-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BXLVnJy+Ti3eC3LVOzyHBToNJZqHoqTWU+9RAmUWmOFVQo7G1hKK103+1EDMWgm5 K9wdUNf7GyOJS5r3ZARa2Q== 0000950129-00-002111.txt : 20000503 0000950129-00-002111.hdr.sgml : 20000503 ACCESSION NUMBER: 0000950129-00-002111 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20000502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EOG RESOURCES INC CENTRAL INDEX KEY: 0000821189 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 470684736 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-36056 FILM NUMBER: 616455 BUSINESS ADDRESS: STREET 1: 1200 SMITH ST CITY: HOUSTON STATE: TX ZIP: 77002-7361 BUSINESS PHONE: 7136517000 MAIL ADDRESS: STREET 1: 1200 SMITH STREET CITY: HOUSTON STATE: TX ZIP: 77002-7361 FORMER COMPANY: FORMER CONFORMED NAME: ENRON OIL & GAS CO DATE OF NAME CHANGE: 19920703 S-4 1 EOG RESOURCES, INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 2, 2000 REGISTRATION NUMBER 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 EOG RESOURCES, INC. (Exact name of registrants as specified in their charters) DELAWARE 1311 47-0684736 (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Incorporation or Organization) Classification Code Number) Identification No.)
1200 SMITH STREET, SUITE 300 HOUSTON, TEXAS 77002 (713) 651-7000 (Address, including zip code, and telephone number, including area code, of principal executive offices) BARRY HUNSAKER, JR. EOG RESOURCES, INC. 1200 SMITH STREET, SUITE 300 HOUSTON, TEXAS 77002 TELEPHONE: (713) 651-6940 FACSIMILE: (713) 651-6987 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: ARTHUR H. ROGERS FULBRIGHT & JAWORSKI L.L.P. 1301 MCKINNEY, SUITE 5100 HOUSTON, TEXAS 77010-3095 TELEPHONE: (713) 651-5151 FACSIMILE: (713) 651-5246 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER PROPOSED MAXIMUM AMOUNT OF TO BE REGISTERED REGISTERED UNIT(1) OFFERING PRICE(1) REGISTRATION FEE - ----------------------------------------------------------------------------------------------------------------------------- Fixed Rate Cumulative Perpetual Senior 100,000 $1,000 $100,000,000 $26,400 Preferred Stock, Series B............ - ----------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f). 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 SUBJECT TO COMPLETION, DATED MAY 2, 2000 PRELIMINARY PROSPECTUS EOG RESOURCES, INC. OFFER TO EXCHANGE 100,000 SHARES FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES A FOR FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES B --------------------- The Series B preferred stock: - will be freely tradeable; - is substantially identical to the Series A preferred stock, including the liquidation preference and dividend rate; and - will not be listed on any securities exchange or on any automated dealer quotation system. The exchange offer: - expires at 5:00 p.m., New York City time, on , 2000, unless extended, and - is not conditioned on any minimum number of shares being tendered. In addition, you should note that: - all outstanding shares of Series A preferred stock that are validly tendered and not validly withdrawn will be exchanged for an equal number of shares of Series B preferred stock that are registered under the Securities Act of 1933, - tenders of outstanding shares of Series A preferred stock may be withdrawn any time before the expiration of the exchange offer, and - the exchange of outstanding shares of Series A preferred stock for shares of Series B preferred stock in the exchange offer should not be a taxable event for U.S. federal income tax purposes. YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 5 OF THIS PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is , 2000. --------------------- 3 WHERE YOU CAN FIND ADDITIONAL INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference rooms located at: - 450 Fifth Street, N.W. Washington, D.C. 20549 - Seven World Trade Center New York, New York 10048; and - Northwest Atrium Center 500 West Madison Street Chicago, Illinois 60661 Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges. Our common stock has been listed and traded on the New York Stock Exchange since 1989. Accordingly, you may inspect the information we file with the SEC at the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The information incorporated by reference is an important part of this offering memorandum, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the document listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 until we exchange all of the Series A preferred stock: - our Annual Report on Form 10-K for the fiscal year ended December 31, 1999. You may request a copy of these filings, excluding exhibits, at no cost by writing or telephoning Patricia L. Edwards, Corporate Secretary, at our principal executive office, which is: EOG Resources, Inc. 1200 Smith Street, Suite 300 Houston, Texas 77002 (713) 651-7000 OIL AND GAS TERMS When describing commodities produced and sold: gas = natural gas oil = crude oil liquids = crude oil, condensate, and natural gas liquids When describing natural gas: Mcf = thousand cubic feet MMcf = million cubic feet Bcf = billion cubic feet MMBtu = million British Thermal Units When describing oil: Bbl = barrel MBbl = thousand barrels MMBbl = million barrels When comparing oil to natural gas: 1 Bbl of oil = 6 Mcf of natural gas equivalent Mcfe = thousand cubic feet equivalent MMcfe = million cubic feet equivalent Bcfe = billion cubic feet equivalent
i 4 TABLE OF CONTENTS
PAGE Prospectus Summary..................... 1 Risk Factors........................... 5 Special Note Regarding Forward Looking Statements........................... 10 Business............................... 11 Description of the Series B Preferred Stock................................ 16 Certain Federal Income Tax Consequences......................... 21 Book Entry Issuance.................... 24 Exchange Offer......................... 27 Description of Capital Stock........... 34 Plan of Distribution................... 37 Legal Matters.......................... 37 Experts................................ 38 Independent Petroleum Engineers........ 38
ii 5 PROSPECTUS SUMMARY This summary highlights selected information we have included or incorporated by reference in this prospectus. It does not contain all information that may be important to you. More detailed information about this exchange offer, our business and our financial and operating data is contained elsewhere in this prospectus. We encourage you to read this prospectus in its entirety before making a decision as to whether to participate in the exchange offer. In this prospectus, we refer to EOG Resources, Inc. and its subsidiaries as "we", "us", "our" or "EOG" unless the context clearly indicates otherwise. EOG RESOURCES, INC. EOG Resources, Inc., a Delaware corporation organized in 1985, together with its subsidiaries, explores for, develops, produces and markets, natural gas and crude oil primarily in major producing basins in the United States, as well as in Canada and Trinidad and, to a lesser extent, selected other international areas. Our principal producing areas are further described under "Business -- Exploration and Production" on page 12. At December 31, 1999, our estimated net proved natural gas reserves were 3,175 Bcf, and estimated net proved crude oil, condensate and natural gas liquids reserves were 73 MMBbl. At such date, approximately 54% of our reserves, on a natural gas equivalent basis, was located in the United States, 16% in Canada and 30% in Trinidad. BUSINESS STRATEGY Our strategy is to maximize the rate of return on invested capital by controlling all operating and capital costs. Our strategy is intended to enhance the generation of cash flow and earnings from each unit of production on a cost-effective basis. We focus our drilling activity toward natural gas deliverability in addition to natural gas reserve enhancement and to a lesser extent crude oil exploitation. We also focus on the cost-effective utilization of advances in technology associated with gathering, processing and interpretation of 3-D seismic data, developing reservoir simulation models and drilling operations through the use of new and/or improved drill bits, mud motors, mud additives, formation logging techniques and reservoir fracturing methods. These advanced technologies are used, as appropriate, throughout the company to reduce the risks associated with all aspects of oil and gas reserve exploration, exploitation and development. We implement our strategy by emphasizing the drilling of internally generated prospects in order to find and develop low cost reserves. We also make selected tactical acquisitions that give us additional economies of scale or land positions with significant additional prospects. Achieving and maintaining the lowest possible operating cost structure are also important goals in the implementation of our strategy. With respect to information on our working interest in wells or acreage, "net" oil and gas wells or acreage are determined by multiplying "gross" oil and gas wells or acreage by our working interest in the wells or acreage. Unless otherwise defined, all references to wells or acreage are gross. RECENT DEVELOPMENTS For the first quarter 2000, we reported net income available to common of $38.8 million, or $.33 per share, compared to net income available to common of $5.1 million, or $.03 per share, for the comparable period a year ago. During first quarter 2000, our total production per share increased 23% as compared to first quarter a year ago. On an absolute basis, our total production increased 5% during first quarter 2000 compared to as-adjusted production (excluding India) from first quarter a year ago. During first quarter 2000, we announced a new 10 million share repurchase authorization. We have repurchased approximately 2.2 million shares of our common stock under this authorization. We have declared a regular quarterly dividend of $.03 per share on our common stock, payable April 28, 2000, to shareholders of record as of April 14, 2000. On April 18, 2000, we announced a 1 6 17% increase in the annual dividend rate from $.12 per share to $.14 per share beginning with dividends payable after April 28, 2000. SUMMARY OF THE EXCHANGE OFFER On December 10, 1999, we completed the private offering of the outstanding shares of Series A preferred stock. We entered into a registration rights agreement with the initial purchasers in the private offering. We agreed to deliver this prospectus to you and to use our reasonable best efforts to complete the exchange offer within 180 days after the date we issued the Series A preferred stock. You are entitled to exchange your outstanding Series A preferred stock for new Series B preferred stock with substantially identical rights and preferences. You should read the discussion under the heading "-- Description of Series B Preferred Stock", beginning on page 16, for more information about the Series B preferred stock. We summarize the terms of the exchange offer below. You should read the discussion under the heading "Exchange Offer", beginning on page 27, for more information about the exchange offer and resale of the Series B preferred stock. Exchange Offer............. We are offering to issue to you one share of Series B preferred stock for each share you hold of Series A preferred stock. Expiration Date............ The exchange offer will expire at 5:00 p.m., New York City time, on , 2000, or at a later date and time to which we extend it. Withdrawal of Tenders...... You may withdraw your tender of outstanding shares of Series A preferred stock at any time before the expiration of the exchange offer. Conditions of Exchange Offer...................... We will not be required to accept outstanding shares of Series A preferred stock if the exchange offer would violate applicable law or if any legal action has been instituted or threatened that would impair our ability to proceed with the exchange offer. Please read the discussion under the heading "Exchange Offer -- Conditions to Exchange Offer", beginning on page 29, for more information about the conditions to the exchange offer. Procedures for Tendering Shares of Series A Preferred Stock............ If you wish to participate in the exchange offer, you must complete, sign and date the letter of transmittal or a facsimile of a letter of transmittal and mail or deliver the letter of transmittal, together with the certificates representing your shares of Series A preferred stock, to the exchange agent. If The Depository Trust Company holds the shares of Series A preferred stock that you own, you may effect the delivery of the shares by book-entry transfer or through the automated tender offer program of The Depository Trust Company. If you tender under the automated tender program, you must agree to be bound by the letter of transmittal that we are providing with this prospectus as though you had signed the letter of transmittal. If you sign or agree to be bound by the letter of transmittal, you will represent to us that, among other things: - any Series B preferred stock that you receive will be acquired in the ordinary course of business; - you have no arrangement or understanding with any person or entity to participate in the distribution of the Series B preferred stock; - if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the Series B preferred stock; 2 7 - if you are a broker-dealer that will receive Series B preferred stock for your own account in exchange for Series A preferred stock that were acquired as a result of market-making activities, you will deliver a prospectus, as required by law, in connection with any resale of the Series B preferred stock; and - you are not our "affiliate", as that word is defined in Rule 405 of the Securities Act of 1933, or, if you are our affiliate, you will comply with any applicable registration and prospectus delivery requirements of the Securities Act of 1933. Guaranteed Delivery Procedures................. If you wish to tender your Series A preferred stock and cannot comply with the requirement to deliver the letter of transmittal and the certificates representing the Series A preferred stock or use the applicable procedures under the automated tender offer program of The Depository Trust Company, before the expiration date of the exchange offer, you must tender the certificates representing your shares of Series A preferred stock according to the guaranteed delivery program described under the heading "Exchange Offer -- Guaranteed Delivery Procedures" on page 31. U.S. Federal Income Tax Consequences............... The exchange of Series B preferred stock for Series A preferred stock in the exchange offer should not be a taxable event for U.S. federal income tax purposes. Please read the discussion under the heading "Certain Federal Income Tax Consequences", beginning on page 21. Use of Proceeds............ We will not receive any cash proceeds from the issuance of the Series B preferred stock. Plan of Distribution....... All broker-dealers who receive shares of Series B preferred stock in the exchange offer have a prospectus delivery obligation. Broker-dealers who acquired the Series A preferred stock as a result of market-making or other trading activities may use this prospectus, as supplemented or amended, in connection with the resale of the Series B preferred stock. Broker-dealers who acquired the Series A preferred stock from us must comply with the registration and prospectus delivery requirements of the Securities Act of 1933, including being named as selling stockholders, to resell the Series A preferred stock or the Series B preferred stock. Exchange Agent............. Bank of New York is the exchange agent for the exchange offer. Please see the information under the heading "Exchange Offer -- Exchange Agent" for the address and telephone number of the exchange agent. We summarize the rights and preferences of the Series B preferred stock below. You should read the discussion under the heading "Description of the Series B Preferred Stock" beginning on page 16, for more information about the Series B preferred stock. Securities Offered.............. 