If a corporation undergoes an "ownership change" within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), the corporation's right to use its then-existing net operating loss carryforwards ("NOLs") (and certain other tax attributes), for both regular tax and alternative minimum tax purposes, during each future year is limited to a percentage (currently approximately six percent) of the fair market value of such corporation's stock immediately before the ownership change (the "Section 382 Limitation"). In general, there is an "ownership change" under Section 382 of the Code if over a three-year period certain stockholders increase their percentage ownership of a corporation (with NOLs) by more than 50 percent. To the extent that taxable income exceeds the Section 382 Limitation in any year subsequent to the ownership change, such excess income may not be offset by NOLs from years prior to the ownership change. To the extent the amount of taxable income in any subsequent year is less than the Section 382 Limitation for such year, the Section 382 Limitation for future years is correspondingly increased. There is generally no restriction on the use of NOLs arising after the ownership change, although Section 382 of the Code applies anew each time there is an ownership change. An ownership change for purposes of Section 382 of the Code took place on September 15, 1994, the date of the merger of Chiles into Noble Offshore Corporation ("NOC"). The annual Section 382 Limitation attributable to pre-merger carryforwards of Noble Drilling was $26.8 million at December 31, 1994. The annual Section 382 Limitation attributable to NOC is $17.1 million. The Section 382 Limitations may limit the ability of Noble Drilling and NOC to use their respective NOLs in future years, although the actual effect, if any, of such limitations will depend on the respective profitability of Noble Drilling and NOC in future years. The Company does not believe that any Section 382 Limitation resulting from such merger or from any prior ownership changes will have a material adverse effect on the Company's ability to utilize its NOLs. At December 31, 1994, Noble Drilling had approximately $112.0 million of NOLs which expire in the years 2000 through 2009, and NOC had approximately $68.4 million of NOL's which expire in the years 2004 through 2009. POTENTIAL EXPIRATION OF CONTRACTS; ABSENCE OF CONTRACTS In general, the Company's drilling contracts extend over a period of time covering either the drilling of a single well or the drilling of a group of wells for a stated term. Accordingly, although it varies among markets in which the Company is active, the Company's contracts are typically for a primary term of less than one year. Twenty of the Company's offshore rigs are currently operating under contracts that may expire as early as the end of the second quarter of 1995. Although the Company anticipates that, upon expiration of any such contracts, the Company will be able to enter into new contracts for most of such rigs on terms acceptable to the Company, there can be no assurance that the Company will be successful in such regard. The inability of the Company to keep its currently operating rigs working at satisfactory rates, either under extension of the existing contracts or under replacement contracts, could materially and adversely affect the Company's results of operations and financial condition. 9 11 USE OF PROCEEDS The net proceeds from the sale of the Common Stock to the Purchaser pursuant to the agreement described under "Standby Arrangements" will be used to fund the redemption of any $2.25 Preferred Shares not surrendered for conversion. Any excess net proceeds, resulting from the Purchaser remitting certain amounts to the Company (see "Standby Arrangements"), will be used for general corporate purposes and, pending such uses, are anticipated to be invested in short-term, interest-bearing investments. PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY The Common Stock is traded in the NASDAQ National Market System under the symbol "NDCO." The following table sets forth for the periods indicated the high and low sales prices of the Common Stock as reported by the NASDAQ National Market System.
COMMON STOCK ------------------- HIGH LOW ------ ------ 1993 First Quarter................................................ $ 6 $3 5/8 Second Quarter............................................... 8 3/4 5 1/2 Third Quarter................................................ 10 1/2 7 5/8 Fourth Quarter............................................... 11 1/8 7 1/8 1994 First Quarter................................................ 9 1/8 6 3/8 Second Quarter............................................... 8 6 3/8 Third Quarter................................................ 8 3/8 6 1/4 Fourth Quarter............................................... 7 5/8 5 1/4 1995 First Quarter................................................ 6 1/2 5 Second Quarter (through May 11th)............................ 7 1/4 5 7/8
On May 11, 1995, the reported last sale price of the Common Stock, as reported in the NASDAQ National Market System, was $6.75 per share. As of that date, there were approximately 2,390 holders of record of Common Stock. The Company has not paid any cash dividends on the Common Stock since becoming a publicly held corporation in October 1985 and does not anticipate paying dividends on the Common Stock at any time in the foreseeable future. The outstanding $1.50 Convertible Preferred Stock of the Company has priority as to dividends over the Common Stock, and no dividend (other than dividends payable solely in Common Stock) may be declared, paid or set apart for payment on the Common Stock unless all accrued and unpaid dividends on the $1.50 Convertible Preferred Stock have been paid or declared and set apart for payment. 10 12 CAPITALIZATION The following table sets forth the consolidated capitalization of the Company at March 31, 1995, and as adjusted to give effect to the assumed conversion of all the outstanding $2.25 Preferred Shares into 11,192,474 shares of Common Stock, net of certain expenses associated therewith.
MARCH 31, 1995 ------------------------ AS ACTUAL ADJUSTED --------- --------- (IN THOUSANDS) SHORT-TERM DEBT AND CURRENT INSTALLMENTS OF LONG TERM-DEBT......... $ 3,700 $ 3,700 ========= ========= LONG-TERM DEBT(1) U.S. Government Guaranteed Ship Financing Sinking Fund Bonds..... $ 1,546 $ 1,546 9 1/4% Senior Notes Due 2003..................................... 125,000 125,000 --------- --------- Total long-term debt..................................... 126,546 126,546 --------- --------- SHAREHOLDERS' EQUITY(2) Preferred stock -- $1.00 par value; 15,000,000 shares authorized; 2,065,238 shares of $2.25 Convertible Exchangeable Preferred Stock(3), actual, and none as adjusted, issued and outstanding; 4,025,000 shares of $1.50 Convertible Preferred Stock(4), actual and as adjusted, issued and outstanding...... 6,090 4,025 Common Stock -- $.10 par value; 200,000,000 shares authorized; 83,188,121 shares issued and 83,149,621 shares outstanding, actual, and 94,380,595 shares issued and 94,342,095 shares outstanding, as adjusted...................................... 8,319 9,438 Capital in excess of par value(5)................................ 588,699 588,613 Minimum pension liability........................................ (3,825) (3,825) Cumulative translation adjustment................................ (1,794) (1,794) Unrealized losses on marketable securities....................... (936) (936) Accumulated deficit.............................................. (71,528) (71,528) Treasury stock, at cost.......................................... (270) (270) --------- --------- Total shareholders' equity............................... 524,755 523,723 --------- --------- TOTAL CAPITALIZATION............................................... $ 651,301 $ 650,269 ========= =========
- --------------- (1) At March 31, 1995, the Company had lines of credit totaling $26,000,000 and letter of credit facilities totaling $5,700,000, subject to the Company's maintenance of certain levels of collateral. Based on levels of collateral at March 31, 1995, the Company had $26,000,000 available under these lines of credit and $2,700,000 available to support the issuance of letters of credit. (2) Excludes, as of March 31, 1995, shares reserved for issuance as follows: (i) 2,966,997 shares of Common Stock under the Company's employee stock option plans, (ii) 325,000 shares of Common Stock under the Company's non-employee director stock option plan, (iii) 160,000 shares of Common Stock under certain non-employee director stock option agreements, (iv) 11,192,474 shares of Common Stock upon conversion of the $2.25 Preferred Shares, which have been called for redemption on June 1, 1995, and (v) 9,839,515 shares of Common Stock upon conversion of the $1.50 Convertible Preferred Stock. In addition, the Company has reserved for issuance in connection with certain contingent obligations relating to the Triton acquisition up to 254,551 shares of Common Stock. (3) The outstanding $2.25 Convertible Exchangeable Preferred Stock has an aggregate liquidation preference of $51,630,950 and has been called for redemption by the Company on June 1, 1995. (4) The $1.50 Convertible Preferred Stock has an aggregate liquidation preference of $100,625,000 and cannot be called for redemption prior to December 31, 1996. (5) Under the Standby Agreement with the Purchaser, if any shares of $2.25 Convertible Exchangeable Preferred Stock are redeemed, the Purchaser has agreed, subject to the terms of the Standby Agreement, to purchase from the Company the number of shares of Common Stock equal to the number of shares that would have been issued had the redeemed shares instead been converted, at a purchase price equal to the aggregate redemption price paid by the Company for the redeemed shares. Any such purchase will result in the payment by the Company of certain additional fees to the Purchaser. See "Standby Arrangements." 11 13 SELECTED FINANCIAL DATA The following selected financial data are derived from (i) the Company's audited consolidated financial statements for the years ended December 31, 1994, 1993, and 1992 and (ii) the Company's unaudited consolidated financial statements for the three-month periods ended March 31, 1995 and 1994. Such financial data reflect (a) the merger of Chiles into a subsidiary of the Company on September 15, 1994, (b) the Triton acquisition on April 22, 1994 and (c) the acquisition by the Company of certain assets from The Western Company of North America on October 7, 1993 (the "Western acquisition"). The Chiles merger is accounted for as a "pooling of interests" which results in the historical financial statements being restated for all periods presented. Each of the Triton acquisition and the Western acquisition is accounted for as a "purchase" transaction from the date of consummation thereof. The following summary consolidated financial data should be read in conjunction with the financial statements and notes thereto incorporated by reference in this Prospectus. COMPANY
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ------------------- ------------------------------ 1995 1994 1994 1993 1992 -------- -------- -------- -------- -------- (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) STATEMENT OF OPERATIONS DATA: Operating revenues.................... $ 85,096 $ 78,921 $351,988 $264,531 $184,166 Operating income (loss)(1)............ $ 2,013 $ 10,362 $ 18,163 $ 28,909 $(30,259) Net (loss) income..................... $ (661) $ 8,121 $ 21,523 $ 22,852 $(43,350) Preferred stock dividends............. $ (2,670) $ (3,191) $(12,764) $ (7,936) $ (6,728) Net (loss) income applicable to common shares............................. $ (3,331) $ 4,930 $ 8,759 $ 14,916 $(50,078) Net (loss) income applicable to common shares per share(2)(3)............. $ (0.06) $ 0.06 $ 0.11 $ 0.22 $ (1.05) Weighted average common shares outstanding........................ 80,066 76,928 77,576 66,923 47,762 BALANCE SHEET DATA (AT END OF PERIOD): Working capital....................... $152,107 $131,083 $157,885 $150,535 $ 42,993 Total assets.......................... $731,618 $706,235 $739,889 $696,553 $456,529 Long-term debt........................ $126,546 $127,138 $126,546 $127,144 $ 87,280 Shareholders' equity.................. $524,755 $521,447 $527,611 $516,770 $301,634