100,000 shares of Series B preferred stock. Dividends....................... Cash dividends on the Series B preferred stock will only be paid if declared by EOG's board of directors and will be cumulative. If declared, dividends will be payable at the rate of $71.95 per share, per year, which equals 7.195% of the Series B preferred stock's liquidation preference. This divi- 3 8 dend rate will be adjusted and the Series B preferred stock may be redeemed in the event of certain amendments to the Internal Revenue Code of 1986 relating to the dividends received deduction. Dividend Payment Dates.......... March 15, June 15, September 15 and December 15 of each year, beginning March 15, 2000. Ranking......................... The Series B preferred stock will be a new series of our senior preferred stock, ranking on a parity with our Series A preferred stock, the Flexible Money Market Cumulative Preferred Stock, Series C, and the Flexible Money Market Cumulative Preferred Stock, Series D, which is to be issued in exchange for the Series C preferred stock in a contemporaneous exchange offer. Liquidation Preference.......... The Series B preferred stock will have a liquidation preference of $1,000 per share, plus all accrued and unpaid dividends, whether or not earned or declared. Voting Rights................... Except as described under "Description of the Series B Preferred Stock -- Voting Rights," the Series B preferred stock will have no voting rights. Redemption...................... Except as described under "Description of the Series B Preferred Stock -- Dividends -- Changes in the Dividends Received Percentage," we may not redeem the Series B preferred stock before December 15, 2009. Beginning on that date, we may redeem all or part of the Series B preferred stock at $1,000 per share, plus all accrued and unpaid dividends, whether or not declared. The Series B preferred stock will not benefit from any sinking fund. Absence of Market for the Series B Preferred Stock............... The Series B preferred stock will be a new issue of securities for which there currently is no market. An active market for the Series B preferred stock may not develop. If an active market does not develop, the market price and liquidity of the Series B preferred stock would be adversely affected. Our executive offices are located at 1200 Smith Street, Suite 300, Houston, Texas 77002 (telephone: (713) 651-7000). 4 9 RISK FACTORS In considering whether to participate in the exchange offer, you should carefully consider the risk factors described below and all the information we have included or incorporated by reference in this prospectus. In addition, please read "Cautionary Statement Regarding Forward-Looking Statements" on page 10 of this prospectus, where we describe uncertainties associated with our business and the forward-looking statements included or incorporated by reference in this prospectus. RISK FACTORS RELATING TO EOG AND THE OIL AND GAS INDUSTRY A substantial or extended decline in oil or gas prices would have a material adverse effect on us. Prices for natural gas and oil fluctuate widely. For example, natural gas and oil prices declined significantly in 1998 and, for an extended period of time, remained substantially below prices obtained in previous years. In late 1999, natural gas and oil prices increased significantly. Since we are primarily a natural gas company, we are more significantly affected by changes in natural gas prices than changes in the prices for crude oil, condensate or natural gas liquids. Among the factors that can cause these price fluctuations are: - the level of consumer demand; - weather conditions; - price and availability of alternative fuels; - domestic drilling activity; and - overall economic conditions. During 1995, 1996, 1997, 1998 and 1999, the high and low prices for natural gas and oil on the twelve-month forward NYMEX strip were:
GAS OIL -------------- ---------------- HIGH LOW HIGH LOW ----- ----- ------ ------ 1995.............................................. $2.09 $1.57 $19.16 $16.58 1996.............................................. 2.73 1.85 23.27 16.90 1997.............................................. 2.79 2.02 23.38 18.29 1998.............................................. 2.72 1.92 18.41 12.17 1999.............................................. 2.81 1.95 23.39 12.10
The average North America wellhead natural gas prices we received increased 43% from 1995 to 1996 and 15% from 1996 to 1997, decreased by 15% from 1997 to 1998, and increased 11% from 1998 to 1999. Wellhead natural gas volumes from the Trinidad SECC Block are sold at prices that are based on a fixed schedule with periodic escalations. In January 2000, we signed a 15 year natural gas supply contract for over 60 MMcf per day from the Trinidad U(a) Block with the Natural Gas Company of Trinidad and Tobago. Due to the many uncertainties associated with the world political environment, the availabilities of other worldwide energy supplies and the relative competitive relationships of the various energy sources in the view of the consumers, we are unable to predict what changes may occur in natural gas prices in the future. We sell substantially all of our wellhead crude oil and condensate under various terms and arrangements at market responsive prices. Crude oil and condensate prices also have fluctuated during the last three years. Due to the many uncertainties associated with the world political environment, the availabilities of other worldwide energy supplies and the relative competitive relationships of the various energy sources in the view of the consumers, the level of consumer demand and the availability of alternative fuels, we are unable to predict what changes may occur in crude oil and condensate prices in the future. 5 10 Our cash flow and earnings depend to a great extent on the prevailing prices for natural gas and oil. Prolonged or substantial declines in these commodity prices may adversely affect our liquidity, the amount of cash flow available for capital expenditures and our ability to maintain our credit quality and access to the credit and capital markets. Our ability to sell our oil and gas production could be materially harmed if we fail to obtain adequate services such as transportation and processing. The sale of our oil and gas production depends on a number of factors beyond our control, including the availability and capacity of transportation and processing facilities. Our failure to obtain such services on acceptable terms could materially harm our business. The oil and gas reserves data and future net revenues estimates we report are uncertain. Estimates of reserves by necessity are projections based on engineering data, the projection of future rates of production and the timing of future expenditures. Estimates of our proved oil and gas reserves and projected future net revenues are based on reserve reports which we prepare and a portion of which are reviewed by independent petroleum engineers. The process of estimating oil and gas reserves requires substantial judgment on the part of the petroleum engineers, resulting in imprecise determinations, particularly with respect to new discoveries. Different reserve engineers may make different estimates of reserve quantities and revenues attributable thereto based on the same data. Future performance that deviates significantly from the reserve reports could have a material adverse effect on us. The accuracy of any reserve estimate depends on the quality of the available data as well as engineering and geological interpretation and judgment. Results of drilling, testing and production and changes in the assumptions regarding decline and production rates, the ability to market oil and gas that is produced, oil and gas prices, revenues, taxes, capital expenditures, operating expenses, geologic success and quantities of recoverable oil and gas may vary substantially from those assumed in the estimates, may result in revisions to such estimates and could materially affect the estimated quantities and related value of reserves. The estimates of future net revenues reflect oil and gas prices as of the date of estimation, without escalation or reduction. Fluctuations in the price of natural gas and oil have the effect of significantly altering reserve estimates as the economic projections inherent in the estimates may reduce or increase the quantities of recoverable reserves. There can be no assurance, however, that such prices will be realized or that the estimated production volumes will be produced during the periods indicated. Actual future production, natural gas and oil prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable natural gas and oil reserves most likely will vary from our estimates. If we fail to acquire or find additional reserves, our reserves and production will decline materially from their current levels. The rate of production from oil and gas properties generally declines as reserves are depleted. Except to the extent that we acquire additional properties containing proved reserves, conduct successful exploration and development activities or, through engineering studies, identify additional behind-pipe zones or secondary recovery reserves, our proved reserves will decline materially as reserves are produced. Future oil and gas production is, therefore, highly dependent upon our level of success in acquiring or finding additional reserves. We incur certain costs to comply with government regulations, especially regulations relating to environmental protection, and could incur even greater costs in the future. Our exploration, production and marketing operations are regulated extensively at the federal, state and local levels, as well as by other countries in which we do business. We have made and will continue to make expenditures in our efforts to comply with the requirements of environmental and other regulations. Further, the oil and gas industry regulatory environment could change in ways that might substantially increase these costs. 6 11 Hydrocarbon-producing states regulate conservation practices and the protection of correlative rights. These regulations affect our operations and limit the quantity of hydrocarbons we may produce and sell. In addition, at the U.S. federal level, the Federal Energy Regulatory Commission regulates interstate transportation of natural gas under the Natural Gas Act. Other regulated matters include marketing, pricing, transportation and valuation of royalty payments. As an owner or lessee and operator of oil and gas properties, we are subject to various federal, state, local and foreign regulations relating to discharge of materials into, and protection of, the environment. These regulations may, among other things, impose liability on us for the cost of pollution clean-up resulting from operations, subject us to liability for pollution damages, and require suspension or cessation of operations in affected areas. Changes in or additions to regulations regarding the protection of the environment could hurt our business. Our industry is very competitive. The oil and gas industry is extremely competitive. This is especially true with regard to exploration for, and exploitation and development of, new sources of crude oil and natural gas. As an independent oil and gas company, we frequently compete against other companies that are larger and financially stronger in acquiring properties suitable for exploration, in contracting for drilling equipment and other services and in securing trained personnel. We do not insure against all potential losses and could be seriously harmed by unexpected liabilities. Exploration for and production of oil and gas can be hazardous, involving natural disasters and other unforeseen occurrences such as blowouts, cratering, fires and loss of well control, which can damage or destroy wells or production facilities, injure or kill people, and damage property and the environment. Offshore operations are subject to usual marine perils, including hurricanes and other adverse weather conditions, and governmental regulations as well as interruption or termination by governmental authorities based on environmental and other considerations. We maintain insurance against many, but not all, potential losses or liabilities arising from our operations in accordance with customary industry practices and in amounts that we believe to be prudent. Losses and liabilities arising from such events could reduce our revenues and increase our costs to the extent not covered by insurance. The occurrence of any of the aforementioned events and any payments made as a result of such events and the liabilities related thereto, would reduce the funds available for exploration, drilling and production and could have a material adverse effect on our financial position or results of operations. Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks. We engage in price risk management activities from time to time primarily for non-trading and to a lesser extent for trading purposes. We use derivative financial instruments (primarily price swaps and costless collars) for non-trading purposes to hedge the impact of market fluctuations on natural gas and crude oil market prices and net income and cash flow. To the extent that we engage in hedging activities, we may be prevented from realizing the benefits of price increases above the levels of the hedges. In addition, we are subject to risks associated with differences in prices at different locations, particularly where transportation constraints restrict our ability to deliver oil and gas volumes to the delivery point to which the hedging transaction is indexed. Further, hedging contracts are subject to the risk that the other party may prove unable or unwilling to perform its obligations under such contracts. Any significant nonperformance could adversely affect us financially. 7 12 When we acquire oil and gas properties, our failure to fully identify potential problems, to properly estimate reserves or production rates or costs, or to effectively integrate the acquired operations could seriously harm us. We from time to time acquire oil and gas properties. When we do so, our failure to fully identify potential problems, to properly estimate reserves or production rates or costs, or to effectively integrate the acquired operations could seriously harm us. Although we perform reviews of acquired properties that we believe are consistent with industry practices, we do not review in depth every individual property involved in each acquisition. Ordinarily we focus on higher-value properties and sample the remainder. However, even a detailed review of records and properties may not necessarily reveal existing or potential problems, nor will it permit a buyer to become sufficiently familiar with the properties to assess fully their deficiencies and potential. Inspections may not always be performed on every well, and environmental problems, such as ground water contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, we often assume environmental and other risks and liabilities in connection with acquired properties. There are numerous uncertainties inherent in estimating quantities of proved oil and gas reserves and actual future production rates and associated costs with respect to acquired properties. Actual results may vary substantially from those assumed in the estimates. In addition, acquisitions may have adverse effects on our operating results, particularly during the periods in which the operations of acquired businesses are being integrated into our ongoing operations. Our non-U.S. operations are subject to risks of doing business abroad. Our non-U.S. oil and natural gas exploration, exploitation, development and production activities are subject to certain political and economic risks including, among others: - cancellation or renegotiation of contracts; - disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act; - changes in foreign laws or regulations; - changes in tax laws; - royalty and tax increases; - retroactive tax claims; - expropriation or nationalization of property; - currency fluctuations; - foreign exchange controls; - import and export regulations; - environmental controls; - risks of loss due to civil strife, acts of war, guerilla activities and insurrection; and - other risks arising out of foreign governmental sovereignty over the areas in which our operations are conducted. Consequently, our non-U.S. exploration, exploitation, development and production activities may be substantially affected by factors beyond our control, any of which could materially adversely affect our financial position or results of operations. Furthermore, in the event of a dispute arising from non-U.S. operations, we may be subject to the exclusive jurisdiction of courts outside the United States or may not be successful in subjecting non-U.S. persons to the jurisdiction of the courts in the United States, which could adversely affect the outcome of the dispute. 8 13 A decline in the condition of the capital markets or a substantial rise in interest rates could harm us. If the condition of the capital markets we use to finance our operations materially declines, we might not be able to finance our operations on terms we consider acceptable. In addition, a substantial rise in interest rates would decrease our net cash flows available for reinvestment. RISK FACTORS RELATING TO THE SERIES B PREFERRED STOCK Holders of Series B preferred stock have limited voting rights. The holders of Series B preferred stock will not possess any voting rights, except in certain limited circumstances. Accordingly, the Series B preferred stock will not have sufficient votes to elect one or more directors to EOG's board of directors and will have no voting rights with respect to certain matters upon which holders of common stock may be entitled to vote. See "Description of the Series B Preferred Stock -- Voting Rights" on page 20. Holders of the Series B preferred stock may not be able to use the dividends-received deduction. Although we presently have accumulated earnings and profits, we may not have sufficient current earnings and profits during future fiscal years for the distributions on the preferred stock to qualify as dividends for federal income tax purposes. If any distributions on the Series B preferred stock with respect to any fiscal year are not eligible for the dividends-received deduction because of insufficient current or accumulated earnings and profits, the market value of the Series B preferred stock may decline. See "Certain Federal Income Tax Consequences -- Dividends Received Deduction" on page 22. There is not a public market for the Series B preferred stock. Prior to this exchange offer there has been no public market for the Series B preferred stock, and there can be no assurance that such a market will develop. The Series B preferred stock is not listed on any securities exchange. 9 14 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This prospectus and the documents incorporated by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts, including, among others, statements regarding our future financial position, business strategy, budgets, reserve information, projected levels of production, projected costs and plans and objectives of management for future operations, are forward-looking statements. We typically use words such as "expect", "anticipate", "estimate", "strategy", "intend", "plan" and "believe" or the negative of those terms or other variations of them or by comparable terminology to identify our forward-looking statements. In particular, statements, express or implied, concerning future operating results or the ability to generate income or cash flows are forward-looking statements. Although we believe our expectations reflected in forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations will be achieved. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, among others: - timing and extent of changes in commodity prices for crude oil, natural gas and related products and interest rates; - extent of our success in discovering, developing, marketing and producing reserves and in acquiring oil and gas properties; - political developments around the world; and - financial market conditions. Some of these factors are discussed under "Risk Factors" beginning on page 5 of this prospectus. In light of these risks, uncertainties and assumptions, the events anticipated by our forward-looking statements might not occur. We undertake no obligation to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise. 10 15 BUSINESS GENERAL EOG Resources, Inc., a Delaware corporation organized in 1985, together with its subsidiaries, explores for, develops, produces and markets, natural gas and crude oil primarily in major producing basins in the United States, as well as in Canada and Trinidad and, to a lesser extent, selected other international areas. Our principal producing areas are further described under "-- Exploration and Production" below. At December 31, 1999, our estimated net proved natural gas reserves were 3,175 Bcf and estimated net proved crude oil, condensate and natural gas liquids reserves were 73 MMBbl. At December 31, 1999, approximately 54% of our reserves, on a natural gas equivalent basis, was located in the United States, 16% in Canada and 30% in Trinidad. BUSINESS STRATEGY Our strategy is to maximize the rate of return on invested capital by controlling all operating and capital costs. Our strategy is intended to enhance the generation of cash flow and earnings from each unit of production on a cost-effective basis. We focus our drilling activity toward natural gas deliverability in addition to natural gas reserve enhancement and to a lesser extent crude oil exploitation. We also focus on the cost-effective use of advances in technology associated with gathering, processing and interpretation of 3-D seismic data, developing reservoir simulation models and drilling operations through the use of new and/or improved drill bits, mud motors, mud additives, formation logging techniques and reservoir fracturing methods. These advanced technologies are used, as appropriate, throughout the company to reduce the risks associated with all aspects of oil and gas reserve exploration, exploitation and development. We implement our strategy by emphasizing the drilling of internally generated prospects in order to find and develop low cost reserves. We also make selected tactical acquisitions that give us additional economies of scale or land positions with significant additional prospects. Achieving and maintaining the lowest possible operating cost structure are also important goals in the implementation of our strategy. With respect to information on our working interest in wells or acreage, "net" oil and gas wells or acreage are determined by multiplying "gross" oil and gas wells or acreage by our working interest in the wells or acreage. Unless otherwise defined, all references to wells or acreage are gross. BUSINESS SEGMENTS Our operations are all oil and gas exploration and production related. EXPLORATION AND PRODUCTION NORTH AMERICA OPERATIONS United States. Our principal United States producing areas are the Southwestern Wyoming area, Vernal area of Utah, South Texas area, East Texas area, Mississippi Salt Basin, Offshore Gulf of Mexico area, Southeastern New Mexico area, Val Verde Basin and Midland Basin of West Texas and Mid Continent area. Properties in these areas represented approximately 95% of our United States reserves (on a natural gas equivalent basis) and 97% of our United States net natural gas deliverability as of December 31, 1999. We operate substantially all of these properties. Our other United States oil and gas producing properties are located primarily in other areas of Texas, Utah, New Mexico, Oklahoma, California and Kansas. At December 31, 1999, 85% of our proved United States reserves (on a natural gas equivalent basis) was natural gas and 15% was crude oil, condensate and natural gas liquids. A substantial portion of our 11 16 United States natural gas reserves is in long-lived fields with well-established production histories. We believe that opportunities exist to increase production in many of these fields through continued infill and other development drilling. Southwestern Wyoming Area. Our largest reserve accumulation is located in the Big Piney area in Sublette and Lincoln counties in southwestern Wyoming. We are the holder of the largest productive acreage base in this area, with approximately 265,000 net acres under lease directly within field limits. We operate approximately 824 natural gas and crude oil wells in this area in which we own an 85% average working interest. Deliveries from the area net to us averaged 97 MMcf per day of natural gas and 4.2 MBbl per day of crude oil, condensate, and natural gas liquids in 1999. At December 31, 1999, natural gas deliverability net to us was approximately 95 MMcf per day. The current principal producing intervals are the Almy, Mesaverde and Frontier formations. The Frontier formation, which occurs at 6,500 to 10,000 feet, contains approximately 60% of our Big Piney proved developed reserves. We drilled 47 wells in the Big Piney area in 1999, and we anticipate an active drilling program over the next several years. During 1999, we drilled three wells in the Washakie Basin, Sweetwater County, Wyoming. The Cepo Lewis 21-18 and the Powder Mountain 1-13 initially produced at a combined rate of 12 MMcf per day from the Lewis formation. The Cedar Chest 31-5 initially produced 5 MMcf per day from the Almond formation. We own 20,000 net leasehold acres and 220 square miles of new 3-D seismic and anticipate an active drilling program in the Washakie Basin for several years. Natural gas deliveries from this area net to us averaged approximately 9.1 MMcf per day in 1999. At December 31, 1999, natural gas deliverability net to us was approximately 15 MMcf per day. Vernal Area. In the Vernal area, located primarily in Uintah County, Utah, we operate approximately 334 producing wells and presently control approximately 66,000 net acres. In 1999, natural gas deliveries net to us from the Vernal area averaged 26 MMcf per day. Deliverability at December 31, 1999, was approximately 28 MMcf per day. Production is from the Green River and Wasatch formations located at depths between 4,500 and 8,000 feet. We have an average working interest of approximately 61%. We anticipate numerous drilling opportunities will be available in this area in 2000. South Texas Area. Our activities in South Texas are focused in the Lobo/Roleta, Wilcox and Frio producing horizons. The principal areas of activity are in the Lobo/Roleta trend which occurs primarily in Webb and Zapata counties and the Frio trend in Matagorda County. Using newly acquired 3-D seismic in Webb and Zapata Counties, we added two significant field extensions in the Pok-A-Dot area. Thirteen wells were drilled and completed during 1999. At December 31, 1999, net deliveries from these wells were 28 MMcf per day of natural gas. During 1999, Lobo/Roleta net deliverability averaged approximately 39 MMcf per day of natural gas. In Matagorda County, seven wells were completed in 1999 with a combined initial rate of 55 MMcf per day of natural gas and 1 MBbl per day of condensate net to us. During 1999, Frio net deliverability averaged approximately 34 MMcf per day of natural gas and 1 MBbl per day of condensate. We operate approximately 429 wells in the South Texas area, and production is primarily from the Frio, Roleta and Lobo sands at depths ranging from 5,000 to 16,000 feet. We have approximately 288,000 net leasehold acres and more than 40,000 net mineral fee acres in this area. Natural gas deliveries net to us averaged approximately 142 MMcf per day in 1999. At December 31, 1999, natural gas deliverability from this area net to us was approximately 190 MMcf per day. We drilled 53 wells in the South Texas area in 1999, acquired 480 square miles of new 3-D seismic and leased 35,000 net acres. We anticipate an active drilling program over the next several years. East Texas Area. Our activities in the East Texas area are primarily in the Carthage field, located in Panola County, the North Milton field, located in Harris County, and the Stowell/Big Hill area, located in Jefferson and Chambers Counties. In 1999, we exchanged certain properties with Oxy USA Inc. and acquired working interests in 715 wells located primarily in Gregg and Panola Counties. 12 17 The Carthage field production is primarily from the Cotton Valley, Travis Peak and Pettit formations. At December 31, 1999, we held approximately 37,000 net acres under lease with an average 83% working interest in this area. We drilled 17 wells in the Carthage field in 1999 and we anticipate an active drilling program over the next several years. We have continued our activity in the North Milton field where we now operate 29 wells and hold a 100% working interest in the acreage. We expect to drill additional wells during 2000. We drilled four wells in the Stowell/Big Hill area in 1999, and we expect to continue expansion of the program in 2000. Net deliveries from the East Texas area averaged 76 MMcf per day of natural gas and 2.7 MBbl per day of crude oil, condensate and natural gas liquids in 1999. At December 31, 1999, deliverability from the area was approximately 103 MMcf per day of natural gas with 5.9 MBbl per day of crude oil, condensate and natural gas liquids both net to us. Mississippi Salt Basin. Our activities in this basin target the Cretaceous (Rodessa, Sligo, Hosston and Selma Chalk) formation. We operate 114 producing wells and own approximately 47,000 net acres in Mississippi. We drilled four deep Cretaceous and seventeen Chalk wells during 1999 and plan an expanded program in 2000. Net deliveries from the area during 1999 averaged 15 MMcf per day of natural gas and 0.6 MBbl per day of crude oil and condensate. At December 31, 1999, net deliverability from the area was approximately 15 MMcf per day of natural gas and 1.0 MBbl per day of crude oil and condensate. Offshore Gulf of Mexico Area. Development of the Eugene Island 135 discovery continued with the installation of a second platform and the drilling of one development well in 1999. We anticipate drilling one additional step-out well in 2000. At December 31, 1999, we held an interest in 135 blocks in the Offshore Gulf of Mexico area totaling approximately 342,000 net acres. Of these 135 blocks, located predominantly in federal waters offshore Texas and Louisiana, we operate 85. As part of the property exchange with Oxy USA Inc., which was completed on December 31, 1999, we transferred to Oxy our interests in four producing blocks in the Matagorda Island and Garden Banks area, and the member interests in an indirect wholly owned limited liability company the assets of which included interests in five producing blocks in the Matagorda Island area. These transferred interests collectively represented an average 28 MMcf per day of natural gas production net to us. In 1999, we shifted our strategy in the Offshore Gulf of Mexico from exploration drilling to acquisition and exploitation in core areas of the Louisiana and Texas shelf. We anticipate drilling five to ten wells in this area during 2000. Natural gas deliveries from this area averaged 127 MMcf per day during 1999, net to us, including production from the properties we transferred to Oxy USA Inc. in the property exchange. Southeastern New Mexico Area. We have concentrated our activities in this area in Lea and Eddy Counties in New Mexico. Production is primarily from the Bone Springs, Wolfcamp, Chester, Morrow and Atoka formations. Natural gas deliveries for 1999 averaged 35 MMcf per day, and deliveries of crude oil, condensate and natural gas liquids averaged 2.3 MBbl per day both net to us. At December 31, 1999, deliverability, net to us, was approximately 42 MMcf per day of natural gas and 2.0 MBbl per day of crude oil, condensate and natural gas liquids. We hold 93,000 net acres and have an average working interest of approximately 70%. We plan significant drilling for this area in 2000. Val Verde Basin. Our activities in this area have been concentrated in Crockett, Terrell and Val Verde Counties in Texas. We hold approximately 51,000 net acres and now operate approximately 325 natural gas wells in this area in which we own a 90% average working interest. Production is from the Canyon sands and Strawn limestone at depths from 5,500 to 12,500 feet. At December 31, 1999, natural gas deliverability net to us was approximately 20 MMcf per day. We plan to test several prospects in this basin in 2000. Midland Basin. We have concentrated our activities in this area in Upton and Reagan Counties in Texas. Production is primarily from the Wolfcamp and Strawn formations. In 1999, deliveries net to us averaged 11 MMcf per day of natural gas and approximately 2.4 MBbl per day of crude oil, condensate and natural gas liquids. At December 31, 1999, deliverability net to us was approximately 14 MMcf per day of natural gas and 3.3 MBbl per day of crude oil, condensate and natural gas liquids. We hold 13 18 approximately 40,000 net acres and have an average working interest of approximately 95%. We expect to drill numerous wells in this area during 2000. Mid-Continent Area. We have concentrated our activities in the Mid-Continent area in the Oklahoma and Texas panhandles and in the deeper Anadarko Basin. In 1999, we drilled 57 natural gas wells in the Oklahoma panhandle and five natural gas wells in the Texas panhandle. We control over 400,000 acres in the Oklahoma panhandle, including certain exploration rights on approximately 320,000 acres under a farmout agreement acquired in the property exchange with Oxy USA Inc., and 27,000 acres in the Texas panhandle. Production from the panhandle areas is primarily from the Morrow, Toronto and Council Grove formations. Net deliveries from the panhandle areas averaged approximately 34 MMcf per day of natural gas during 1999. At December 31, 1999 net deliveries from these areas were approximately 42 MMcf per day of natural gas and 0.3 MBbl per day of crude oil and condensate. In 1999, we also drilled 39 wells in other areas of the Anadarko Basin. Deliveries from this area, net to us, averaged approximately 39 MMcf per day of natural gas and 0.3 MBbl per day of crude oil, condensate and natural gas liquids in 1999. We anticipate an active Mid-Continent drilling program for several years. Canada. We explore for and develop, produce and market natural gas, natural gas liquids and crude oil in Western Canada, principally in the provinces of Alberta, Saskatchewan, and Manitoba. We conduct operations from offices in Calgary, Alberta, and produce natural gas and crude oil from five major areas. The Sandhills area in southwestern Saskatchewan is our largest single natural gas producing area in Canada. In 1999, we drilled 254 wells in the area and we acquired additional acreage and wells in the area resulting in deliverability of approximately 51 MMcf per day net to us at December 31, 1999. The Blackfoot area in southeastern Alberta is our second largest natural gas producing area in Canada. In 1999, we drilled 78 new wells and performed numerous recompletions, workovers and facility optimizations resulting in deliverability of approximately 36 MMcf per day and 0.8 MBbl per day of crude oil and condensate net to us at December 31, 1999. Total Canadian natural gas deliverability net to us at December 31, 1999 was approximately 131 MMcf per day, and we held approximately 522,000 net undeveloped acres in Canada. Total Canadian natural gas deliveries net to us for 1999 averaged approximately 115 MMcf per day. We expect to maintain an active drilling program in Western Canada for several years. OUTSIDE NORTH AMERICA OPERATIONS We have producing operations offshore Trinidad, and are evaluating exploration, exploitation and development opportunities in selected other international areas. Trinidad. In November 1992, we were awarded a 95% working interest concession in the South East Coast Consortium Block offshore Trinidad, encompassing three undeveloped fields, previously held by three government-owned energy companies. We have developed the Kiskadee and Ibis fields. We anticipate that the Oilbird field will be developed over the next several years. We are using existing surplus processing and transportation capacity at the Pelican field facilities owned and operated by Trinidad and Tobago government-owned companies to process and transport the production. We are selling natural gas into the local market under a take-or-pay agreement with the National Gas Company of Trinidad and Tobago. In 1999, deliveries net to us averaged 123 MMcf per day of natural gas, which includes 21 MMcf per day of gas balancing volumes relating to a field allocation agreement, and 2.4 MBbl per day of crude oil and condensate. In 1996, we signed a production sharing contract with the Government of Trinidad and Tobago for the modified U(a) Block. We have a 100% working interest in this block. Under the contract, we committed to the acquisition of 3-D seismic data and the drilling of three wells. The first well was drilled in 1998 and was successful, encountering over 400 feet of net pay, resulting in the largest exploration discovery in our history. We recorded 675 Bcfe of proved reserves for this discovery. During the fourth quarter of 1999, we drilled an unsuccessful exploration well. In the first quarter of 2000, we determined that another well was unsuccessful. These wells fulfilled our obligations under the production sharing agreement. 