- --------------- (1) Effective January 1, 1995, the Company revised its estimates of salvage values and remaining depreciable lives of certain refurbished rigs to better reflect their economic lives and to be more consistent with other similar assets owned by the Company. The effect of this change in estimates was a decrease in the net loss applicable to common shares for the three-month period ended March 31, 1995 of $1.1 million, or $0.01 per share. If the change in estimates had been made on January 1, 1994, net income applicable to common shares for the three-month period ended March 31, 1994 would have been increased by $800,000, or $0.01 per share. (2) In March 1995, an aggregate of 923,862 shares of the $2.25 Preferred Shares were converted into 5,006,830 shares of Common Stock. The Company paid an aggregate of approximately $1.5 million in cash in connection with the conversion ("Preferred Conversion Payment"). The Preferred Conversion Payment was accounted for as a reduction of net earnings applicable to common shares for purposes of calculating the net loss applicable to common shares per common share. This accounting treatment increased the net loss applicable to common shares per share from $0.04 to $0.06 for the three-month period ended March 31, 1995. (3) Net income applicable to common shares per share before extraordinary item was $0.20 for the year ended December 31, 1993. Loss applicable to common shares per share from discontinued operations was $(0.07) for the year ended December 31, 1992. 12 14 The following selected unaudited pro forma consolidated financial data give effect to the consummation of the Triton acquisition, which has been accounted for as a purchase, as if the transaction had occurred on January 1, 1994. The following unaudited pro forma statement of operations data do not purport to be indicative of the results that would have actually been obtained if the transaction had been in effect as of the date indicated or that might be obtained in the future. COMPANY (INCLUDING TRITON)(PRO FORMA)
YEAR ENDED DECEMBER 31, 1994 -------------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) HISTORICAL -------------------- PRO FORMA THE ACQUISITION AS COMPANY TRITON(1) ADJUSTMENTS ADJUSTED -------- ------- ----------- --------- OPERATING REVENUES Contract drilling services........................ $249,820 $ -- $ -- $ 249,820 Labor contract drilling services.................. 36,203 -- -- 36,203 Turnkey drilling services......................... 56,380 22,458 -- 78,838 Engineering and consulting services............... 3,796 1,536 -- 5,332 Other revenue..................................... 5,789 2,194 (53)(2) 7,930 -------- ------- ----------- --------- 351,988 26,188 (53) 378,123 -------- ------- ----------- --------- OPERATING COSTS AND EXPENSES Contract drilling services........................ 160,109 -- -- 160,109 Labor contract drilling services.................. 28,355 -- -- 28,355 Turnkey drilling services......................... 46,886 18,989 -- 65,875 Engineering and consulting services............... 2,958 756 -- 3,714 Other expense..................................... 4,900 1,376 (2)(2) 6,274 Selling, general and administrative............... 39,519 4,476 (1,070)(3) 42,925 Depreciation and amortization..................... 47,606 236 9(4) 47,851 Restructuring charges/asset write-downs........... 3,661 -- -- 3,661 Minority interest................................. (169) 493 -- 324 -------- ------- ----------- --------- 333,825 26,326 (1,063) 359,088 -------- ------- ----------- --------- OPERATING INCOME (LOSS)............................. 18,163 (138) 1,010 19,035 OTHER INCOME (EXPENSE) Interest expense.................................. (12,351) -- -- (12,351) Interest income................................... 5,640 123 -- 5,763 Other, net........................................ 15,743 (2,361) 51(2) 15,653 2,220(5) -------- ------- ----------- --------- INCOME BEFORE INCOME TAXES.......................... 27,195 (2,376) 3,281 28,100 INCOME TAX PROVISION................................ (5,672) (115) (696)(6) (6,483) -------- ------- ----------- --------- NET INCOME (LOSS)................................... 21,523 (2,491) 2,585 21,617 PREFERRED STOCK DIVIDENDS........................... (12,764) -- -- (12,764) -------- ------- ----------- --------- NET INCOME (LOSS) APPLICABLE TO COMMON SHARES....... $ 8,759 $(2,491) $ 2,585 $ 8,853 ======== ======= ========== ========= NET INCOME APPLICABLE TO COMMON SHARES PER SHARE.... $ 0.11 $ 0.11 ======== ========= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING.......... 77,576 188 77,764
- --------------- (1) This column represents the operating results for Triton for the first three months of 1994. The operating results of Triton from April 1 to April 22, 1994 (the date of consummation of the Triton acquisition) are included under "The Company" column. (2) To reclassify the operating results of Triton's oil and gas activities, as these activities are not an ongoing business line of the Company. (3) To eliminate a nonrecurring stock option buyout effected by Triton in March 1994 in connection with the Triton acquisition. (4) To record amortization of $9,000 for goodwill associated with the Triton acquisition. (5) To eliminate the write-off of $2,220,000 of notes receivable from a partnership that was disposed of prior to the Triton acquisition. (6) To record the incremental tax effect of the Triton acquisition adjustments. 13 15 DESCRIPTION OF CAPITAL STOCK The Company has 215,000,000 authorized shares of stock, consisting of (i) 200,000,000 shares of Common Stock and (ii) 15,000,000 shares of preferred stock having a par value of $1.00 per share, of which two series have been heretofore designated. As of May 1, 1995, there were outstanding 83,175,625 shares of Common Stock, 2,065,238 shares of $2.25 Preferred Stock, and 4,025,000 shares of $1.50 Convertible Preferred Stock ("$1.50 Convertible Preferred Stock"). In addition, as of May 1, 1995, the Company had reserved for issuance (i) 2,949,497 shares of Common Stock under the Company's employee stock option plans, (ii) 325,000 shares of Common Stock under the Company's non-employee director stock option plan, (iii) 160,000 shares of Common Stock under certain non-employee director stock option agreements, (iv) 11,192,474 shares of Common Stock upon conversion of the $2.25 Preferred Shares, which have been called for redemption on June 1, 1995, and (v) 9,839,515 shares of Common Stock upon conversion of the $1.50 Convertible Preferred Stock. In addition, the Company has reserved for issuance in connection with certain contingent obligations relating to the Triton acquisition up to 254,551 shares of Common Stock. The following summary description of the capital stock of the Company is qualified in its entirety by reference to the Restated Certificate of Incorporation of Noble Drilling, as amended (the "Certificate of Incorporation"), a copy of which has been filed or incorporated by reference as an exhibit to the Registration Statement. Unless otherwise specified, the information contained in this Description of Capital Stock section assumes that the redemption by the Company of the $2.25 Preferred Stock occurs on the Redemption Date. COMMON STOCK Holders of Common Stock are entitled to one vote per share on each matter to be voted upon by the stockholders of the Company. Dividends may be paid to the holders of Common Stock when, as and if declared by the Board of Directors of Noble Drilling out of funds legally available for such purpose, subject to any preferential cumulative dividend rights of any preferred stock of the Company, including the $1.50 Convertible Preferred Stock, outstanding at the time. Holders of Common Stock have no conversion, redemption, cumulative voting or preemptive rights. In the event of any liquidation, dissolution or winding up of the Company, after payment or provision for payment of the debts and other liabilities of the Company and the preferential amounts to which the holders of the $1.50 Convertible Preferred Stock, or any other series or class of the Company's stock hereafter issued that ranks senior as to liquidation rights to the Common Stock are entitled, the holders of Common Stock will be entitled to share ratably in any remaining assets of the Company. All outstanding shares of Common Stock are, and the shares of Common Stock to be issued upon conversion of the $2.25 Preferred Stock and the $1.50 Convertible Preferred Stock or upon issuance by the Company pursuant to the Standby Agreement (see "Standby Arrangements") will be, when issued, duly and validly issued, fully paid and nonassessable. The Common Stock is quoted in the NASDAQ National Market System under the symbol "NDCO." The transfer agent and registrar for the Common Stock is Liberty Bank and Trust Company of Oklahoma City, N.A. $1.50 CONVERTIBLE PREFERRED STOCK The Board of Directors of the Company is authorized by the Certificate of Incorporation to issue preferred stock in one or more series and to fix for each such series such designation, voting powers, if any, preferences and relative, participating, optional or other special rights, and such qualifications, limitations and restrictions thereof, as are stated and adopted by resolution of the Board without further stockholder approval. No shares of preferred stock other than the $2.25 Preferred Stock, which has been called for redemption on the Redemption Date, and the $1.50 Convertible Preferred Stock are currently issued or outstanding. 14 16 The holders of the $1.50 Convertible Preferred Stock have no preemptive rights with respect to any shares of capital stock of the Company or any other securities of the Company convertible into or carrying rights or options to purchase any such shares. The $1.50 Convertible Preferred Stock is not subject to any sinking fund or other obligation of the Company to redeem or retire the $1.50 Convertible Preferred Stock. Ranking. The $1.50 Convertible Preferred Stock ranks senior to the Common Stock with respect to the payment of dividends and upon liquidation, dissolution or winding up of the Company. Dividends. Holders of the $1.50 Convertible Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors of the Company, out of funds at the time legally available therefor, annual cash dividends at the rate of $1.50 per share, payable quarterly. If dividends are not paid in full, or declared in full and sums set apart for the payment thereof, upon the $1.50 Convertible Preferred Stock and upon any other capital stock ranking on a parity as to dividends with the $1.50 Convertible Preferred Stock, all dividends declared upon shares of $1.50 Convertible Preferred Stock and such other parity stock will be declared and paid pro rata so that in all cases the amount of dividends declared per share on the $1.50 Convertible Preferred Stock and such other parity stock will bear to each other the same ratio that accrued and unpaid dividends per share on the shares of $1.50 Convertible Preferred Stock and such other parity stock bear to each other. Except as set forth above, unless full cumulative dividends on all outstanding shares of the $1.50 Convertible Preferred Stock have been paid or declared and sums set aside for the payment thereof, dividends (other than dividends paid in Common Stock or other stock ranking junior to the $1.50 Convertible Preferred Stock as to dividends and upon liquidation, dissolution or winding up) may not be declared or paid or set apart for payment, and other distributions may not be made upon the Common Stock or on any other stock of the Company ranking junior to the $1.50 Convertible Preferred Stock as to dividends, or upon liquidation, dissolution or winding up, nor may any Common Stock or any other stock of the Company ranking junior to or on a parity with the $1.50 Convertible Preferred Stock as to dividends or upon liquidation, dissolution or winding up be redeemed, purchased or otherwise acquired for any consideration by the Company (except by conversion into or exchange for stock of the Company ranking junior to the $1.50 Convertible Preferred Stock as to dividends and upon liquidation, dissolution or winding up). Liquidation Rights. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of shares of $1.50 Convertible Preferred Stock will be entitled to receive out of the assets of the Company available for distribution to stockholders the liquidation preference of $25.00 per share plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid to the payment date before any payment or distribution of assets is made to holders of Common Stock or of any other class of stock of the Company ranking junior to the $1.50 Convertible Preferred Stock upon liquidation, dissolution or winding up. After payment of the full amount of the liquidation preference to which they are entitled, the holders of shares of $1.50 Convertible Preferred Stock will not be entitled to any further participation in any distribution of assets by the Company. Conversion Rights. The holder of shares of the $1.50 Convertible Preferred Stock has the right, at the holder's option, to convert any or all such shares into Common Stock at any time at a rate (subject to adjustment in the case of certain dilutive events) of 2.4446 shares of Common Stock for each share of $1.50 Convertible Preferred Stock (equivalent to a conversion price of $10.23 per share of Common Stock). Right of Redemption of the Company. Shares of $1.50 Convertible Preferred Stock are not redeemable prior to December 31, 1996. Shares of $1.50 Convertible Preferred Stock are otherwise redeemable at the option of the Company, in whole or in part, at any time or from time to time, out of funds legally available therefor, on or after December 31, 1996, at the redemption prices per share of $1.50 Convertible Preferred Stock set forth below during the 12-month periods beginning on December 31 of the years shown below, plus in each case an amount equal to accrued and unpaid dividends, if 15 17 any, to (and including) the Redemption Date, whether or not earned or declared (the "Redemption Price").
PRICE PER YEAR SHARE - ----------------------------------- ------- 1996............................... $ 26.05 1997............................... 25.90 1998............................... 25.75 1999............................... 25.60 PRICE PER YEAR SHARE - ----------------------------------- ------- 2000............................... $ 25.45 2001............................... 25.30 2002............................... 25.15 2003 and thereafter................ 25.00
There is no mandatory redemption or sinking fund obligation with respect to the $1.50 Convertible Preferred Stock. In the event that the Company has failed to pay accrued and unpaid dividends on the $1.50 Convertible Preferred Stock, it may not redeem less than all of the then outstanding shares of the $1.50 Convertible Preferred Stock until all such accrued and unpaid dividends and the then current quarterly dividends have been paid in full. Voting Rights. The holders of the $1.50 Convertible Preferred Stock will have no voting rights, except as described below or as required by law. In exercising any such vote, each outstanding share of $1.50 Convertible Preferred Stock will be entitled to one vote, excluding shares held by the Company or any entity controlled by the Company, which shares shall have no voting rights. Whenever dividends on the $1.50 Convertible Preferred Stock have not been paid in an aggregate amount equal to at least six quarterly dividends on such shares (whether or not consecutive), the holders of the $1.50 Convertible Preferred Stock (voting separately as a class with the holders of any stock ranking on a parity as to dividends with the $1.50 Convertible Preferred Stock on which like voting rights have been conferred and are exercisable) will be entitled to elect two directors to the Board of Directors either by written consent or at any meeting of stockholders of the Company at which directors are to be elected held during the period such dividends remain in arrears. Such voting rights will terminate when all such dividends accrued and in default have been paid in full or declared and funds set apart for payment in full. The term of office of all directors so elected will terminate immediately upon such payment or setting apart for payment. In addition, without the affirmative vote or consent of the holders of at least 66 2/3 percent of shares of the $1.50 Convertible Preferred Stock then outstanding, voting separately as a class, the Company may not (i) authorize, create, issue or increase the authorized number of shares of any class or classes or series of stock, or any security convertible into stock of such class or series, ranking prior to the $1.50 Convertible Preferred Stock either as to dividends or upon liquidation, dissolution or winding up of the Company, (ii) amend, alter or repeal (whether by merger, consolidation or otherwise) any of the provisions of the Certificate of Incorporation (including the Certificate of Designation) of the Company so as to affect adversely any right, preference, privilege or voting power of the $1.50 Convertible Preferred Stock or the holders thereof or (iii) authorize any reclassification of the $1.50 Convertible Preferred Stock. Without the affirmative vote or consent of holders of at least 50 percent of the shares of $1.50 Convertible Preferred Stock then outstanding, the Company may not increase the amount of authorized $1.50 Convertible Preferred Stock or create additional classes of stock or issue series of capital stock ranking on a parity with the $1.50 Convertible Preferred Stock with respect to the payment of dividends or upon liquidation, dissolution and winding up of the Company. However, the Company may increase the amount of authorized preferred stock or create additional classes of stock or issue series of capital stock ranking junior to the $1.50 Convertible Preferred Stock with respect to the payment of dividends and upon liquidation, dissolution and winding up of the Company without the consent of any holder of $1.50 Convertible Preferred Stock. Special Conversion Rights. The $1.50 Convertible Preferred Stock has a special conversion right that becomes effective upon the occurrence of certain types of significant transactions affecting ownership or control of the Company or the market for the Common Stock. The purpose of the special conversion right is to provide (subject to certain exceptions) partial loss protection upon the occurrence 16 18 of a Change of Control or a Fundamental Change (each as defined) at a time when the Market Value (as defined) of the Common Stock issuable upon conversion by a holder at the prevailing conversion price is less than the amount to which the holder would be entitled upon redemption. In such situations, the special conversion right would, for a limited period, reduce the then prevailing conversion price to the higher of the Market Value of the Common Stock or a minimum conversion price of $6.53 per share of Common Stock, subject to certain adjustments (and increase the equivalent conversion ratio accordingly). Consequently, to the extent that the Market Value of the Common Stock is less than the minimum conversion price, a holder will have a lesser degree of protection from loss upon exercise of a special conversion right. The $1.50 Convertible Preferred Stock is traded through the NASDAQ National Market System under the symbol "NDCOO." The transfer agent, conversion agent and registrar for the $1.50 Convertible Preferred Stock is Liberty Bank and Trust Company of Oklahoma City, N.A. RESTRICTIONS ON DIVIDENDS Senior Note Indenture. Certain provisions of the indenture (the "Senior Note Indenture") governing the Company's outstanding 9 1/4% Senior Notes Due 2003 (the "Senior Notes") restrict the Company's ability to pay cash dividends on Common Stock and $1.50 Convertible Preferred Stock. Under the Senior Note Indenture, the Company may not make certain Restricted Payments (as defined in the Senior Note Indenture), including dividends and other payments with respect to Common Stock and $1.50 Convertible Preferred Stock, if (i) a default under the Senior Note Indenture is continuing or would result from such Restricted Payment; (ii) for the 12-month period ending on the last day of the Company's most recently completed fiscal quarter, the Company's Consolidated Interest Coverage Ratio (as defined in the Senior Note Indenture) was less than (A) 2.0:1, for any such payment occurring on or prior to December 31, 1995, or (B) 2.5:1, for any such payment occurring on or after January 1, 1996; or (iii) after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments since October 7, 1993, the date of issuance of the Senior Notes, exceeds the sum (such sum, the "Restricted Payment Basket") of (A) 50 percent of the Aggregate Consolidated Net Income (as defined in the Senior Note Indenture) of the Company (or if such consolidated net income is a deficit, minus 100 percent of such deficit) accrued during the period beginning on October 1, 1993 and ending on the last day of the fiscal quarter ending immediately prior to the date of such proposed Restricted Payment; (B) the aggregate net cash proceeds received by the Company from the issuance or sale of certain capital stock of the Company subsequent to October 7, 1993 and the liability (expressed as a positive number) of any indebtedness of the Company, or the carrying value of any redeemable stock of the Company (including the $2.25 Preferred Stock), which has been converted into shares of Common Stock subsequent to October 7, 1993; and (C) $10,000,000. The payment of dividends on the $1.50 Convertible Preferred Stock constitutes Restricted Payments for all purposes of the Senior Note Indenture and, accordingly, is subject to the Restricted Payment Basket. To the extent that the payment of dividends on Common Stock, if any were to be made, or the payment of accrued dividends on the $1.50 Convertible Preferred Stock would result in the aggregate amount of all Restricted Payments made by the Company exceeding the Restricted Payment Basket, and during such times that the aggregate amount of all Restricted Payments exceeds the Restricted Payment Basket, such dividend payments on Common Stock and $1.50 Convertible Preferred Stock will be prohibited under the provisions of the Senior Note Indenture. As of March 31, 1995, the Company's Consolidated Interest Coverage Ratio was 3.28:1 and the amount of the Restricted Payment Basket was $39.1 million. As of that same date, the Company had made aggregate Restricted Payments (consisting of regular dividends on the $2.25 Preferred Stock and $1.50 Convertible Preferred Stock and the Preferred Conversion Payment) since October 7, 1993 of $14.4 million, leaving $24.7 million of the Restricted Payment Basket available, as of March 31, 1995, for Restricted Payments. Annual dividends on the currently outstanding shares of $1.50 Convertible Preferred Stock total $6,037,500. 17 19 Giving effect to an assumed full conversion on May 31, 1995 of the $2.25 Preferred Shares, and assuming (i) the amount of the Restricted Payment Basket remains unchanged from the date of this Prospectus through June 2, 1995 (the next succeeding business day after the Redemption Date) and (ii) no Restricted Payments are made during such period other than regular cash dividends on the $1.50 Convertible Preferred Stock, the amount of the Restricted Payment Basket available for Restricted Payments as of June 2, 1995 would be $73.6 million. Credit Agreement. On June 16, 1994, the Company entered into a credit agreement (the "Credit Agreement") with two banks providing for a $25 million revolving line of credit. Certain provisions of the Credit Agreement restrict the Company's ability to pay cash dividends on Common Stock and $1.50 Convertible Preferred Stock. Under the Credit Agreement, the Company may not make certain Restricted Payments (as defined in the Credit Agreement), including dividends and other payments with respect to Common Stock and $1.50 Convertible Preferred Stock, if (i) a default under the Credit Agreement is continuing or would result from such Restricted Payment; (ii) the Company's tangible net worth is less than the sum of (A) $280,000,000, plus (B) 50 percent of any positive net income of the Company computed on a cumulative basis for the period beginning April 30, 1994 and ending on the last day of the fiscal quarter immediately preceding the date of any determination, with no negative adjustment to be made in the event net income is a deficit figure for any fiscal period, plus (C) 85 percent of the aggregate amount of net non-cash proceeds, and 100 percent of net cash proceeds, to the Company from the issuance or sale after April 30, 1994, and determined as of the last day of each fiscal quarter subsequent to March 31, 1994, of (x) shares of Common Stock or warrants, rights or options to purchase or acquire Common Stock and (y) shares of preferred stock of the Company, provided that such 85 percent rate will increase to 100 percent at such time as the aggregate of all net non-cash proceeds from the sale by the Company of Common Stock, or warrants, rights or options to purchase or acquire Common Stock, exceeds $300,000,000; or (iii) the Company's debt to capital ratio exceeds 0.35:1. As of March 31, 1995, the Company's tangible net worth was approximately $519.5 million, and the minimum tangible net worth required under the provisions of the Credit Agreement to allow Restricted Payments, calculated as set forth in the Credit Agreement and as generally described above, was $445.3 million. As of March 31, 1995, the Company's debt to capital ratio was 0.20:1. FOREIGN OWNERSHIP The Certificate of Incorporation contains provisions that limit foreign ownership of the stock of the Company. These provisions are to protect the ability of the Company to continue to own its mobile offshore drilling units as U.S. flag vessels and to comply with covenants of the Company to maintain U.S. citizenship (as defined) that are contained in certain financing agreements. In order to continue to enjoy the benefits of U.S. flag registry for its vessels, the Company must maintain "United States citizenship" as defined in the Shipping Act, 1916, as amended (the "Shipping Act"). A corporation is not considered a U.S. citizen for these purposes unless, among other things, the controlling interest therein (a majority in the case of non-coastwise trade) is owned by U.S. citizens. Under regulations adopted by the U.S. Maritime Administration to implement the citizenship requirements, the "controlling interest" test is applied to each class of stock of the Company. The Common Stock and the Company's preferred stock (combining all series of preferred stock) are considered to be separate classes of stock for this purpose. Under the provisions of the Certificate of Incorporation, (i) any transfer, or attempted or purported transfer, of any shares of stock of the Company that would result in the ownership or control by one or more persons who is not a U.S. citizen for purposes