14 19 At December 31, 1999, we held approximately 144,000 net undeveloped acres in Trinidad. In January 2000, we signed a 15-year natural gas supply contract for over 60 MMcf per day with the National Gas Company of Trinidad and Tobago. This natural gas will supply a 1,850 metric ton per day anhydrous ammonia plant that is to be constructed by Caribbean Nitrogen Company Limited, a Trinidadian company in which we have a 16% interest. Negotiations to obtain financing for the plant are in progress. Venezuela. In early 1996, we were awarded exploration, exploitation and developments rights for a block offshore the eastern state of Sucre in Venezuela. We signed agreements with the government of Venezuela and other participants associated with a concession awarded in the Gulf of Paria East. We hold an initial 90% working interest in the joint venture and act as operator. We drilled one exploratory well in 1998 and encountered hydrocarbons. We currently are seeking a third party to complete the remaining commitment under the concession. During 1999, we impaired the carrying value of these assets to reflect our estimated fair value. Other International. We continue to evaluate other selected conventional natural gas and crude oil opportunities outside North America primarily by pursuing other exploitation opportunities in countries where indigenous natural gas and crude oil reserves have been identified. MARKETING Wellhead Marketing. We currently sell our North America wellhead natural gas production on the spot market and under long-term natural gas contracts at market responsive prices. In many instances, the long-term contract prices closely approximate the prices received for natural gas being sold on the spot market. We sell wellhead natural gas volumes from Trinidad at prices that are based on a fixed price schedule with annual escalations. We sell substantially all of our wellhead crude oil and condensate under various terms and arrangements at market responsive prices. Other Marketing. EOG Resources Marketing, Inc., one of our wholly owned subsidiaries, is a marketing company engaging in various marketing activities. Both we and this subsidiary contract to provide, under short and long-term agreements, natural gas to various purchasers and then aggregate the necessary supplies for the sales with purchases from various sources including third-party producers, marketing companies, pipelines or from our own production and arrange for any necessary transportation to the points of delivery. In addition, this subsidiary has purchased and constructed several small gathering systems in order to facilitate its entry into the gathering business on a limited basis. Both we and this subsidiary use other short and long-term hedging and trading mechanisms including sales and purchases utilizing NYMEX-related commodity market transactions. These marketing activities have provided an effective balance in managing a portion of our exposure to commodity price risks for both natural gas and crude oil and condensate wellhead prices. 15 20 DESCRIPTION OF THE SERIES B PREFERRED STOCK The following is a summary of the terms of the Series B preferred stock. This summary does not purport to be complete and is qualified in its entirety by reference to EOG's certificate of incorporation, as amended, and the certificate of designations authorizing the issuance of the shares of Series B preferred stock. Copies of the certificate of incorporation and the certificate of designations may be obtained upon request from EOG. GENERAL Under our certificate of incorporation, our board of directors is authorized, without further stockholder action, to issue from time to time up to 10,000,000 shares of preferred stock in one or more series and with such terms and conditions and at such times and for such consideration as the board of directors or an authorized committee thereof may determine. At the date of this prospectus, 100,000 shares of Series A preferred stock with a liquidation value of $1,000 per share and 500 shares of Series C preferred stock with a liquidation value of $100,000 per share are outstanding. Up to 500 shares of Series D preferred stock with a liquidation value of $100,000 per share may be issued pursuant to a contemporaneous exchange offer by EOG to the holders of the Series C Preferred Stock. The shares will be shares of preferred stock that entitle their holders to receive dividends when, as and if declared by the board of directors, out of funds legally available therefor from dividend period to dividend period. Except as otherwise required by law or as described below, or unless there is no securities depositary, all outstanding shares of Series B preferred stock will be represented by one or more certificates registered in the name of the securities depositary or its nominee and no person acquiring shares will be entitled to receive a certificate for those shares. The certificate or certificates representing the Series B preferred stock will be deposited upon issuance with, or on behalf of, The Depository Trust Company, as securities depositary for the shares, and one or more certificates for all of the shares shall be issued to the securities depositary and registered in the name of Cede & Co. as nominee of DTC. Each certificate shall bear a legend to the effect that such certificate is issued subject to the provisions restricting the transfer of shares contained in the certificate of designations. During a non-payment period, an existing holder may obtain a certificate for the shares owned by it. DTC, which is a New York-chartered limited purpose trust company, performs services for its participants, some of whom, and/or their representatives, own shares of common stock of DTC. DTC will maintain lists of its participants and the shares held by each whether as an existing holder for its own account or as a nominee for another existing holder. When issued, the shares will have a liquidation preference per share equal to the sum of $1,000 plus an amount equal to accumulated and unpaid dividends thereon, whether or not earned or declared to the date of final distribution, and will be fully paid and nonassessable. See "-- Liquidation Rights" on page 19. For each share issued, the amount of $1,000 will be credited to EOG's capital account designated as Series B preferred stock, and the aggregate expenses of the exchange offering of the shares will be charged to the same account. The shares will not be convertible into shares of common stock or any other securities of EOG and will have no preemptive rights. At any time beginning December 15, 2009, the Series B preferred stock will be redeemable, in whole or in part, at the option of EOG, at $1,000 per share plus accumulated and unpaid dividends thereon, whether or not declared. The shares will rank prior to or on a parity with any other shares of preferred stock as to dividends and upon the liquidation, dissolution or winding up of EOG, except under the circumstances described under "-- Voting Rights" on page 20. Except as otherwise provided herein or as limited by law, EOG shall have the right to purchase or otherwise acquire any shares at any price. Any shares purchased or otherwise acquired by EOG may be restored to the status of authorized but undesignated and unissued shares of preferred stock. 16 21 DIVIDENDS Cash dividends on the Series B preferred stock will be cumulative. The record date will not be less than five nor more than 50 days, whether or not a business day, preceding the applicable dividend payment date. If declared, the initial dividend, which will be for the period from and including December 10, 1999 through and including March 14, 2000, will be $18.99 per share and will be payable on March 15, 2000. After the payment of the initial dividend, dividends on the Series B preferred stock will be payable quarterly on March 15, June 15, September 15 and December 15 of each year. The Series B preferred stock is a series of senior preferred stock. When dividends are not paid in full upon the Series B preferred stock and any other series of senior preferred stock ranking equal as to dividends with the Series B preferred stock, all dividends declared upon shares of the Series B preferred stock and any other series of senior preferred stock ranking equal as to dividends shall be declared pro rata so that the amount of dividends declared per share on the Series B preferred stock and such other senior preferred stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series B preferred stock and such other senior preferred stock bear to each other. Except as provided in the preceding sentence, unless full dividends on the Series B preferred stock have been, or contemporaneously are, paid, or declared and a sum sufficient for the payment thereof has been or is set apart for such payment: - no dividends (other than in common stock, junior preferred stock or any other stock of EOG ranking junior to the Series B preferred stock as to dividends and upon liquidation) shall be declared or paid or set aside for payment; - no other distribution shall be made on the common stock, junior preferred stock or any other stock of EOG ranking junior to or equal with the Series B preferred stock as to dividends or upon liquidation; - no common stock, junior preferred stock or any other stock of EOG ranking junior to or equal with the Series B preferred stock as to dividends or upon liquidation shall be redeemed, purchased or otherwise acquired for any consideration, nor shall any moneys be paid to, or made available for, a sinking fund for the redemption of any shares of any such stock by EOG, except by conversion into or exchange for stock of EOG ranking junior to the Series B preferred stock as to dividends and upon liquidation. Changes in the Dividends Received Percentage If, at any time prior to 18 months after December 10, 1999, one or more amendments to the Internal Revenue Code of 1986, as amended (the "Code"), are enacted that reduce the percentage of the dividends received deduction (generally 70%) as specified in Section 243(a)(1) of the Code or any successor provision (the "Dividends Received Percentage"), the amount of each dividend payable (if declared) per share of the Series B preferred stock for dividend payments made on or after the effective date of such change shall be increased. The increase will be determined by multiplying the amount of the dividend payable described above (before adjustment) by a factor determined in accordance with the following formula (the "DRD Formula"), and rounding the result to the nearest cent with one-half cent rounded up); 1-[.35 (1 - .70)] ------------------------------------------------------- 1-[.35 (1 - DRP)] For purposes of the DRD Formula, "DRP" means the Dividends Received Percentage applicable to the dividend in question; provided, however, that if the Dividends Received Percentage applicable to the dividend in question is less than 50%, then the DRP will equal .50. If, however, with respect to any such amendment, EOG shall receive either (1) an unqualified opinion of independent recognized tax counsel based upon the legislation amending or establishing the DRP or upon a published pronouncement of the 17 22 Internal Revenue Service addressing such legislation or (2) a private letter ruling or similar form of assurance from the IRS, in either case to the effect that such an amendment would not apply to dividends payable on the Series B preferred stock, then any such amendment shall not result in the adjustment provided for pursuant to the DRD Formula. No amendment to the Code, other than a change in the percentage of the dividends received deduction set forth in Section 243(a)(1) of the Code or any successor provision prior to 18 months after December 10, 1999, will give rise to an adjustment. Unless the context otherwise requires, references to dividends in this offering memorandum shall mean dividends as adjusted by the DRD Formula. EOG's calculation of the dividends payable, as so adjusted and as certified accurate as to calculation and reasonable as to method by the independent certified public accountants then regularly engaged by EOG, shall be final and not subject to review. If any amendment to the Code that reduces the Dividends Received Percentage is enacted after a dividend payable on a dividend payment date has been declared but before such dividend has been paid, the amount of dividends payable on such dividend payment date will not be increased, but instead, EOG will pay (if declared) an amount, equal to the excess, if any, of (1) the product of the dividends paid by EOG on such dividend payment date and the DRD Formula (where the DRP used in the DRD Formula would be the greater of the reduced Dividends Received Percentage and .50) over (2) the dividends paid by EOG on such dividend payment date, on the next succeeding dividend payment date to holders of the Series B preferred stock on the record date applicable to the succeeding dividend payment date, in addition to any other amounts payable on that dividend payment date. In addition, if any such amendment to the Code is enacted that reduces the Dividends Received Percentage and such reduction retroactively applies to a dividend payment date as to which EOG previously paid dividends on shares of the Series B preferred stock, EOG will pay (if declared) additional dividends on the next succeeding dividend payment date (or if such amendment is enacted after the dividend payable on such dividend payment date has been declared, on the second succeeding dividend payment date following the date of enactment) to holders of the Series B preferred stock on the record date applicable to the succeeding dividend payment date, in an amount equal to the excess, if any, of (x) the product of the dividends paid by EOG on each affected dividend payment date and the DRD Formula (where the DRP used in the DRD Formula would be the greater of the reduced Dividends Received Percentage and .50, applied to each affected dividend payment date) over (y) the dividends paid by EOG on each affected dividend payment date. The additional dividends will not be paid for the enactment of any amendment to the Code if such amendment would not result in an adjustment due to EOG having received either an opinion of counsel or tax ruling referred to in the first paragraph under the caption "Changes in the Dividends Received Deduction". EOG will only make one payment of these additional dividends. EOG will make no adjustments in the dividends payable and EOG will pay no additional dividends because of any amendment to the Code at any time beginning 18 months after December 10, 1999 that reduces the Dividends Received Percentage. In the event that the amount of dividend payable per share of the Series B Preferred Stock shall be adjusted pursuant to the DRD Formula and/or additional dividends are to be paid, EOG will cause notice of each such adjustment and, if applicable, any additional dividends to be sent to the holders of the Series B preferred stock. In addition, if the Dividends Received Percentage is reduced to 50% or less within 18 months after December 10, 1999, EOG may redeem the Series B preferred stock, in whole but not in part, at $1,050 per share, plus accrued and unpaid dividends (whether or not declared and including any increase in dividends payable due to changes in the Dividends Received Percentage). See "-- Redemption". In the past, legislation has been proposed that would have affected certain corporate holders of the Series B preferred stock that own less than 20%, by vote and value, of the stock of EOG. That legislation 18 23 would have reduced the dividends received deduction and changed the holding period required for eligibility for the dividends received deduction applicable to the Series B preferred stock. To EOG's knowledge, no such proposals are currently pending before the United States Congress. Similar legislation, however, may be enacted in the future or other legislation may be enacted that would reduce the dividends received deduction available to corporate holders of the Series B preferred stock. LIQUIDATION RIGHTS In the event of any voluntary or involuntary liquidation, dissolution or winding up of EOG, the holders of shares of the Series B preferred stock will be entitled to receive out of EOG's assets available for distribution to stockholders, before any distribution of assets is made on the common stock, the junior preferred stock or any other class of stock of EOG ranking junior to the Series B preferred stock upon liquidation, liquidating distributions in the amount of $1,000 per share, plus an amount equal to the sum of all accrued and unpaid dividends, whether or not earned or declared, on such shares to the date of final distribution. If, upon any voluntary or involuntary dissolution, liquidation or winding up of EOG, the amounts payable with respect to the Series B preferred stock and any other shares of senior preferred stock ranking equal with the Series B preferred stock as to any such distribution are not paid in full, the holders of the Series B preferred stock and of such other shares will share ratably in any such distribution of EOG's assets in proportion to the full respective distributable amounts to which they are entitled. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of the Series B preferred stock will not be entitled to any further participation in any distribution of assets by EOG. Neither the sale of all or substantially all of the property or business of EOG, nor the merger or consolidation of EOG into or with any other corporation shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, of EOG. REDEMPTION Except as described under "-- Dividends -- Changes in the Dividends Received Percentage", the Series B preferred stock is not redeemable prior to December 15, 2009. Beginning on this date, EOG may redeem all or part of the Series B preferred stock, from time to time upon not less than 30 nor more than 60 days' notice, at a redemption price of $1,000 per share, plus accrued and unpaid dividends, whether or not earned or declared, to the redemption date, including any dividends payable due to changes in the Dividends Received Percentage and any additional dividends. The Series B preferred stock will not benefit from any sinking fund. If EOG redeems less than all of the outstanding shares of the Series B preferred stock, the board of directors will determine (1) the number of shares to be redeemed and (2) an equitable method, e.g., by lot or pro rata, of determining which shares are redeemed. If dividends to the redemption date have not been declared and paid or set apart for payment on all outstanding shares of the Series B preferred stock, no shares of the Series B preferred stock shall be redeemed unless all outstanding shares of the Series B preferred stock are simultaneously redeemed, and EOG shall not purchase or otherwise acquire any shares of the Series B preferred stock. This requirement shall not prevent the purchase or acquisition of shares of the Series B preferred stock pursuant to a tender or exchange offer made on the same terms to all holders of the Series B preferred stock and mailed to the holders of record of the Series B preferred stock at such holders' addresses as they appear on EOG's stock register. If some, but less than all, of the shares of the Series B preferred stock are to be purchased or otherwise acquired pursuant to that tender or exchange offer and the number of shares so tendered exceeds the number of shares to be purchased or otherwise acquired by EOG, the shares of the Series B preferred stock tendered will be purchased or otherwise acquired by EOG on a pro rata basis, with adjustments to eliminate fractions, according to the number of such shares tendered by each holder tendering shares of the Series B preferred stock. Notices of redemption shall be mailed to each record holder of the Series B preferred stock shares to be redeemed at the address of such holder that appears on EOG's stock register. Each notice shall state: 19 24 - the redemption date; - the number of shares to be redeemed; - the redemption price; - the place or places where certificates of such shares of the Series B preferred stock are to be surrendered for payment of the redemption price; and - that dividends on the shares to be redeemed will cease to accrue or accumulate on such redemption date. If fewer than all shares of the Series B preferred stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares to be redeemed from such holder. If notice of redemption has been given, no dividends on the shares of the Series B preferred stock called for redemption shall accrue from and after the redemption date for the shares of the Series B preferred stock called for redemption, unless EOG defaults in providing funds for the payment of the redemption price of the shares called for redemption. These shares shall no longer be deemed to be outstanding, and all rights of the holders as stockholders of EOG, except the right to receive the redemption price, shall end. Upon surrender in accordance with the notice of the certificates representing any shares of the Series B preferred stock redeemed, properly endorsed or assigned for transfer, if the EOG board of directors shall require and the notice shall state, the redemption price set forth in the notice shall be paid out of funds provided by EOG. EOG's obligation to provide funds in accordance with the preceding sentence will be deemed fulfilled if, on or before 12:00 noon, Houston time on the date fixed for redemption, EOG irrevocably deposits with a qualified paying agent, which may be an affiliate of EOG, funds necessary for such redemption, including any accrued and unpaid dividends to the redemption date, with irrevocable instructions and authorization that such funds be applied to the redemption of the shares of the Series B preferred stock called for redemption upon surrender of certificates for such shares, properly endorsed or assigned for transfer. EOG expects that Bank of New York will initially serve as the paying agent. If fewer than all of the shares of the Series B preferred stock represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder. If at any time prior to 18 months after December 10, 1999, one or more amendments to the Code are enacted that reduce the Dividends Received Percentage to 50% or less, and, as a result, the amount of dividends on the Series B preferred stock payable on any Dividend Payment Date may be adjusted upwards as described above under "-- Dividends -- Changes in the Dividends Received Percentage", EOG, at its option, may redeem all, but not less than all, of the outstanding shares of the Series B preferred stock, provided that, within 60 days of the date on which an amendment to the Code is enacted that reduces the Dividends Received Percentage to 50% or less, EOG sends notice to holders of the Series B preferred stock of such redemption. Any redemption of the Series B preferred stock pursuant to this paragraph will take place on the date specified in the notice, which will be not less than 30 nor more than 60 days from the date such notice is sent to holders of the Series B preferred stock. Any such redemption of the Series B preferred stock will be at a redemption price of $1,050 per share, plus accrued and unpaid dividends (whether or not declared and including any increase in dividends payable due to changes in the Dividends Received Percentage). VOTING RIGHTS Except as indicated below or as expressly required by applicable law, the holders of the Series B preferred stock will have no voting rights. If dividends payable on any share or shares of the Series B preferred stock or on any other class or series of senior preferred stock ranking equal with the Series B preferred stock and upon which like voting rights have been conferred and are exercisable, excluding any class or series of cumulative senior preferred stock entitled to elect additional directors by a separate vote ("Voting Preferred Stock") have not been 20 25 paid or declared and set aside for payment for the equivalent of six consecutive full quarterly dividend periods, the number of directors of EOG will be increased by two, without duplication of any increase made pursuant to the terms of any other class or series of Voting Preferred Stock, and the holders of the Series B preferred stock voting as a single class with the holders of the Voting Preferred Stock, will be entitled to elect such two directors to fill such newly created directorships. This right of the holders of the Series B preferred stock and the Voting Preferred Stock shall continue until all accrued but unpaid dividends have been paid. Any such elected directors shall serve until all accrued but unpaid dividends have been paid. The affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares of the Series B preferred stock will be required for any amendment, alteration or repeal of any provisions of the certificate of incorporation, the Series B preferred stock's certificate of designation or any other certificate amendatory of or supplemental to the certificate of incorporation which would adversely affect the powers, preferences, privileges or rights of the Series B preferred stock. The affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares of the Series B preferred stock and any other series of senior preferred stock ranking equal with the Series B preferred stock either as to dividends or upon liquidation, voting as a single class without regard to series, will be required to issue, authorize or increase the authorized amount of, or issue or authorize any obligation or security convertible into or evidencing a right to purchase, any additional class or series of stock ranking prior to the Series B preferred stock as to dividends or upon liquidation, or reclassify any authorized stock of EOG into such prior shares. Such vote will not be required for EOG to take any such actions with respect to any stock ranking on a parity with or junior to the Series B preferred stock. Subject to such affirmative vote or consent of the holders of the outstanding shares of the Series B preferred stock, EOG may, by resolution of its board of directors or as otherwise permitted by law, from time to time alter or change the preferences, rights or powers of the Series B preferred stock. Nothing in this section shall be taken to require a class vote or consent in connection with the authorization, designation, increase or issuance of any shares of any class or series, including additional Series B preferred stock, ranking junior to or equal with the Series B preferred stock as to dividends and liquidation rights or in connection with the authorization, designation, increase or issuance of any bonds, mortgages, debentures or other obligations of EOG. PREEMPTIVE AND CONVERSION RIGHTS Holders of the Series B preferred stock will not have any preemptive rights to purchase or subscribe for any other shares, rights, options or other securities of EOG which at any time may be sold or offered for sale by EOG. The Series B preferred stock is not convertible into shares of any other class or series of capital stock of EOG. TRANSFER AGENT, REGISTRAR AND PAYING AGENT The transfer agent, registrar, dividend disbursing agent, paying agent and redemption agent for the Series B preferred stock is Bank of New York. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a general tax discussion which summarizes the material U.S. federal income tax consequences generally applicable to U.S. persons who are initial holders of the Series B preferred stock. The following discussion is subject to the qualifications, limitations, and assumptions contained herein. As used herein, a U.S. person is: - an individual who is a citizen or resident of the United States for federal income tax purposes; - a corporation, partnership, or other type of entity organized under the laws of the United States or any State; 21 26 - any estate; or - a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. This summary does not discuss all aspects of U.S. federal income tax that may be relevant to investors in light of their particular circumstances or to investors that are subject to special treatment under U.S. federal income tax laws including, without limitation, non-U.S. persons, insurance companies, certain financial institutions, broker-dealers, S corporations, tax exempt organizations, persons holding Series B preferred stock as part of a conversion transaction, as part of a hedge or hedging transaction, as part of a "wash sale", as part of a synthetic security, or as a position in a "straddle". This summary is based on the Code, Treasury Regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as of the date of this offering memorandum. The statutory provisions, regulations, and interpretations on which this summary is based are all subject to change, possibly on a retroactive basis, and differing interpretations. THE U.S. FEDERAL INCOME TAX CONSEQUENCES SUMMARIZED BELOW ARE FOR GENERAL INFORMATION ONLY. EACH PROSPECTIVE INVESTOR SHOULD CONSULT A TAX ADVISOR AS TO THE INVESTOR'S PARTICULAR CONSEQUENCES CONCERNING THE EXCHANGE OFFER AND THE OWNERSHIP OF SERIES B PREFERRED STOCK, INCLUDING THE APPLICATION OF STATE, LOCAL, NON-U.S., AND OTHER FEDERAL TAX LAWS. EXCHANGE An exchange of Series A Preferred Stock for Series B Preferred Stock pursuant to the exchange offer should not be treated as a taxable event for U.S. federal income tax purposes. Accordingly, holders of Series A Preferred Stock who exchange their Series A Preferred Stock for Series B Preferred Stock should not recognize income, gain or loss for U.S. federal income tax purposes and any such holder should have the same adjusted tax basis and holding period in the Series B Preferred Stock as it had in the Series A Preferred Stock immediately before the exchange. DIVIDENDS Distributions with respect to the Series B preferred stock (other than liquidating distributions and certain distributions in redemption of the Series B preferred stock) which are paid out of current or accumulated earnings and profits, as calculated for U.S. federal income tax purposes, generally will constitute dividends taxable as ordinary income. To the extent the amount of any such distribution paid with respect to the Series B preferred stock exceeds current and accumulated earnings and profits, as calculated for U.S. federal income tax purposes, such excess distribution will not constitute a dividend for U.S. federal income tax purposes, but will be treated first as a tax-free return of capital to the extent of the holder's adjusted tax basis in its Series B preferred stock (with a corresponding reduction in such basis) and, to the extent the distribution exceeds such basis, as a capital gain provided the Series B preferred stock is held as a capital asset for U.S. federal income tax purposes. DIVIDENDS RECEIVED DEDUCTION Dividends received by corporate stockholders generally are eligible for the dividends received deduction (the "DRD") as specified in Section 243(a)(1) of the Code. Under such Section, the amount of the DRD generally will equal 70% of the amount of the dividend received. Prospective investors should consider the potential effect of (1) Section 246A of the Code, which reduces the DRD allowed to a corporate stockholder that has incurred indebtedness that is directly attributable to an investment in portfolio stock (as determined for U.S. federal income tax purposes), (2) Section 1059 of the Code, which reduces a stockholder's basis in stock in certain circumstances, (3) Section 246(b) of the Code, which limits the amount of the DRD percentage to a percentage of the stockholder's taxable income, and 22 27 (4) Section 246(c) of the Code, which disallows the DRD in respect of any dividend if the holder of the stock is required to make related payments with respect to positions in substantially similar or related property or certain holding period requirements are not met. Under Section 1059 of the Code, any dividend received by a corporate stockholder that constitutes an "extraordinary dividend" may require a reduction in the adjusted tax basis of the stock by the non-taxed portion of the dividend, but not below zero. If such portion exceeds the corporate stockholder's adjusted tax basis in the stock, the stockholder may be required to treat the excess as gain from the sale of such stock in the year in which the dividend is received. A dividend on preferred stock may be treated as "extraordinary" if (1) it equals or exceeds 5% of the holder's adjusted tax basis in the stock (reduced for this purpose by the non-taxed portion of any prior extraordinary dividend), treating all dividends having ex-dividend dates within an 85-day period as one dividend, or (2) exceeds 20% of the holder's adjusted tax basis in the stock, treating all dividends having ex-dividend dates within a 365-day period as one dividend. You should