of the Shipping Act of an aggregate percentage of the shares of any class of stock in excess of a fixed percentage (the "Permitted Percentage") that is equal to 90 percent of the percentage that would prevent the Company from being a U.S. citizen (currently 50 percent) for purposes of the Shipping Act, will, for so long as such excess shall exist, be void and ineffective as against the Company, and (ii) if at any time ownership of shares of stock of the 18 20 Company (either of record or beneficial) by persons other than U.S. citizens exceeds the Permitted Percentage, the Company may withhold payment of dividends on such shares determined to be in excess of the Permitted Percentage and may suspend voting rights attributable to such shares. The shares subject to any such withholding of dividends or suspension of voting rights would be those foreign-owned shares that the Board of Directors of the Company determines became so owned most recently. The Permitted Percentage is currently 45 percent. The certificates representing the shares of Common Stock will bear a legend concerning the restrictions on ownership by persons other than U.S. citizens. The Company has instructed its transfer agent for the Common Stock to attempt to ensure the applicable transfer instructions are enforced. CERTAIN CORPORATE GOVERNANCE PROVISIONS Stockholder Consent Action Prohibited. The Certificate of Incorporation and Bylaws of the Company require that, subject to the possible rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, stockholder action be taken only at an annual meeting or at a special meeting of stockholders called by the Chairman of the Board or the President of the Company or by a majority of the entire Board of Directors of the Company, and prohibit stockholder action by written consent in lieu of a meeting. Stockholders are not permitted to call a special meeting of stockholders or to require that the Board of Directors of the Company call such a special meeting. Classified Board and Other Provisions. The Certificate of Incorporation and Bylaws of the Company provide that, subject to the possible rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, the Board of Directors of the Company will be composed of not less than three directors, with the exact number of directors fixed from time to time by resolution adopted by vote of a majority of the entire Board of Directors, and is divided into three classes of directors, each class to be as nearly equal in number as possible. The term of office of one class of directors expires each year in rotation so that one class is elected at each annual meeting of stockholders for a full three-year term. The Certificate of Incorporation and Bylaws of the Company provide that a director may be removed only for cause as defined in the Certificate of Incorporation, and only by the affirmative vote of the holders of a majority of the combined voting power of the capital stock of the Company entitled to vote generally in the election of directors ("Voting Stock"). The Certificate of Incorporation provides that, subject to the possible rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, a vacancy on the Board resulting from any increase in the number of directors may be filled by the Board or in the manner provided in the Bylaws of the Company, that any other vacancy shall be filled only by an affirmative vote of a majority of directors remaining in office, even though less than a quorum, and that the newly-elected director shall serve for the unexpired term of his predecessor in office. The Bylaws provide that if any vacancy resulting from an increase in the number of directors is not filled by the remaining directors it will be filled by the stockholders of the Company at the next annual meeting or at a special meeting of stockholders called for that purpose. An anti-takeover effect is accomplished by these provisions in that they tend to preclude a third party from removing incumbent directors and simultaneously gaining control of the Board by filling the vacancies created by removal with its own nominees unless such third party controls at least 80 percent of the combined voting power of the Voting Stock (the ownership level required to amend the Certificate Incorporation and Bylaws in this respect). Under these provisions, together with the classified board provisions described above, it would take at least two elections of directors for any individual or group to gain control of the Board. Fair Price Provision. The affirmative vote of the holders of at least 80 percent of the combined voting power of the Voting Stock is required to approve certain Business Combinations (as such term is defined 19 21 in the Certificate of Incorporation). The transactions included in the definition of Business Combination are those between the Company and an Interested Stockholder (as defined below) or, in certain instances, proposed by an Interested Stockholder and include: (a) a merger or consolidation of the Company, or any subsidiary having assets of $1,000,000 or more, with any Interested Stockholder or with any other corporation or entity that is, or after such merger or consolidation would be, an affiliate or associate of an Interested Stockholder; (b) the sale or other disposition by the Company, or a subsidiary, of assets of $1,000,000 or more if an Interested Stockholder (or an affiliate or associate thereof) is a party to the transaction; (c) the issuance or transfer of any securities of the Company, or a subsidiary, to an Interested Stockholder (or an affiliate or associate thereof) in exchange for cash, securities or other property (or a combination thereof) of $1,000,000 or more; (d) the adoption of any plan or proposal for the liquidation or dissolution of the Company proposed by or on behalf of an Interested Stockholder (or an affiliate or associate thereof); (e) any reclassification of securities, recapitalization, merger with a subsidiary or other transaction that has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares (or securities convertible into shares) of any class or series of stock of the Company or a subsidiary owned by an Interested Stockholder (or an affiliate or associate thereof); (f) any series or combination of transactions directly or indirectly having the same effect as any of the foregoing; or (g) any contract, agreement or other arrangement providing directly or indirectly for any of the foregoing. An "Interested Stockholder" is defined in the Certificate of Incorporation to include a beneficial owner of five percent or more of the combined voting power of the Voting Stock, other than the Company, and any affiliate of the Company who, at any time during the preceding two years, was the beneficial owner of five percent or more of the combined voting power of the Voting Stock and includes any person who is an assignee of or has succeeded to any shares of Voting Stock in a transaction not involving a public offering which were at any time within the prior two-year period beneficially owned by an Interested Stockholder. The term "beneficial owner" includes persons directly and indirectly owning or having the right to acquire or vote the stock in question. The provisions of the Certificate of Incorporation of the Company described in the preceding paragraph may have the effect of delaying, deterring or preventing a change in control of the Company. The special vote requirement of such provisions may be waived if the Business Combination is duly approved by a majority of the Disinterested Directors (as such term is defined in the Certificate of Incorporation) or if certain minimum price criteria and procedural requirements are met. There is no requirement that a Business Combination duly approved by the Disinterested Directors meet any minimum price criteria or procedural requirements. Alteration or Amendment. The approval of the holders of 80 percent or more of the combined voting power of the Voting Stock is required for the alteration, amendment or repeal of, or the adoption of any provision inconsistent with, the foregoing corporate governance provisions as stated in the Certificate of Incorporation. In addition, the affirmative vote of a majority of the entire Board may authorize the alteration, amendment or repeal of the Bylaws of the Company. Elimination of Certain Director Liability; Indemnification. The Certificate of Incorporation contains an article, which was approved by stockholders at the 1987 annual meeting of stockholders, that eliminates the personal liability of the Company's directors for monetary damages resulting from breaches of their fiduciary duty, to the extent permitted by the General Corporation Law of the State of Delaware ("DGCL"). This article eliminates the liability of each director to the Company or its stockholders for all claims for negligence or gross negligence in the performance of his duties other than the duty of loyalty. Directors remain liable to the Company and its stockholders for breaches of their duty of loyalty, as well as for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, and for transactions from which a director derives improper personal benefit. The article does not limit the liability of directors under Section 174 of the DGCL, which makes directors personally liable for unlawful dividends or unlawful stock repurchases or redemptions and expressly sets forth a negligence standard with respect to such liability. 20 22 The Certificate of Incorporation and the Bylaws of the Company contain provisions providing for the indemnification of the Company's directors and officers to the fullest extent permitted by Section 145 of the DGCL, including in circumstances in which indemnification is otherwise discretionary. The Company believes that these provisions are necessary to attract and retain qualified persons as directors and officers. The Delaware Business Combination Act. The Company is covered by Section 203 of the DGCL which provides that a corporation shall not engage in any business combination with an "interested stockholder" for a period of three years following the date that such stockholder became an interested stockholder unless: (1) prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder, (2) upon consummation of such transaction, the interested stockholder owned at least 85 percent of the voting stock of the corporation outstanding at the time (excluding, from the calculation of outstanding shares, shares beneficially owned by management, directors and certain employee stock plans), or (3) on or after such date, the business combination is (i) approved by the board of directors and (ii) authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of the outstanding voting stock other than the interested stockholder. 21 23 STANDBY ARRANGEMENTS Upon the terms and subject to the conditions contained in the Standby Agreement dated May 12, 1995 between the Company and the Purchaser (the "Standby Agreement"), the Purchaser has agreed to purchase, at a flat price of $27.10 per $2.25 Preferred Share, all $2.25 Preferred Shares properly tendered to it or to Liberty Bank and Trust Company of Oklahoma City, N.A., as Paying Agent, prior to 5:00 p.m., Central Daylight Savings Time, on the Final Conversion Date. The Purchaser may also purchase $2.25 Preferred Shares in the open market or otherwise. The Purchaser has agreed with the Company to convert all $2.25 Preferred Shares so purchased or otherwise acquired by the Purchaser into Common Stock (the "Conversion Shares"). The Conversion Shares issued to the Purchaser upon the conversion of $2.25 Preferred Shares purchased by the Purchaser pursuant to the third preceding sentence are referred to as the "Tendered Shares." In the event that less than all of the $2.25 Preferred Shares are surrendered for conversion prior to 5:00 p.m., Central Daylight Savings Time, on the Final Conversion Date, the Purchaser has agreed to purchase from the Company such number of shares (the "Purchased Shares") of Common Stock as would have been issuable upon conversion of such of the $2.25 Preferred Shares as are not surrendered for conversion prior to 5:00 p.m., Central Daylight Savings Time, on the Final Conversion Date. The price to the Purchaser of the Purchased Shares will be $4.97397 per share. The Purchaser has agreed to pay to the Company 50 percent of the excess, if any, of the aggregate proceeds received on the sale of the Tendered Shares and the Purchased Shares (net of selling concessions, transfer taxes and other directly related expenses) over $4.97397. The Company has been advised by the Purchaser that it proposes to offer for resale any shares of Common Stock purchased from the Company or acquired upon conversion as set forth on the cover page of this Prospectus. The Purchaser may also make sales of such shares to certain securities dealers at prices that may reflect concessions from the prices at which such shares are then being offered to the public. The amount of such concessions will be determined from time to time by the Purchaser. Under the terms of the Standby Agreement and as compensation for the commitment of the Purchaser thereunder, the Company has agreed to pay the Purchaser the sum of $556,711, plus an additional sum for certain Compensable Shares (as defined below). The additional sum will be paid as follows: (i) no additional sum will be paid if the total number of Compensable Shares is less than or equal to 560,000 and (ii) if the total number of Compensable Shares is greater than 560,000, the additional sum will equal $0.20 per share for all Compensable Shares plus $0.0265 per share for all Tendered Shares. Compensable Shares consist of all Conversion Shares (other than any Tendered Shares) that are resold by the Purchaser for less than $4.97397 per share plus all Purchased Shares and all Tendered Shares. The Company has also agreed to pay the reasonable out-of-pocket expenses of the Purchaser, including the fees and disbursements of Purchaser's counsel, and to pay Blue Sky fees and expenses. Pursuant to the Standby Agreement, the Company has agreed that it will not, without the written consent of the Purchaser, sell, contract to sell, or otherwise dispose of any shares of Common Stock, with certain exceptions, for a period commencing on the date of this Prospectus and ending 90 days after the Redemption Date, provided that if the Purchaser does not acquire any Purchased Shares pursuant to the Standby Agreement, the Company will no longer be bound by such restriction. The Company has agreed to indemnify the Purchaser against certain liabilities, including liabilities under the Securities Act. The Purchaser has performed investment banking services for the Company from time to time in the ordinary course of its business. Prior to the date hereof, the Company entered into individually-negotiated arrangements with certain holders of $2.25 Preferred Shares, including the Purchaser, whereby such holders converted their $2.25 Preferred Shares into Common Stock. Pursuant to such arrangements, the Purchaser was paid 22 24 $583,085.25 on March 10, 1995, in connection with its conversion of the shares of $2.25 Preferred Shares held by it. As of May 11, 1995, the Purchaser owned 10,000 $2.25 Preferred Shares. LEGAL OPINIONS The validity of the shares of Common Stock offered hereby will be passed upon for the Company by Thompson & Knight, P.C., Dallas, Texas, and certain legal matters will be passed on for the Purchaser by Cravath, Swaine & Moore, New York, New York. EXPERTS The financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K 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. The 1993 and 1992 consolidated financial statements of the Company incorporated by reference in this Prospectus have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are so incorporated herein in reliance upon the authority of said firm as experts in giving said report. 23 25 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 OR THE PURCHASER. 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 DATE HEREOF. 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 OFFER OR SOLICITATION. --------------------- TABLE OF CONTENTS
PAGE ---- Available Information................ 2 Incorporation of Certain Documents by Reference.......................... 2 The Company.......................... 4 Investment Considerations............ 5 Use of Proceeds...................... 10 Price Range of Common Stock and Dividend Policy.................... 10 Capitalization....................... 11 Selected Financial Data.............. 12 Description of Capital Stock......... 14 Standby Arrangements................. 22 Legal Opinions....................... 23 Experts.............................. 23
11,192,474 SHARES NOBLE DRILLING CORPORATION COMMON STOCK ($.10 PAR VALUE) [LOGO] - ---------------------- SALOMON BROTHERS INC - -------------------------------------------------------------------------------- PROSPECTUS DATED MAY 12, 1995 26 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Except for the SEC registration fee and the NASDAQ fee, all expenses are estimated. All such expenses will be paid by the Registrant. SEC registration fee..................................................... $ 26,052 NASDAQ fee............................................................... 17,500 Accounting fees and expenses............................................. 124,000 Legal fees and expenses.................................................. 190,000 Printing expenses........................................................ 35,000 Blue sky fees and expenses (including legal fees)........................ 8,000 Transfer agency fees and expenses........................................ 2,500 Miscellaneous............................................................ 71,948 --------- Total.......................................................... $ 475,000 =========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Registrant is a Delaware corporation. Under Section 145 of the General Corporation Law of the State of Delaware, the Registrant has the power to indemnify its directors and officers, subject to certain limitations. Reference is made to Article VI of the Bylaws of the Registrant, which Article is filed as part of Exhibit 4.7 hereto and provides for indemnification of directors and officers of the Registrant under certain circumstances. Reference is made to Section 8 of the form of Standby Agreement filed as Exhibit 1.1 hereto for provisions relating to the indemnification of directors, officers and controlling persons of the Registrant against certain liabilities, including liabilities under the Securities Act of 1933. Pursuant to the General Corporation Law of the State of Delaware, the Certificate of Incorporation of the Registrant, filed as Exhibits 4.1 through 4.6 hereto, limits the personal liability of the directors of the Registrant to the Registrant or its stockholders for monetary damages for breach of fiduciary duty under certain circumstances. The Registrant also maintains insurance to protect itself and its directors, officers, employees and agents against expenses, liabilities and losses incurred by such persons in connection with their service in the foregoing capacities. The foregoing summaries are necessarily subject to the complete text of the statute, bylaw, agreement, restated certificate of incorporation and insurance policy referred to above and are qualified in their entirety by reference thereto. II-1 27 ITEM 16. EXHIBITS. The following exhibits are filed as part of this Registration Statement:
NUMBER EXHIBIT - ------------------- ------------------------------------------------------------------------ 1.1 -- Form of Standby Agreement. 4.1 -- Restated Certificate of Incorporation of the Registrant dated August 29, 1985 (filed as Exhibit 3.7 to the Registrant's Registration Statement on Form 10 (No. 0-13857) and incorporated herein by reference). 4.2 -- Certificate of Amendment of Restated Certificate of Incorporation of the Registrant dated May 5, 1987 (filed as Exhibit 4.2 to the Registrant's Registration Statement on Form S-3 (No. 33-67130) and incorporated herein by reference). 4.3 -- Certificate of Amendment of Certificate of Incorporation of the Registrant dated August 1, 1991 (filed as Exhibit 3.16 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991 and incorporated herein by reference). 4.4 -- Certificate of Designations of $2.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share, of the Registrant, dated as of November 18, 1991 (filed as Exhibit 3.17 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991 and incorporated herein by reference.) 4.5 -- Certificate of Designations of $1.50 Convertible Preferred Stock, par value $1.00 per share, of the Registrant, dated as of September 15, 1994 (filed as Exhibit 3.8 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference). 4.6 -- Certificate of Amendment of Certificate of Incorporation of the Registrant dated September 15, 1994 (filed as Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for the three-month period ended March 31, 1995 and incorporated herein by reference). 4.7 -- Composite copy of the Bylaws of the Registrant as currently in effect (filed as Exhibit 4.8 to the Registrant's Registration Statement on Form S-3 (No. 33-67130) and incorporated herein by reference). 5.1 -- Opinion of Thompson & Knight, P.C. 23.1 -- Consent of Price Waterhouse LLP. 23.2 -- Consent of Arthur Andersen LLP. 23.4 -- Consent of Thompson & Knight, P.C. (contained in its opinion filed as Exhibit 5.1). 24.1 -- Power of attorney (included on the signature page of this Registration Statement).
ITEM 17. UNDERTAKINGS. (a) Rule 415 offering. The Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and II-2 28 (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Filings incorporating subsequent Exchange Act documents by reference. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 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. (h) Request for acceleration of effective date or filing of registration statement on Form S-8. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 29 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 the 11th day of May, 1995. NOBLE DRILLING CORPORATION By /s/ JAMES C. DAY ---------------------------------- James C. Day Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature appears below constitutes and appoints James C. Day and Byron L. Welliver, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign on his behalf individually and in each capacity stated below any amendment, including post-effective amendments, to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, 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 either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE --------- ----- ---- /s/ JAMES C. DAY Chairman, President and May 11, 1995 - --------------------------------------------- Chief Executive Officer James C. Day and Director (Principal Executive Officer) /s/ BYRON L. WELLIVER Senior Vice President -- May 11, 1995 - --------------------------------------------- Finance, Treasurer and Byron L. Welliver Controller (Principal Financial and Accounting Officer) /s/ MICHAEL A. CAWLEY Director May 11, 1995 - --------------------------------------------- Michael A. Cawley /s/ LAWRENCE J. CHAZEN Director May 11, 1995 - --------------------------------------------- Lawrence J. Chazen /s/ TOMMY C. CRAIGHEAD Director May 11, 1995 - --------------------------------------------- Tommy C. Craighead Director - --------------------------------------------- James L. Fishel /s/ JOHNNIE W. HOFFMAN Director May 11, 1995 - --------------------------------------------- Johnnie W. Hoffman
II-4 30
SIGNATURE TITLE DATE --------- ----- ---- /s/ MARC E. LELAND Director May 11, 1995 - --------------------------------------------- Marc E. Leland /s/ JOHN F. SNODGRASS Director May 11, 1995 - --------------------------------------------- John F. Snodgrass Director - --------------------------------------------- Bill M. Thompson
II-5 31 INDEX TO EXHIBITS
NUMBER EXHIBIT ------ ------- 1.1 -- Form of Standby Agreement. 4.1 -- Restated Certificate of Incorporation of the Registrant dated August 29, 1985 (filed as Exhibit 3.7 to the Registrant's Registration Statement on Form 10 (No. 0-13857) and incorporated herein by reference). 4.2 -- Certificate of Amendment of Restated Certificate of Incorporation of the Registrant dated May 5, 1987 (filed as Exhibit 4.2 to the Registrant's Registration Statement on Form S-3 (No. 33-67130) and incorporated herein by reference). 4.3 -- Certificate of Amendment of Certificate of Incorporation of the Registrant dated August 1, 1991 (filed as Exhibit 3.16 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991 and incorporated herein by reference). 4.4 -- Certificate of Designations of $2.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share, of the Registrant, dated as of November 18, 1991 (filed as Exhibit 3.17 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991 and incorporated herein by reference.) 4.5 -- Certificate of Designations of $1.50 Convertible Preferred Stock, par value $1.00 per share, of the Registrant, dated as of September 15, 1994 (filed as Exhibit 3.8 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference). 4.6 -- Certificate of Amendment of Certificate of Incorporation of the Registrant dated September 15, 1994 (filed as Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for the three-month period ended March 31, 1995 and incorporated herein by reference). 4.7 -- Composite copy of the Bylaws of the Registrant as currently in effect (filed as Exhibit 4.8 to the Registrant's Registration Statement on Form S-3 (No. 33-67130) and incorporated herein by reference). 5.1 -- Opinion of Thompson & Knight, P.C. 23.1 -- Consent of Price Waterhouse LLP. 23.2 -- Consent of Arthur Andersen LLP. 23.4 -- Consent of Thompson & Knight, P.C. (contained in its opinion filed as Exhibit 5.1). 24.1 -- Power of attorney (included on the signature page of this Registration Statement).