consult your own tax advisors as to the application of Section 1059 of the Code to any dividends that may be paid with respect to the Series B preferred stock. Under Section 246(c), a corporate stockholder must hold the dividend-paying stock for certain time periods, depending on the type of stock and distribution, before the DRD is allowed. Ordinarily, the DRD is disallowed if the corporate stockholder has not held the dividend-paying stock for more than 45 days during the 90-day period beginning on the date that is 45 days before the date on which such stock becomes ex-dividend with respect to such dividend. Where the corporate stockholder receives dividends with respect to stock having a preference in dividends which are attributable to a period or periods aggregating in excess of 366 days, the DRD is disallowed if such stock is not held for more than 90 days during the 180-day period beginning on the date that is 90 days before the date on which such stock becomes ex-dividend with respect to such dividend. For purposes of calculating the above holding periods, the holding period begins on the day after the stock is acquired and includes the day of disposition. However, the corporate stockholder's holding period is reduced for any period in which (1) the corporate stockholder has diminished its risk of loss by holding an option to sell, is under a contractual obligation to sell, or has made, and not closed, a short sale of substantially identical stock or securities; (2) the corporate stockholder is the grantor of an option to buy substantially identical stock or securities; or (3) the corporate stockholder has diminished its risk of loss by holding one or more other positions with respect to substantially similar or related property as prescribed in the Treasury Regulations. Prospective investors should also consider the effect of the corporate alternative minimum tax, which imposes a minimum tax of 20% of a corporation's alternative minimum taxable income for a taxable year. For purposes of the corporate alternative minimum tax, alternative minimum taxable income is increased by 75% of the amount by which a corporation's adjusted current earnings in the taxable year exceeds its alternative minimum taxable income prior to the addition of an item. The amount of any dividend on the Series B preferred stock that is included in adjusted current earnings will not be reduced by the DRD that is allowed with respect to such dividend. DISPOSITIONS, INCLUDING REDEMPTIONS Any sale, exchange, redemption (except as discussed below) or other disposition of the Series B preferred stock generally will result in taxable gain or loss equal to the difference between the amount received and the stockholder's adjusted tax basis in the Series B preferred stock. Such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the holding period for the Series B preferred stock exceeds one year. In certain cases, a redemption of Series B preferred stock may be treated as a dividend, rather than as a payment in exchange for the Series B preferred stock. In such events, the redemption payment will be treated as ordinary dividend income to the extent that such payment is made out of current or accumulated earnings and profits, as calculated for U.S. federal income tax purposes. The determination of whether the redemption will be treated as a dividend rather than as payment in exchange for the Series B preferred stock will depend upon whether and to what extent the redemption reduces the holder's 23 28 percentage stock ownership interest in EOG. A redemption will be treated as an exchange of stock that produces a capital gain if the redemption either (1) completely terminates the holder's interest in EOG under Section 302(b)(3) of the Code, (2) is "substantially disproportionate" with respect to the holder under Section 302(b)(2) of the Code or (3) is "not essentially equivalent to a dividend" under Section 302(b)(1). A redemption will completely terminate the holder's interest in EOG as a result of the redemption if, as a result of the redemption, the holder no longer has any stock interest in EOG directly or constructively after application of the attribution rules of Section 302(c) of the Code. A redemption will be "substantially disproportionate" with respect to the holder if (1) the ratio of the voting stock owned by the holder (including stock attributed to the holder under Section 302(c) of the Code) immediately after the redemption to all the voting stock of EOG is less than 80% of the same ratio for the voting stock owned by the holder immediately before the redemption, (2) there is a similar percentage reduction in the ownership by the holder of common stock of EOG, and (3) the holder owns less than 50% of the voting stock of EOG. Whether a redemption is "not essentially equivalent to a dividend" with respect to a holder will depend upon the holder's particular circumstances. The IRS has ruled that a minority stockholder in a publicly held corporation whose relative stock interest is minimal and who exercises no control with respect to corporate affairs is considered to have a "meaningful reduction" if such stockholder has a reduction in its percentage stock ownership. In determining whether any of the foregoing tests have been satisfied, the holder is deemed, under the constructive ownership rules of Section 302(c) of the Code, to own any shares in EOG owned by certain related persons and entities and any shares which the holder or certain related persons and entities have an option to acquire. However, because of the ambiguities in applying the foregoing rules, you should consult your tax advisor to determine whether a redemption of Series B preferred stock will be treated as a dividend or as a payment in exchange for the Series B preferred stock. A distribution in redemption of Series B preferred stock that is treated as a dividend may also be considered an extraordinary dividend under Section 1059 of the Code. See "Dividends Received Deduction" above. INFORMATION REPORTING AND BACKUP WITHHOLDING Payments of dividends on shares of Series B preferred stock held of record by U.S. persons, other than corporations and other exempt holders, are required to be reported to the IRS. Backup withholding of U.S. federal income tax at a rate of 31 percent may apply to payments made with respect to shares of Series B preferred stock, as well as payments of proceeds from the sale of shares of Series B preferred stock, to holders that are not "exempt recipients" and that fail to provide certain identifying information, such as the taxpayer identification number of the holder, in the manner required. Individuals generally are not exempt recipients, while corporations and certain other entities generally are exempt recipients. BOOK-ENTRY ISSUANCE The Series B preferred stock initially will be represented by one or more registered, global certificates (collectively the "Global Security"), which will be deposited upon issuance with, or on behalf of, The Depository Trust Company, in New York, New York, and registered in the name of a nominee of DTC, in each case for credit to an account of a direct or indirect participant in DTC as described below. This means that, except as provided below, holders of the Series B preferred stock (1) will not receive a certificate for the Series B preferred stock, (2) will not have the Series B preferred stock registered in their name and (3) will not be considered the registered owners or holders of the Series B preferred stock for any purpose. Accordingly, each person owning a beneficial interest in the Global Security must rely on the procedures of the DTC and, if such person is not one of DTC's participating organizations (collectively, the "Participants"), on the procedures of the Participant through which the person owns its interest, to exercise any rights of a holder of the Series B preferred stock. 24 29 Except as set forth below, the Global Security certificate may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Security may not be exchanged for certificates representing Series B preferred stock except in the limited circumstances described below. DTC has advised EOG and the initial purchasers that DTC is a limited-purpose trust company organized under the laws of the State of New York, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under the Securities Exchange Act of 1934. DTC was created to hold securities for its Participants and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants, by eliminating the need for physical movement of securities certificates. The Participants include securities brokers and dealers, including the initial purchasers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to DTC's book-entry system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants") that clear transactions through or maintain a direct or indirect custodial relationship with a Participant. Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the Participants and the Indirect Participants. DTC has also advised EOG that, pursuant to procedures established by it: - upon deposit of the Global Security, DTC will credit the accounts of Participants with the applicable portion of the shares of Series B preferred stock represented by the Global Security; and - ownership of such shares represented by the Global Security will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC, with respect to the Participants, or by the Participants and the Indirect Participants, with respect to the other owners of beneficial interests in the Global Security. DTC has no knowledge of the actual beneficial owners of the Series B preferred stock. Beneficial owners will not receive written confirmation from DTC of their exchange, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Participants through which the beneficial owners acquired the Series preferred stock. All interests in a Global Security are subject to the procedures and requirements of DTC. The laws of some states require that certain persons take physical delivery in certificated form of securities that they own. Consequently, the ability to transfer beneficial interests in the Global Security to such persons will be impaired to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants and certain banks, the ability of a person having beneficial interests in a Global Security to pledge such interests to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be adversely affected by the lack of a physical certificate evidencing such interests. Payments in respect of the Series B preferred stock registered in the name of DTC or its nominee will be payable by EOG through the paying agent to DTC in its capacity as the registered holder. EOG will treat the persons in whose names the Series B preferred stock, including the Global Security, are registered as the owners of the Series B preferred stock for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither EOG nor any agent thereof nor the initial purchasers has or will have any responsibility or liability for (1) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to, or payments made on account of, beneficial ownership interests in the Global Security, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Security or (2) any other matter relating to the actions and practices of DTC or any of its 25 30 Participants or Indirect Participants. DTC has advised EOG that its current practice, upon receipt of any payment in respect of securities such as the Global Security, is to credit the accounts of the relevant Participants with payment on the payment due dates in amounts proportionate to their respective beneficial interests in the Global Security as shown on DTC's records. Payments by the Participants and the Indirect Participants to the beneficial owners of the Series A preferred stock will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in "street name," and will be the sole responsibility of the Participants or the Indirect Participants, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither EOG nor the initial purchasers will be liable for any delay by DTC or any of the Participants in identifying the beneficial owners of the Series A preferred stock, and each may conclusively rely on, and will be protected in relying on, instructions from DTC or its nominee for all purposes. DTC has advised EOG that it will take any action permitted to be taken by a holder of the Series B preferred stock only at the direction of one or more Participants to whose account with DTC interests in the Global Security are credited. However, DTC reserves the right to exchange the Global Security for certificates representing Series B preferred stock and to distribute that Series A preferred stock to its Participants. The information in this section concerning DTC and its book-entry systems has been obtained from sources that EOG believes to be reliable, but EOG takes no responsibility for the accuracy of this information. The Global Security is exchangeable for certificates representing the Series B preferred stock registered in the name of any person other than DTC or its nominee if (1) DTC (a) notifies EOG that it is unwilling or unable to continue as depositary for the Global Security and EOG then fails to appoint a successor depositary or (b) ceases to be a clearing agency under the Exchange Act, or (2) EOG in its sole discretion elects to cause the issuance of certificates representing the Series B preferred stock. In addition, beneficial interests in the Global Security may be exchanged for certificated Series A preferred stock upon request, but only upon at least 20 days' prior written notice given to EOG by or on behalf of DTC in accordance with customary procedures. In all cases, certificated Series B preferred stock delivered in exchange for any Global Security or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC, in accordance with its customary procedures. 26 31 EXCHANGE OFFER In connection with the sale of the Series A preferred stock, we entered into a registration rights agreement with the initial purchasers of the Series A preferred stock, pursuant to which we agreed to use our reasonable best efforts to file with the Securities and Exchange Commission (the "Commission") a registration statement with respect to the exchange of the Series A preferred stock for a new series of preferred stock. Under the terms of the registration rights agreement, this new series of preferred stock must have terms identical in all material respects to the terms of the Series A preferred stock, except that it must be registered under the Securities Act of 1933 and will be issued free of any covenant regarding registration. Based on existing interpretations of the Securities Act by the staff of the Commission (the "Staff") set forth in several no-action letters to third parties, and subject to the immediately following sentence, EOG believes that the Series B Preferred Stock issued pursuant to this exchange offer may be offered for resale, resold and otherwise transferred by the holders thereof, other than holders who are broker-dealers, without further compliance with the registration and prospectus delivery provisions of the Securities Act. Any purchaser of shares who is an affiliate of EOG or who intends to participate in the exchange offer for the purpose of distributing the exchange shares, or any broker-dealer who purchased the shares from EOG to resell pursuant to Rule 144A or any other available exemption under the Securities Act: - will not be able to rely on the interpretation of the Staff set forth in the above-mentioned no-action letters; - will not be entitled to tender its shares in the exchange offer; and - must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Series B Preferred Stock unless such sale or transfer is made pursuant to any exemption from such requirements. Each holder of the shares who wishes to exchange Series A Preferred Stock for Series B Preferred Stock in the exchange offer will be required to represent that: - it is not an affiliate of EOG; - at the time of the exchange offer, it is not engaged in and does not intend to engage in, and has no arrangement or understanding with any person to participate, in a distribution, within the meaning of the Securities Act, of the Series B Preferred Stock; and - it is acquiring the Series B Preferred Stock in its ordinary course of its business. In addition, in connection with any resales of exchange shares, any broker-dealer, or a "Participating Broker-Dealer", who acquired the shares for its own account as a result of market-making or other trading activities must deliver a prospectus meeting the requirements of the Securities Act. The Commission has taken the position that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to the Series B Preferred Stock, other than resale of an unsold allotment from the original sale of the shares of Series A preferred stock, with this prospectus. Under the registration rights agreement, EOG is required to allow Participating Broker-Dealers and other persons, if any, subject to similar prospectus delivery requirements to use this prospectus in connection with the resale of the Series B preferred stock. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions of this exchange offer, EOG will, unless such Series A preferred stock is withdrawn in accordance with the withdrawal rights specified in "Withdrawal of Tenders" below, accept any and all Series A preferred stock validly tendered prior to 5:00 p.m., New York City time, on the Expiration Date. The date of acceptance for exchange of the Series A preferred stock, and consummation of this exchange offer, is the first business day following the Expiration Date (unless extended as described herein) (the "Exchange Date"). EOG will issue, on or promptly after the Exchange 27 32 Date, one share of Series B preferred stock in exchange for each share of Series A preferred stock tendered and accepted in connection with this exchange offer. The Series B preferred stock issued in connection with this exchange offer will be delivered on the earliest practicable date following the Exchange Date. Holders of Series A preferred stock may tender some or all of their Series A preferred stock in connection with this exchange offer. The terms of the Series B preferred stock are identical in all material respects to the terms of the Series A preferred stock, except that the Series B preferred stock has been registered under the Securities Act and is issued free from any covenant regarding registration, including the payment of additional interest upon a failure to file or have declared effective an exchange offer registration statement or to consummate this exchange offer by certain dates. The Series B preferred stock will evidence the same obligations as the Series A preferred stock and will be issued under and be entitled to the benefits under the Certificate of Designation, Rights and Preferences of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B (the "Series B Certificate of Designation") which is substantially identical to the Certificate of Designation, Rights and Preferences of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A (the "Series A Certificate of Designation"). As of the date of this prospectus, 100,000 shares of the Series A preferred stock is outstanding. In connection with the issuance of the Series A preferred stock, we have arranged for the Series A preferred stock originally purchased by qualified institutional buyers to be issued and transferable in book-entry form through the facilities of The Depository Trust Company ("DTC"), acting as depositary. Except as described under "Book-Entry Issuance," the Series B preferred stock will be issued in the form of a global certificate registered in the name of DTC or its nominee and each holder's interest therein will be transferable in book-entry form through DTC. See "Book-Entry Issuance". Holders of Series A preferred stock do not have any appraisal or dissenters' rights in connection with this exchange offer. Series A preferred stock which is not tendered for exchange or is tendered but not accepted in connection with this exchange offer will remain outstanding and be entitled to the benefits of the Certificate of Designations of the Series A preferred stock, but will not be entitled to any registration rights under the registration rights agreement. EOG shall be deemed to have accepted validly tendered Series A preferred stock when, as and if EOG has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purposes of receiving the Series B preferred stock from us. If any tendered Series A preferred stock is not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, certificates for any such unaccepted Series A preferred stock will be returned, without expense, to the tendering holder thereof as promptly as practicable after the Exchange Date. Holders who tender Series A preferred stock in connection with this exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Series A preferred stock in connection with this exchange offer. EOG will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. See "-- Fees and Expenses". EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" shall mean 5:00 p.m., New York City time, on , 2000, unless extended by EOG in its sole discretion (but in no event to a date later than , 2000), in which case the term "Expiration Date" shall mean the latest date and time to which this exchange offer is extended. We reserve the right, in our sole discretion - to delay accepting any Series A preferred stock, to extend this exchange offer or to terminate this exchange offer and to refuse to accept Series A preferred stock not previously accepted, if any of 28 33 the conditions set forth below under "Conditions to the exchange offer" shall not have been satisfied and shall not have been waived by the Company (if permitted to be waived by EOG) and - to amend the terms of this exchange offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders. If this exchange offer is amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered holders of the Series A preferred stock, and we will extend this exchange offer for a period of five to ten business days, depending on the significance of the amendment and the manner of disclosure to the registered holders, if this exchange offer would otherwise expire during such five to ten business day period. In no event, however, shall the Expiration Date be later than , 2000. If we determine to make a public announcement of any delay, extension, amendment or termination of this exchange offer, we shall have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency. CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other term of this exchange offer, we will not be required to accept for exchange, or to exchange, any Series A preferred stock for any Series B preferred stock, and may terminate or amend this exchange offer before the acceptance of any Series A preferred stock for exchange, if: - any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to this exchange offer which, in our reasonable good faith judgment, would be expected to impair our ability to proceed with this exchange offer, or - any law, statute, rule or regulation is adopted or enacted, or any existing law, statute, rule or regulation is interpreted by the Commission or its Staff, which, in our reasonable good faith judgment, would be expected to impair our ability to proceed with this exchange offer. If we determine in our reasonable good faith judgment that any of the foregoing conditions exist, we may - refuse to accept any Series A preferred stock and return all tendered Series A preferred stock to the tendering holders, - extend this exchange offer and retain all Series A preferred stock tendered prior to the expiration of this exchange offer, subject, however, to the rights of holders who tendered such Series A preferred stock to withdraw their tendered Series A preferred stock which have not been withdrawn. If such waiver constitutes a material change to this exchange offer, we will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered holders, and we will extend this exchange offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders, if this exchange offer would otherwise expire during such five to ten business days. In no event, however, shall the expiration date be a date later than , 2000. PROCEDURES FOR TENDERING To tender in connection with this exchange offer, a holder must complete, sign and date the Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal and mail or otherwise deliver such Letter of Transmittal or such facsimile, together with the Series A preferred stock (unless such tender is being effected pursuant to the procedure for book-entry 29 34 transfer described below) and any other required documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. Any financial institution that is a participant in DTC's Book-Entry Transfer Facility system may make book-entry delivery of the Series A preferred stock by causing DTC to transfer such Series A preferred stock into the Exchange Agent's account in accordance with DTC's procedure for such transfer. Although delivery of Series A preferred stock may be effected through book-entry transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other required documents, must in any case, be transmitted to and received or confirmed by the Exchange Agent at its addresses set forth under the caption "Exchange Agent," below, prior to 5:00 p.m., New York City time, on the Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The tender by a holder of Series A preferred stock will constitute an agreement between such holder and EOG in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. The method of delivery of Series A preferred stock and the Letter of Transmittal and all other documents to the Exchange Agent is at the election and risk of the holders. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the Exchange Agent before the Expiration Date. No Letter of Transmittal of Series A preferred stock should be sent to EOG. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect the tenders for such holders. Any beneficial owner whose Series A preferred stock is registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such owner's own behalf, such owner must, prior to completing and executing the Letter of Transmittal and delivery of such owner's Series A preferred stock, either make appropriate arrangements to register ownership of the Series A preferred stock in such owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. Signature on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined below) unless the Series A preferred stock tendered pursuant thereto are tendered - by a registered holder who has not completed the box entitled "Special Payment Instructions" or "Special Delivery Instructions" on the Letter of Transmittal, or - for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934 (an "Eligible Institution"). If the Letter of Transmittal is signed by a person other than the registered holder of any Series A preferred stock listed therein, such Series A preferred stock must be endorsed by such registered holder or accompanied by a properly completed bond power, in each case signed or endorsed in blank by such registered holder as such registered holder's name appears on such Series A preferred stock. If the Letter of Transmittal or any Series A preferred stock or bond powers are signed or endorsed by trustees, executors, administrators, guardians, attorney-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by 30 35 EOG, evidence satisfactory to us of their authority to so act must be submitted with the Letter of Transmittal. All questions as to the validity, form, eligibility (including time of receipt) and acceptance and withdrawal of tendered Series A preferred stock will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all Series A preferred stock not properly tendered or any Series A preferred stock whose acceptance by us would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to any particular Series A preferred stock either before or after the Expiration Date. Our interpretation of the terms and conditions of this exchange offer (including the instructions in the Letter of Transmittal) will be final and binding, on all parties. Unless waived, any defects or irregularities in connection with tenders of Series A preferred stock must be cured within such time as EOG shall determine. Although we intend to request the Exchange Agent to notify holders of defects or irregularities with respect to tenders of Series A preferred stock, neither EOG, the Exchange Agent nor any other person shall have any duty or incur any liability for failure to give such notification. Tenders of Series A preferred stock will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Series A preferred stock received by the Exchange Agent that is not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. In addition, we reserve the right, as set forth above under the caption "Conditions to this exchange offer," to terminate this exchange offer. By tendering, each holder represents to EOG that, among other things, the Series B preferred stock acquired in connection with this exchange offer is being obtained in the ordinary course of business of the person receiving such Series B preferred stock, whether or not such person is the holder, that neither the holder nor any such other person is engaged in, intends to engage in, or has an arrangement or understanding with any person to participate in the distribution of such Series B preferred stock and that neither the holder nor any such other person is an "affiliate" (as defined in Rule 405 under the Securities Act) of EOG. If the holder is a broker-dealer that will receive Series B preferred stock for its own account in exchange of Series A preferred stock, it will acknowledge that it acquired such Series A preferred stock as the result of market making activities or other trading activities and it will deliver a prospectus in connection with any resale of such Series B preferred stock. See "Plan of Distribution". GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Series A preferred stock and whose Series A preferred stock is not immediately available, or who cannot deliver their Series A preferred stock, the Letter of Transmittal or any other required documents to the Exchange Agent, or cannot complete the procedure for book-entry transfer, prior to the Expiration Date, may effect a tender of their Series A preferred stock if: - The tender is made through an Eligible Institution; - prior to the Expiration Date, the Exchange Agent received from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder, the certificate number or numbers of such Series A preferred stock and the principal amount of Series A preferred stock tendered, stating that the tender is being made thereby and guaranteeing that, within five business days after the Expiration Date, the Letter of Transmittal (or facsimile thereof) together with the certificate or certificates representing the Series A preferred stock to be tendered in proper form for transfer (or confirmation of a book-entry transfer into the Exchange Agent's account at DTC of Series A preferred stock delivered electronically) and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent; and 31 36 - such properly completed and executed Letter of Transmittal (or facsimile thereof) as well as the certificate or certificates representing all tendered Series A preferred stock in proper form for transfer (or confirmation of a book-entry transfer into the Exchange Agent's account at DTC of Series A preferred stock delivered electronically) and all other documents required by the Letter of Transmittal are received by the Exchange Agent within five business days after the Expiration Date. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of Series A preferred stock may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To withdraw a tender of Series A preferred stock in connection with this exchange offer, a written facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must - specify the name of the person who deposited the Series A preferred stock to be withdrawn (the "Depositor"), - identify the Series A preferred stock to be withdrawn (including the certificate number or numbers and principal amount of such Series A preferred stock), - be signed by the Depositor in the same manner as the original signature on the Letter of Transmittal by which such Series A preferred stock was tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the trustee register the transfer of such Series A preferred stock into the name of the person withdrawing the tender, and - specify the name in which any such Series A preferred stock is to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by EOG, whose determination shall be final and binding on all parties. Any Series A preferred stock so withdrawn will be deemed not to have been validly tendered for purposes of this exchange offer and no Series B preferred stock will be issued with respect thereto unless Series A preferred stock so withdrawn is validly re-tendered. Any Series A preferred stock which has been tendered but which is not accepted for exchange or which is withdrawn will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of this exchange offer. Properly withdrawn Series A preferred stock may be retendered by following one of the procedures described above under the caption "Procedures for Tendering" at any time prior to the Expiration Date. EXPIRATION DATE Bank of New York has been appointed as Exchange Agent in connection with this exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus or of the Letter of Transmittal should be directed to the Exchange Agent, at its offices at 101 Barclay Street, 12W, New York, New York 10286. The Exchange Agent's telephone number is (212) 815-2302 and facsimile number is (212) 815-3201. FEES AND EXPENSES EOG will not make any payment to brokers, dealers or others soliciting acceptances of this exchange offer. We will pay certain other expenses to be incurred in connection with this exchange offer, including the fees and expenses of the Exchange Agent, accounting and certain legal fees. 32 37 Holders who tender their Series A preferred stock for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, Series B preferred stock is to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Series A preferred stock tendered, or if tendered Series A preferred stock is registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Series A preferred stock in connection with this exchange offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendered holder. ACCOUNTING TREATMENT The Series B preferred stock will be recorded at the same carrying value as the Series A preferred stock as reflected in EOG's accounting records on the date of the exchange. Accordingly, no gain or loss for accounting purposes will be recognized by EOG on the consummation of this exchange offer. CONSEQUENCES OF FAILURES TO PROPERLY TENDER SERIES A PREFERRED STOCK IN THE EXCHANGE Issuance of the Series B preferred stock in exchange for the Series A preferred stock pursuant to this exchange offer will be made only after timely receipt by the Exchange Agent of such Series A preferred stock, a properly completed and duly executed Letter of Transmittal and all other required documents. Therefore, holders of the Series A preferred stock desiring to tender such Series A preferred stock in exchange for Series B preferred stock should allow sufficient time to ensure timely delivery. We are under no duty to give notification of defects or irregularities with respect to tenders of Series A preferred stock for exchange. Series A preferred stock that are not tendered or that are tendered but not accepted by us, will, following consummation of this exchange offer, continue to be subject to the existing restrictions upon transfer thereof under the Securities Act and, upon consummation of this exchange offer, certain registration rights under the Registration Rights Agreement will terminate. In the event this exchange offer is consummated, we will not be required to register the remaining Series A preferred stock. Remaining Series A preferred stock will continue to be subject to the following restrictions on transfer: - the remaining Series A preferred stock may be resold only if registered pursuant to the Securities Act, if any exemption from registration is available thereunder, or if neither such registration nor such exemption is required by law, and - the remaining Series A preferred stock will bear a legend restricting transfer in the absence of registration or an exemption therefrom. We currently do not anticipate that we will register the remaining Series A preferred stock under the Securities Act. To the extent that Series A preferred stock is tendered and accepted in connection with this exchange offer, any trading market for remaining Series A preferred stock could be adversely affected. 