EX-1.1 2 FORM OF STANDBY AGREEMENT 1 EXHIBIT 1.1 Noble Drilling Corporation $2.25 Convertible Exchangeable Preferred Stock STANDBY AGREEMENT New York, New York May 12, 1995 Salomon Brothers Inc Seven World Trade Center New York, New York 10048 Dear Sirs: Noble Drilling Corporation, a Delaware corporation (the "Company"), intends to call for redemption on June 1, 1995 (the "Redemption Date"), all of its outstanding $2.25 Convertible Exchangeable Preferred Stock (the "$2.25 Preferred Shares") at a redemption price of $26.575 per $2.25 Preferred Share plus accrued dividends from April 1, 1995, to the Redemption Date of $0.38125, for a total redemption price of $26.95625 (the "Redemption Price") per $2.25 Preferred Share. The $2.25 Preferred Shares are convertible into shares of the Common Stock, $.10 par value, of the Company ("Common Stock") at any time prior to 5:00 P.M., Central Daylight Savings Time, on May 31, 1995 (the "Final Conversion Date"). In order to ensure that the maximum number of $2.25 Preferred Shares will be converted and that the Company will have available sufficient funds to redeem any $2.25 Preferred Shares not converted on or prior to the Final Conversion Date, the Company desires to make arrangements pursuant to which Salomon Brothers Inc (the "Purchaser") will purchase $2.25 Preferred Shares on or prior to the Final Conversion Date and convert all such $2.25 Preferred Shares into shares of Common Stock and, to the extent indicated below, pursuant to which the Purchaser will, at the Company's option, following the Final Conversion Date purchase shares of Common Stock that would have been issuable upon the conversion of the $2.25 2 2 Preferred Shares that have not been surrendered for conversion prior to the expiration of convertibility on the Final Conversion Date. 1. Representations and Warranties. The Company represents and warrants to, and agrees with, the Purchaser as set forth below in this Section 1. Certain terms used in this Section 1 are defined in paragraph (g) hereof. (a) The Company meets the requirements for use of Form S-3 under the Securities Act of 1933 (the "Act") and has filed with the Securities and Exchange Commission (the "Commission") a registration statement on such Form for the registration under the Act of the sale by the Purchaser of any shares of Common Stock that may be acquired by it upon conversion of $2.25 Preferred Shares or purchased pursuant to Section 2(b) of this Agreement. The Company may file with the Commission one of the following: (i) prior to effectiveness of such registration statement, a further amendment to such registration statement, including the form of final prospectus, (ii) a final prospectus in accordance with Rules 430A and 424(b)(1) or (4), or (iii) a final prospectus in accordance with Rules 415 and 424(b)(2) or (5). In the case of clause (ii), the Company has included in such registration statement, as amended at the Effective Date, all information (other than Rule 430A information) required by the Act and the rules thereunder to be included in the Prospectus with respect to the Common Stock registered pursuant to the Registration Statement and the offering thereof. As filed, such amendment and form of final prospectus, or such final prospectus, shall contain all Rule 430A information, together with all other such required information, with respect to the Common Stock registered pursuant to the Registration Statement and the offering thereof and, except to the extent the Purchaser shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. 3 3 (b) On the Effective Date, the Registration Statement did or will, and when the Prospectus is first filed (if required) in accordance with Rule 424(b), on the Final Conversion Date, on the Redemption Date and on the Closing Date, the Prospectus (and any supplements thereto) will, comply in all material respects with the applicable requirements of the Act and the Securities Exchange Act of 1934 (the "Exchange Act") and the respective rules thereunder, on the Effective Date, the Registration Statement did not or will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule 424(b), on the Final Conversion Date, on the Redemption Date and on the Closing Date, the Prospectus (together with any supplement thereto) will not, include any untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Purchaser through the Purchaser specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto). (c) The $2.25 Preferred Shares are convertible into Common Stock at a rate of 5.41946 shares of Common Stock per $2.25 Preferred Share. At the Execution Time, there were 2,065,238 shares of $2.25 Preferred Shares outstanding; the redemption of all the outstanding $2.25 Preferred Shares had been duly authorized by the Company; by the close of business on the date of execution hereof, all the $2.25 Preferred Shares shall have been duly called for redemption in accordance with the Company's Certificate of Designations of the $2.25 Preferred Shares (the "Certificate") and the right to convert the $2.25 Preferred Shares into shares of Common Stock will, as a result of such call, expire at 5:00 P.M., Central 4 4 Daylight Savings Time, on the Final Conversion Date. A copy of the form of notice of redemption and the related letter of transmittal (collectively, the "Notice of Redemption") has been heretofore delivered to the Purchaser. The $2.25 Preferred Shares have been duly and validly authorized and issued and are fully paid and nonassessable. (d) The Company has neither taken nor will take, directly or indirectly, any action designed to cause or result in, or that has constituted or that might reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company to facilitate the conversion of the $2.25 Preferred Shares. (e) The Company has neither paid nor given, nor will pay or give, directly or indirectly, any commission or other remuneration for soliciting the conversion of any $2.25 Preferred Shares into Common Stock and cash. (f) Neither the issue and sale of the Securities (as defined in Section 2(b) hereof), nor the consummation of any other of the transactions herein contemplated, nor fulfillment of the terms hereof will conflict with, result in a breach or violation of, or constitute a default under, any law or the charter or bylaws of the Company or the terms of any material indenture or other material agreement or instrument to which the Company or any of its subsidiaries is a party or is bound or any material judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or any of its subsidiaries. (g) The terms which follow, when used in this Agreement, shall have the meanings indicated. The term "Effective Date" shall mean each date that the Registration Statement and any post-effective amendment or amendments thereto became or become effective and each date after the date hereof on which a document incorporated by reference in the Registration Statement is filed. "Execution Time" shall mean the date and time that this Agreement is executed and delivered by the parties hereto. "Preliminary Prospectus" shall mean any preliminary prospectus referred to in 5 5 paragraph (a) above and any preliminary prospectus included in the Registration Statement at the Effective Date that omits Rule 430A information. "Prospectus" shall mean the prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time or, if no filing pursuant to Rule 424(b) is required, shall mean the form of final prospectus relating to the Securities included in the Registration Statement at the Effective Date. "Registration Statement" shall mean the registration statement referred to in paragraph (a) above, including incorporated documents, exhibits and financial statements, as amended at the Execution Time (or, if not effective at the Execution Time, in the form in which it shall become effective) and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date (as hereinafter defined), shall also mean such registration statement as so amended. Such term shall include any Rule 430A Information deemed to be included therein at the Effective Date as provided in Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such rules or regulation under the Act. "Rule 430A Information" means information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A. Any reference herein to the Registration Statement, a Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of such Preliminary Prospectus or the Prospectus, as the case may be; and any reference herein to the terms "amend", "amendment" or "supplement" with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement, or the issue date of the Preliminary Prospectus or the Prospectus, as the case may be, deemed to be incorporated therein by reference. 6 6 2. Purchase of Purchased Securities. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth: (a) The Purchaser agrees: (i) to purchase, at a flat price of $27.10 per $2.25 Preferred Share, all the $2.25 Preferred Shares tendered to Liberty Bank and Trust Company of Oklahoma City, N.A., as Paying Agent (the "Paying Agent"), on or prior to the expiration of convertibility on the Final Conversion Date; and (ii) to surrender for conversion into shares of Common Stock immediately prior to the expiration of convertibility on the Final Conversion Date all $2.25 Preferred Shares purchased by the Purchaser pursuant to clause (i) above or Section 4 hereof or otherwise acquired by the Purchaser. The shares of Common Stock issued to the Purchaser upon the conversion of $2.25 Preferred Shares are referred to as the "Conversion Securities". The Conversion Securities issued to the Purchaser upon the conversion of $2.25 Preferred Shares purchased by the Purchaser pursuant to clause (i) above are referred to as the "Tendered Securities". (b) In the event that less than all the outstanding $2.25 Preferred Shares are surrendered for conversion at or prior to 5:00 p.m., Central Daylight Savings Time, on the Final Conversion Date, the Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Company, at a purchase price of $4.97397 per share, such whole number of additional shares of Common Stock as would have been issuable upon the conversion of such of the $2.25 Preferred Shares which shall not have been surrendered for conversion prior to the Redemption Date. The Company shall notify the Purchaser of such number of shares as soon as practicable after the expiration of convertibility on the Final Conversion Date and in no event later than 10:00 a.m., Central Daylight Savings Time, on the business day following the Final Conversion Date. The shares of Common Stock to be purchased pursuant to this Section 2(b) are referred to as the "Purchased Securities" and, together with the Conversion Securities, the "Securities". 7 7 (c) It is understood that the Purchaser intends to resell the Securities from time to time at prices prevailing in the open market. With respect to any Tendered Securities or Purchased Securities, the Purchaser, on or prior to June 15, 1995, shall remit to the Company 50% of the excess, if any, of the aggregate proceeds, received by the Purchaser from the sale of such Purchased Securities (net of selling concessions, transfer taxes and other expenses of sale) over an amount equal to $4.97397 multiplied by the number of such Purchased Securities sold by such Purchaser. Upon completion of the sale of the Securities, the Purchaser shall furnish to the Company a statement setting forth the aggregate proceeds received on the sale thereof and the applicable selling concessions, transfer taxes and other expenses of sale. For purposes of the foregoing determination, any Securities not sold by or for the account of the Purchaser prior to the close of business on June 15, 1995, shall be deemed to have been sold on such day for an amount equal to the last reported sale price of the Common Stock on such day. Nothing contained herein shall limit the right of the Purchaser, in its discretion, to determine the price or prices at which, or the time or times when, any Securities shall be sold, whether or not prior to the Redemption Date and whether or not for long or short account. (d) Delivery of any payment for the Purchased Securities shall be made at 9:00 A.M., Central Daylight Savings Time, on June 5, 1995 (two business days after the Redemption Date), or such other date as the Purchaser and the Company may agree (such date and time of delivery and payment for the Purchased Securities being herein called the "Closing Date"). Delivery of the Purchased Securities shall be made to the Purchaser against payment by the Purchaser of the purchase price thereof to or upon the order of the Company by wire transfer of immediately available funds. Delivery of the Purchased Securities shall be made at such location as the Purchaser shall reasonably designate at least one business day in advance of the Closing Date and payment for the Purchased Securities shall be made at the offices of Thompson & Knight, P.C., 1700 Texas Commerce Tower, 600 Travis Street, Houston, Texas 77002. Certificates for the Purchased Securities shall be registered in such names and in such denominations as the Purchaser may request. 8 8 The Company agrees to have the Purchased Securities available for inspection, checking and packaging by the Purchaser in New York, New York prior to the Closing Date. Unless the Company waives its right to receive immediately available funds at the Closing Date and agrees to accept next-day funds in lieu thereof, the Company shall pay to the Purchaser promptly following the Closing Date an amount equal to the Purchaser's overnight cost of funds on the purchase price payable by the Purchaser at the Closing Date. 3. Compensation. As compensation for the commitment of the Purchaser hereunder, the Company will pay to the Purchaser an amount equal to the sum of (i) $556,711, plus (ii) if the aggregate number of the Compensable Shares exceeds 560,000 shares, an additional $0.20 per Compensable Share for the aggregate number of all Compensable Shares plus $0.0265 per Tendered Security for the aggregate number of all Tendered Securities. Compensable Shares consist of any Conversion Securities (other than Tendered Securities) which are resold by the Purchaser for less than $4.97397 per share plus all Purchased Securities and all Tendered Securities. Such compensation shall be paid to the Purchaser by wire transfer of immediately available funds on (A) if the Purchaser is required to purchase any Purchased Securities, the Closing Date, or (B) otherwise, as soon as practicable after the Final Conversion Date (but in no event later than two business days thereafter). 4. Additional Purchases. On or after the date hereof, the Purchaser may purchase $2.25 Preferred Shares, in the open market or otherwise, in such amounts and at such prices as the Purchaser may deem advisable. All shares of $2.25 Preferred Shares so purchased on or after the date hereof will be surrendered for conversion into Common Stock prior to 5:00 p.m., Central Daylight Savings Time, on the Final Conversion Date. The Common Stock acquired by the Purchaser upon conversion of any $2.25 Preferred Shares acquired pursuant to this Section 4 may be sold at any time or from time to time by the Purchaser. It is understood that, for the purpose of stabilizing the price of the Common Stock or otherwise, the Purchaser may make purchases and sales of Common Stock, the $2.25 Preferred Shares or the 9 9 Company's $1.50 Convertible Preferred Stock, in the open market or otherwise, for long or short account, on such terms as it may deem advisable and it may overallot in arranging sales. 5. Agreements. The Company agrees with the Purchaser that: (a) The Company will use its best efforts to cause the Registration Statement, if not effective at the Execution Time, and any amendment thereof, to become effective. Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement to the Prospectus unless the Company has furnished the Purchaser with a copy for its review prior to filing and will not file any such proposed amendment or supplement to which the Purchaser may reasonably object. Subject to the foregoing sentence, if the Registration Statement has become or becomes effective pursuant to Rule 430A, or filing of the Prospectus is otherwise required under Rule 424(b), the Company will cause the Prospectus, properly completed, and any supplement thereto to be filed with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Purchaser of such timely filing. The Company will promptly advise the Purchaser (i) when the Registration Statement, if not effective at the Execution Time, and any amendment thereto, shall have become effective, (ii) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (iii) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed or becomes effective, (iv) of any request by the Commission for any amendment of the Registration Statement or supplement to the Prospectus or for any additional information, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (vi) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company will use its best efforts to 10 10 prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, the Company promptly will (i) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement which will correct such statement or omission or effect such compliance and (ii) supply any supplemented Prospectus to you in such quantities as you may reasonably request. (c) As soon as practicable, the Company will make generally available to its security holders and to the Purchaser an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (d) The Company will furnish to the Purchaser and counsel for the Purchaser, without charge, signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by a Purchaser or dealer may be required by the Act, as many copies of each Preliminary Prospectus and the Prospectus and any supplement thereto as the Purchaser may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the transactions contemplated hereby. The Company will also pay all reasonable out-of-pocket expenses of the Purchaser, including the fees and disbursements of Purchaser's counsel, and the fees and disbursements of the Paying Agent. (e) The Company will arrange for the qualification of the Securities for sale under the laws of such jurisdictions as the Purchaser may designate, 11 11 and will maintain such qualifications in effect so long as required for the distribution of the Securities; provided, however, that the Company will not be required to do so in any jurisdiction where such qualification would require the Company to register to do business as a foreign corporation, would subject the Company to taxation as doing business or would require the Company to file a consent to general service of process therein, in any case where it would not otherwise be so required or subject. (f) The Company will (i) mail or cause to be mailed on the date of execution hereof the Notice of Redemption by first-class mail to the registered holders of the $2.25 Preferred Shares, which mailing will conform to the requirements of the Certificate and (ii) not later than the business day following the date hereof, if requested by the Purchaser, publish an advertisement, in form and substance reasonably satisfactory to the Purchaser, relating to the redemption of the $2.25 Preferred Shares. (g) The Company will direct the Paying Agent to advise the Purchaser daily of the amount of $2.25 Preferred Shares surrendered in the previous day for redemption or for conversion. (h) The Company will not take any action the effect of which would be to require an adjustment in the conversion price of the $2.25 Preferred Shares. (i) The Company will not, prior to the Final Conversion Date and for a period of 90 days following the Final Conversion Date, without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce, or file for the registration of, the offering of, any other shares of Common Stock or any securities convertible into, or exchangeable for, shares of Common Stock; provided, however, that the Company may issue and sell or register Common Stock pursuant to any employee stock option plan, nonemployee director stock option agreement or stock option plan or retirement plan, stock ownership plan or thrift plan of the Company in effect at the Execution Time and the Company may issue Common Stock issuable upon the conversion of securities or the exercise of warrants 12 12 outstanding at the Execution Time; and provided further, that the Company will no longer be bound by this provision if the Purchaser does not acquire any Purchased Securities pursuant to Section 2(b) hereof. (j) The Company confirms as of the date hereof that it is in compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of Doing Business With Cuba, and the Company further agrees that if it commences engaging in business with the government of Cuba or with any person or affiliate located in Cuba after the date the Registration Statement becomes or has become effective with the Securities and Exchange Commission or with the Florida Department of Banking and Finance (the "Department"), whichever date is later, or if the information reported in the Prospectus, if any, concerning the Company's business with Cuba or with any person or affiliate located in Cuba changes in any material way, the Company will provide the Department notice of such business or change, as appropriate, in a form acceptable to the Department. 6. Conditions to the Obligations of the Purchaser. The obligations of the Purchaser hereunder to purchase and convert $2.25 Preferred Shares and to purchase any Purchased Securities shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, each Effective Date occurring after the Execution Time, the Final Conversion Date, the Redemption Date and the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and the following additional conditions: (a) Unless the Purchaser agrees in writing to a later time, the Registration Statement will become effective not later than 5:00 P.M., Central Daylight Savings Time, on the date of this Agreement; if filing of the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any such supplement, will be filed in the manner and within the time period required by Rule 424(b); and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purposes shall have been instituted or threatened. 13 13 (b) On the date of this Agreement and on the Closing Date, the Company shall have furnished to the Purchaser the opinion of Thompson & Knight, P.C., counsel for the Company, dated as of the date of this Agreement and as of the Closing Date, respectively, to the effect that: (i) each of the Company, Triton Engineering Services Company, Noble Drilling (U.S.) Inc., Noble Drilling Services Inc., Noble Drilling International Ltd., Noble Drilling (U.K.) Ltd., Noble Drilling (Mexico) Inc., Noble Drilling (West Africa) Inc., Noble Drilling (West Africa) Ltd., Noble International Limited and Noble Offshore Corporation (individually a "Material Subsidiary" and collectively the "Material Subsidiaries") has been duly incorporated or organized and is validly existing as a corporation in good standing under the laws of the jurisdiction in which it is chartered or organized, with full corporate power and authority to own its properties and conduct its business as described in the Prospectus, and is duly qualified to do business as a foreign corporation in and is in good standing under the laws of each jurisdiction listed on an exhibit to such opinion; (ii) all the outstanding shares of capital stock of each Material Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth or incorporated in the Prospectus, all outstanding shares of capital stock of the Material Subsidiaries other than directors' qualifying shares or shares held by nominees to meet former minimum shareholder requirements, are owned of record, and to such counsel's knowledge, beneficially, by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest and, to the knowledge of such counsel, after due inquiry, any other security interests, claims, liens or encumbrances; (iii) the Company's authorized equity capitalization is as set forth in the Prospectus; the capital stock of the Company conforms in all material respects to the description thereof 14 14 contained in the Prospectus; the outstanding shares of Common Stock have been duly and validly authorized and issued and are fully paid and nonassessable; the Purchased Securities have been duly and validly authorized, and, when issued and delivered to and paid for by the Purchaser pursuant to this Agreement, will be fully paid and nonassessable; the shares of Common Stock issuable upon the conversion of the $2.25 Preferred Shares have been duly and validly authorized and, when issued and delivered upon conversion of the $2.25 Preferred Shares, will be fully paid and nonassessable; the shares of Common Stock issuable upon the conversion of the $2.25 Preferred Shares have been duly authorized for trading, subject to official notice of issuance, through the NASDAQ National Market System; the form of the certificate for the Securities is in valid and sufficient form; and the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Purchased Securities or for the shares of Common Stock issuable upon conversion of the $2.25 Preferred Shares; (iv) to the best knowledge of such counsel, there is no pending or overtly threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries of a character required to be disclosed in the Registration Statement which is not adequately disclosed in the Prospectus, and there is no franchise, contract or other document of a character required to be described in the Registration Statement or Prospectus, or to be filed as an exhibit, which is not described or filed as required; (v) the Registration Statement has become effective under the Act; any required filing of the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose have been instituted 15 15 or overtly threatened; and the Registration Statement and the Prospectus (other than the financial statements and related notes, the financial statement schedules and other financial and statistical information contained or incorporated by reference therein as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the Act and the Exchange Act and the respective rules thereunder; (vi) this Agreement has been duly authorized, executed and delivered by the Company; (vii) no consent, approval, authorization or order of any court or governmental agency or body is required for the consummation by the Company of the transactions contemplated herein, except such as have been obtained under the Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Purchaser and such other approvals (specified in such opinion) as have been obtained; (viii) the $2.25 Preferred Shares have been duly and validly called for redemption on June 1, 1995; neither the call of the $2.25 Preferred Shares for redemption, the conversion or redemption thereof, the issue and sale of the Securities, nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach of, or constitute a default under the charter or bylaws of the Company or the terms of any indenture or other agreement or instrument known to such counsel and to which the Company or any of the Material Subsidiaries is a party or by which it is bound, or any judgment, order or decree known to such counsel to be applicable to the Company or any of the subsidiaries of the Company of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or any of the Material Subsidiaries; provided, that, with respect to the foregoing opinion as to the charter of the Company, the sale of Securities to persons who are not considered to be U.S. citizens 16 16 for purposes of the Shipping Act, 1916, as amended, shall not exceed in the aggregate the Permitted Percentage (as defined in Article XI of the charter of the Company); (ix) neither the call of the $2.25 Preferred Shares for redemption, the conversion or redemption thereof, the issue and sale of the Purchased Securities by the Company nor the consummation of any of the transactions herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach of, or constitute a default under any Texas or United States statute; (x) upon the Company taking the specific actions enumerated in such counsel's opinion, notice of redemption of the $2.25 Preferred Shares will have been duly and lawfully given, all the outstanding $2.25 Preferred Shares will have been duly called for redemption on the Redemption Date and the right to convert the $2.25 Preferred Shares will expire on the Final Conversion Date; and (xi) no holders of securities of the Company have rights to the registration of such securities under the Registration Statement which have not heretofore been waived in writing. In addition, such counsel shall state that they have participated in conferences with directors, officers and other representatives of the Company, representatives of the independent public accountants for the Company, representatives of the Purchaser and counsel for the Purchaser, at which conferences the contents of the Registration Statement and the Prospectus and related matters were discussed, and, although such counsel have not independently verified and are not passing upon and assume no responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus (except to the extent specified elsewhere in such opinion or with reference to such counsel), no facts have come to such counsel's attention that lead such counsel to believe that, at the Effective Date, the Registration Statement included any untrue statement of a material fact or omitted to state any 17 17 material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or that the Prospectus includes any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel express no view with respect to the financial statements and related notes, the financial statement schedules or other financial, statistical and accounting information contained or incorporated by reference in the Registration Statement or Prospectus). In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of Texas or the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the Purchaser and (B) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company or its subsidiaries and public officials. References to the Prospectus in this paragraph (b) include any supplements thereto at the Closing Date. (c) On the date of this Agreement and on the Closing Date, the Purchaser shall have received from Cravath, Swaine & Moore, counsel for the Purchaser, such opinion or opinions, dated the date of this Agreement and the Closing Date, respectively, with respect to the issuance and sale of the Securities, the Registration Statement, the Prospectus (together with any supplement thereto) and other related matters as the Purchaser may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (d) On the date of this Agreement, and on each Effective Date occurring after the Execution Time and on the Closing Date, the Company shall have furnished to the Purchaser a certificate of the Company, signed by the Chairman of the Board or the President and the principal financial or accounting officer of the Company, dated the date of delivery, to the effect that 18 18 the signers of such certificate have carefully examined the Registration Statement, the Prospectus, any supplement to the Prospectus and this Agreement and that: (i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the date of such certificate as if made on the date of such certificate and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the date of such certificate; (ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the Company's knowledge, have been threatened; and (iii) since the date of the most recent financial statements included in the Prospectus (exclusive of any supplement thereto), there has been no material adverse change in the condition (financial or other), earnings, business or properties of the Company and its subsidiaries, whether or not arising from transactions in the ordinary course of business, except as set forth or contemplated in the Prospectus (exclusive of any supplement thereto). (e) At the Execution Time, and on each Effective Date occurring after the Execution Time on which financial information is included or incorporated in the Registration Statement or the Prospectus and on the Closing Date, Price Waterhouse LLP shall have delivered to the Purchaser a letter or letters, dated as of the date of delivery, in form and substance satisfactory to the Purchaser, confirming that they are independent public accountants with respect to the Company within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder, and stating in effect that: (i) in their opinion, the audited financial statements of the Company for the year ended December 31, 1994 included or incorporated in the Registration Statement and the Prospectus and 19 19 reported on by them comply in form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; (ii) on the basis of a reading of the latest unaudited financial statements made available by the Company and its subsidiaries; carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the stockholders, directors and executive, finance and audit committees of the Company and the Material Subsidiaries; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to December 31, 1994, nothing came to their attention which caused them to believe that: (1) the unaudited financial statements of the Company included or incorporated in the Registration Statement and the Prospectus do not comply in form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect to financial statements included or incorporated in quarterly reports on Form 10-Q under the Exchange Act; and said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated in the Registration Statement and the Prospectus; or (2) with respect to the period subsequent to March 31, 1995, there were any changes, at a specified date not more than five business days prior to the date of the letter, in the capital stock, working capital or long-term debt of the Company or decreases in the total assets or shareholders' equity of the Company as compared with the amounts 20 20 shown on the most recent consolidated balance sheet included or incorporated in the Registration Statement and the Prospectus, or for the period from March 31, 1995, to such specified date there were any decreases, as compared with the corresponding period in the preceding year in consolidated operating revenues, or in income from continuing operations on a total or per common share basis, except in all instances for changes or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation is not deemed necessary by the Purchaser; (iii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its subsidiaries) set forth in the Registration Statement and the Prospectus, including the information set forth under the captions "Price Range of Common Stock and Dividend Policy", "Capitalization", and "Selected Financial Data" in the Prospectus, the information for the year ended December 31, 1994 included in Items 1, 2, 6, 7 and 11 of the Company's Annual Report on Form 10-K, incorporated in the Registration Statement and the Prospectus, and the information included in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included or incorporated in any of the Company's Quarterly Reports on Form 10-Q or any Current Reports on Form 8-K incorporated in the Registration Statement and the Prospectus, agrees with the accounting records of the Company and its subsidiaries, excluding any questions of legal interpretation; and (iv) on the basis of a reading of any unaudited pro forma financial statements included or incorporated in the Registration Statement and the Prospectus (the "pro forma financial statements"), carrying out certain specified procedures, inquiries of certain officials of the 21 21 Company who have responsibility for financial and accounting matters, and proving the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the pro forma financial statements, nothing came to their attention which caused them to believe that the pro forma financial statement do not comply in form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of such statements. References to the Prospectus in this paragraph (e) include any supplement thereto at the date of the letter. (f) At the Execution Time, Arthur Andersen LLP shall have delivered to the Purchaser a letter or letters, dated as of the date of delivery, in form and substance satisfactory to the Purchaser, confirming that they were independent public accountants with respect to the Company within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder and stating in effect that: (i) in their opinion, the audited financial statements of the Company for the years ended December 31, 1992 and 1993 included or incorporated in the Registration Statement and the Prospectus and reported on by them comply in form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; and (ii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting or financial nature (which is limited to accounting or financial information derived from the general accounting records of the Company and its subsidiaries) set forth in the Registration Statement and the Prospectus, including the information set forth under the caption "Selected Financial Data," and the information for the years ended December 31, 1992 22 22 and 1993 included in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994, incorporated in the Registration Statement and the Prospectus, agrees with the accounting records of the Company and its subsidiaries, excluding any questions of legal interpretation. (g) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (e) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the business or properties of the Company and its subsidiaries the effect of which, in any case referred to in clause (i) or (ii) above, is, in the judgment of the Purchaser, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto). (h) The Company shall have furnished to the Purchaser such further information, certificates and documents as the Purchaser may reasonably request. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Purchaser and its counsel, this Agreement and all obligations of the Purchaser hereunder may be cancelled at, or at any time prior to, the Closing Date by the Purchaser. Notice of such cancellation shall be given to the Company in writing or by telephone or telegraph confirmed in writing. The documents required to be delivered by this Section 6 shall be delivered to the offices of Thompson & Knight, P.C., 1700 Texas Commerce Tower, 600 Travis Street, 23 23 Houston, Texas 77002 on the date of this Agreement or on the Closing Date, as applicable. 7. Reimbursement of Purchaser's Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Purchaser set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by the Purchaser, the Company will reimburse the Purchaser upon demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. 8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless the Purchaser, the directors, officers, employees and agents of the Purchaser and each person who controls the Purchaser within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) the terms of the $2.25 Preferred Shares and the terms of the Company's call for redemption thereof or (ii) any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as originally filed or in any amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof 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 agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage or liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or 24 24 liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Purchaser through the Purchaser specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) The Purchaser agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the indemnity from the Company to the Purchaser set forth in clause (ii) of the foregoing paragraph (a), but only with reference to the statements set forth in the last paragraph of the cover page and under the heading "Standby Arrangements" in any Preliminary Prospectus and the Prospectus. This indemnity agreement will be in addition to any liability which the Purchaser may otherwise have. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to 25 25 appoint counsel to represent the indemnified party in such an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action includes both the indemnified party and the indemnifying party, and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or comprise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Purchaser agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively, "Losses") to which the Company and the Purchaser may be subject, in such proportion as is appropriate to reflect the relative benefits received by the Company and by the Purchaser from the offering of the Securities; provided, however, that in no case shall the Purchaser be responsible for any amount of Losses that are in excess of the fees 26 26 payable by the Company to the Purchaser pursuant to Section 3 hereof. If the allocation provided by the preceding sentence is unavailable for any reason, the Company and the Purchaser shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative faults of the Company and of the Purchaser in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the sum of (i) the liquidation preference of $2.25 Preferred Shares converted by the Purchaser and (ii) the net amount paid by the Purchaser to the Company on the Closing Date; benefits received by the Purchaser shall be deemed to be equal to the total fees payable by the Company to the Purchaser pursuant to Section 3 hereof. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or by the Purchaser. The Company and the Purchaser agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person who controls the Purchaser within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of the Purchaser shall have the same rights to contribution as the Purchaser, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d). 9. Soliciting Conversions. The Purchaser may assist the Company in soliciting conversion of the $2.25 Preferred Shares by the holders thereof but shall not be entitled to compensation by the Company for any such assistance. 27 27 10. Termination. This Agreement shall be subject to termination in the absolute discretion of the Purchaser, by notice given to the Company at any time prior to the Closing Date, if prior to such time, (i)(a) trading in the Company's Common Stock or in the $2.25 Preferred Shares shall have been suspended by the Commission or by the NASDAQ National Market System during the five business days prior to the Redemption Date (other than if trading is resumed within one hour), or (b) trading in securities generally on the New York Stock Exchange or on the NASDAQ National Market System shall have been suspended or limited or minimum prices shall have been established on such exchange; (ii) a banking moratorium shall have been declared either by Federal or New York State authorities; or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which on financial markets is such as to make it, in the judgment of the Purchaser, impracticable or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Prospectus (exclusive of any supplement thereto). 11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Purchaser set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Purchaser or the Company or any of the officers, directors or controlling persons referred to in Section 8 hereof, and will survive the conversion of any $2.25 Preferred Shares and the delivery of and payment for any Securities. The provisions of Section 7 and 8 hereof shall survive the termination or cancellation of this Agreement. 12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Purchaser, will be mailed, delivered or telegraphed and confirmed to it at Seven World Trade Center, New York, New York 10048, attention of Legal Department, with a copy separately delivered to Cravath, Swaine, & Moore, 825 Eighth Avenue, New York, New York 10019, attention of: William P. Rogers, Jr., Esq.; or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 10370 Richmond Avenue, Suite 400, Houston, Texas 77042, attention of the President, with a copy separately delivered to Thompson & Knight, P.C., 1700 Pacific Avenue, Suite 3300, 28 28 Dallas, Texas 75201-4693, attention of: Robert D. Campbell, Esq. 13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder. 14. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and the Purchaser. Very truly yours, NOBLE DRILLING CORPORATION By: _________________________ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date first above written. SALOMON BROTHERS INC By: _______________________ Name: Title: EX-5.1 3 OPINION OF THOMPSON & KNIGHT 1 EXHIBIT 5.1 THOMPSON & KNIGHT A PROFESSIONAL CORPORATION ATTORNEYS AND COUNSELORS 1700 PACIFIC AVENUE o SUITE 3300 DALLAS, TEXAS 75201-4693 (214) 969-1700 FAX (214) 969-1751 May 11, 1995 Noble Drilling Corporation 10370 Richmond Avenue, Suite 400 Houston, Texas 77042 Dear Sirs: We have acted as counsel for Noble Drilling Corporation, a Delaware corporation (the "Company"), in connection with the preparation of the Company's Registration Statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") relating to the registration of a maximum of 11,192,474 shares (the "Shares") of Common Stock, par value $.10 per share, of the Company under the Securities Act of 1933, as amended (the "Securities Act"). The prospectus forming a part of the Registration Statement covers the proposed sale from time to time by Salomon Brothers Inc (the "Purchaser") of such of the Shares as may be acquired by the Purchaser either (i) upon conversion of shares of $2.25 Convertible Exchangeable Preferred Stock, par value $1.00 per share ("$2.25 Preferred Shares"), of the Company (the "Conversion Shares") or (ii) pursuant to and subject to the terms and conditions of a Standby Agreement between the Company and the Purchaser (the "Standby Agreement"), the form of which is filed as Exhibit 1.1 to the Registration Statement (the "Purchased Shares"). In connection with the foregoing, we have examined the originals or copies, certified or otherwise authenticated to our satisfaction, of the Registration Statement, the form of the Standby Agreement and such corporate records of the Company, certificates of public officials and of officers of the Company, and other agreements, instruments and documents as we have deemed necessary to require as a basis for the opinions hereinafter expressed. Where facts material to the opinions hereinafter expressed were not independently established by us, we have relied upon the statements of officers of the Company, where we deemed such reliance appropriate under the circumstances. Based upon the foregoing and in reliance thereon, and subject to the assumptions and qualifications hereinafter specified, it is our opinion that: 1. The Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware. 2. The Conversion Shares have been duly and validly authorized for issuance by the Company and, when issued and delivered upon conversion of the $2.25 Preferred Shares as described in the prospectus forming a part of the Registration Statement, will be legally issued, fully paid and nonassessable. 2 Noble Drilling Corporation May 11, 1995 Page 2 3. The Purchased Shares to be sold by the Company pursuant to the Standby Agreement have been duly authorized for issuance by the Company and, when issued and delivered against payment therefor as described in the prospectus forming a part of the Registration Statement, will be legally issued, fully paid and nonassessable. We are members of the Bar of the State of Texas only and do not purport to be experts on the laws of any state or jurisdiction other than the State of Texas and the United States. Insofar as the opinions expressed herein relate to matters governed by Delaware law, we have relied solely upon a reading of the applicable statutes and the corporate records of the Company and certificates of public officials and officers of the Company referenced above with respect to the opinions given herein. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the reference to us under the caption "Legal Opinions" in the prospectus forming a part of the Registration Statement. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations of the Commission thereunder. Respectfully submitted, THOMPSON & KNIGHT, A Professional Corporation By: /s/ ROBERT D. CAMPBELL ------------------------------- Robert D. Campbell, Attorney RDC/wp EX-23.1 4 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 February 2, 1995 appearing on page 19 of Noble Drilling Corporation's Annual Report on Form 10-K for the year ended December 31, 1994. We also consent to the reference to us under the heading "Experts" in such Prospectus. PRICE WATERHOUSE LLP Houston, Texas May 11, 1995 EX-23.2 5 CONSENT OF ARTHUR ANDERSEN 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement of our report dated September 15, 1994 included in the Noble Drilling Corporation Form 10-K for the fiscal year ended December 31, 1994 and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN LLP Houston, Texas May 11, 1995 -----END PRIVACY-ENHANCED MESSAGE-----