33 38 DESCRIPTION OF CAPITAL STOCK AUTHORIZED AND OUTSTANDING CAPITAL STOCK Our authorized capital stock consists of: - 10,000,000 shares of preferred stock, - 100,000 of which have been designated as Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A, with a liquidation preference of $1,000 per share, - 100,000 shares of which have been designated as Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B, with a liquidation preference of $1,000 per share, and - 500 of which have been designated Flexible Money Market Cumulative Preferred Stock, Series C, with a liquidation preference of $100,000 per share, and - 320,000,000 shares of common stock, $.01 par value. At March 1, 2000, there were 117,211,873 shares of our common stock, 100,000 shares of our Series A preferred stock and 500 shares of our Series C preferred stock outstanding. The following summary description of our capital stock is qualified in its entirety by reference to our certificate of incorporation, as amended. A copy of our certificate of incorporation is filed as an exhibit to the registration statement of which this prospectus is a part. COMMON STOCK Our common stock possesses ordinary voting rights for the election of directors and in respect to other corporate matters, each share being entitled to one vote. The common stock has no cumulative voting rights, meaning that the holders of a majority of the shares voting for the election of directors can elect all the directors if they choose to do so. The common stock carries no preemptive rights and is not convertible, redeemable, assessable or entitled to the benefits of any sinking fund. The holders of common stock are entitled to dividends in such amounts and at such times as may be declared by the board of directors out of funds legally available therefor. Upon liquidation or dissolution of EOG, the holders of common stock are entitled to share ratably in all net assets available for distribution to stockholders after payment of any corporate debts and liquidation and any liquidation preference established for the preferred stock. All outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable. The transfer agent and registrar of the common stock is First Chicago Trust Company of New York, Jersey City, New Jersey. PREFERRED STOCK Under EOG's Restated Certificate of Incorporation, the Board of Directors may provide for the issuance of up to 10,000,000 shares of preferred stock in one or more series. The Board of Directors already has designated 100,000 shares of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A, with a liquidation preference of $1,000 per share, 100,000 shares of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B, with a liquidation preference of $1,000 per share (to be exchanged for the Series A preferred stock pursuant to this exchange offer), 500 shares of Flexible Money Market Cumulative Preferred Stock, Series C, with a liquidation preference of $100,000 per share, and 500 shares of Flexible Market Cumulative Preferred Stock, Series D, with a liquidation preference of $100,000 per share (to be exchanged for the Series C preferred stock pursuant to a contemporaneous exchange offer). The rights, preferences, privileges and restrictions, including liquidation preferences, of the preferred stock of each additional series will be fixed or designated by the Board of Directors pursuant to a certificate of designation without any further vote or action by EOG's stockholders. The issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the 34 39 Company. Upon issuance against full payment of the purchase price therefor, shares of preferred stock offered hereby will be fully paid and nonassessable. RIGHTS PLAN On February 14, 2000, EOG's Board of Directors declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock, par value $.01 per share. The dividend was paid on February 24, 2000 to the stockholders of record on that date. The description and terms of the Rights are set forth in a Rights Agreement, dated February 14, 2000, between First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"), and EOG (the "Rights Agreement"). Our Board has adopted this Rights Agreement to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group which acquires 15% or more of our outstanding common stock without the approval of our Board. The Rights Agreement should not interfere with any merger or other business combination approved by our Board. For those interested in the specific terms of the Rights Agreement, we provide the following summary description. Please note, however, that this description is only a summary, and is not complete, and should be read together with the entire Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to this Registration Statement and is incorporated herein by reference. The Rights. Our Board authorized the issuance of a Right with respect to each issued and outstanding share of common stock on February 24, 2000. The Rights will initially trade with, and will be inseparable from, the common stock. The Rights are evidenced only by certificates that represent shares of common stock. New Rights will accompany any new shares of common stock we issue after February 24, 2000 until the Distribution Date described below. Exercise Price. Each Right will allow its holder to purchase from us one one-hundredth of a share of Series E Junior Participating Preferred Stock ("Preferred Share") for $90, once the Rights become exercisable. This portion of a Preferred Share will give the stockholder approximately the same dividend, voting, and liquidation rights as would one share of common stock. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights. Exercisability. The Rights will not be exercisable until: - 10 days after the public announcement that a person or group has become an "Acquiring Person" by obtaining beneficial ownership of 15% or more of our outstanding common stock, or, if earlier, - 10 business days (or a later date determined by our Board before any person or group becomes an Acquiring Person) after a person or group begins a tender or exchange offer which, if consummated, would result in that person or group becoming an Acquiring Person. We refer to the date when the Rights become exercisable as the "Distribution Date." Until that date, the common stock certificates will also evidence the Rights, and any transfer of shares of common stock will constitute a transfer of Rights. After that date, the Rights will separate from the common stock and be evidenced by book-entry credits or by Rights certificates that we will mail to all eligible holders of common stock. Any Rights held by an Acquiring Person are void and may not be exercised. Our Board may reduce the threshold at which a person or group becomes an Acquiring Person from 15% to not less than 10% of the outstanding common stock. Consequences of a Person or Group Becoming an Acquiring Person. - Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for $90, purchase shares of our common stock with a market value of $180, based on the market price of the common stock prior to such acquisition. 35 40 - Flip Over. If we are later acquired in a merger or similar transaction after the Distribution Date, all holders of Rights except the Acquiring Person may, for $90, purchase shares of the acquiring corporation with a market value of $180 based on the market price of the acquiring corporation's stock, prior to such merger. Preferred Share Provisions. Each one one-hundredth of a Preferred Share, if issued: - will not be redeemable. - will entitle holders to quarterly dividend payments of $.01 per share, or an amount equal to the dividend made on one share of common stock, whichever is greater. - will entitle holders upon liquidation either to receive $1 per share or an amount equal to the payment made on one share of common stock, whichever is greater. - will have the same voting power as one share of common stock. - if shares of our common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock. The value of one one-hundredth interest in a Preferred Share should approximate the value of one share of common stock. Expiration. The Rights will expire on February 24, 2010. Redemption. Our Board may redeem the Rights for $.01 per Right at any time before any person or group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $.01 per Right. The redemption price will be adjusted if we have a stock split or stock dividends of our common stock. Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common stock, our Board may extinguish the Rights by exchanging one share of common stock or an equivalent security for each Right, other than Rights held by the Acquiring Person. Anti-Dilution Provisions. Our Board may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, a reclassification of the Preferred Shares or common stock. No adjustments to the Exercise Price of less than 1% will be made. Amendments. The terms of the Rights Agreement may be amended by our Board without the consent of the holders of the Rights. However, our Board may not amend the Rights Agreement to lower the threshold at which a person or group becomes an Acquiring Person to below 10% of our outstanding common stock. In addition, the Board may not cause a person or group to become an Acquiring Person by lowering this threshold below the percentage interest that such person or group already owns. After a person or group becomes an Acquiring Person, our Board may not amend the Rights Agreement in a way that adversely affects holders of the Rights. LIMITATION ON DIRECTORS' LIABILITY Delaware corporation law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breach of directors' fiduciary duty of care. The duty of care requires that, when acting on behalf of the corporation, directors must exercise an informed business judgment based on all material information reasonably available to them. Absent the limitations authorized by such laws, directors are accountable to corporations and their 36 41 stockholders for monetary damages for conduct constituting gross negligence in the exercise of their duty of care. The Delaware laws enable corporations to limit available relief to equitable remedies such as injunction or rescission. The certificate of incorporation limits the liability of directors of EOG to EOG or its stockholders, in their capacity as directors but not in their capacity as officers, to the fullest extent permitted by the Delaware law. Specifically, directors of EOG will not be personally liable for monetary damages for breach of a director's fiduciary duty as a director, except for liability: - for any breach of the director's duty of loyalty to EOG or its stockholders; - for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; - for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or - for any transaction from which the director derived an improper personal benefit. This provision in the certificate of incorporation may have the effect of reducing the likelihood of derivative litigation against directors, and may discourage or deter stockholders or management from bringing a lawsuit against directors for breach of their duty of care, even though such an action, if successful, might otherwise have benefited EOG and its stockholders. PLAN OF DISTRIBUTION Each broker-dealer that receives Series B preferred stock for its own account pursuant to this exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such Series B preferred stock. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Series B preferred stock received in exchange for Series A preferred stock where such Series A preferred stock was acquired as a result of market-making activities or other trading activities. We have agreed for a period of 180 days after the Expiration Date, to make available a prospectus meeting the requirements of the Preferred Stock Act to any broker-dealer for use in connection with any such resale. In addition, until , all dealers effecting transactions in the Series B preferred stock may be required to deliver a prospectus. EOG will not receive any proceeds from any sale of Series B preferred stock by broker-dealers. Series B preferred stock received by broker-dealers for their own account pursuant to this exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Series B preferred stock or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Series B preferred stock. Any broker-dealer that resells Series B preferred stock that were received by it for its own account pursuant to this exchange offer and any broker or dealer that participates in a distribution of such Series B preferred stock may be deemed to be an "underwriter" within the meaning of the Preferred Stock Act and any profit on any such resale of Series B preferred stock and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Preferred Stock Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Preferred Stock Act. LEGAL MATTERS The validity of the shares to be issued in the share exchange will be passed upon for EOG by Fulbright & Jaworski L.L.P., Houston, Texas, counsel for EOG. 37 42 EXPERTS The consolidated financial statements and schedule included in EOG Resources, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999, incorporated by reference in this prospectus and elsewhere in the registration statement of which this prospectus forms a part, have been audited by Arthur Andersen LLP, independent public accountants, as stated in their report with respect thereto, and are included herein in reliance upon the authority of said firm as experts in giving said report. INDEPENDENT PETROLEUM ENGINEERS The letter report of DeGolyer and MacNaughton, independent petroleum consultants, included as an exhibit to EOG's Annual Report on Form 10-K for the year ended December 31, 1999, and the estimates from the reports of that firm appearing in such Annual Report, are incorporated by reference herein. 38 43 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Restated Certificate of Incorporation, as amended, of the Company (the "Corporation" therein) contains the following provisions relating to indemnification of directors and officers, namely: "Eighth: A.1. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. 2. The foregoing provisions of this Article shall not eliminate or limit the liability of a director for any act or omission occurring prior to the effective date of this Restated Certificate of Incorporation. Any repeal or amendment of this Article by the stockholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or amendment. In addition to the circumstances in which a director of the Corporation is not personally liable as set forth in the foregoing provisions of this Article, a director shall not be liable to the fullest extent permitted by any amendment to the Delaware General Corporation Law enacted that further limits the liability of a director. B.1. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer, of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in paragraph 2. hereof, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of the proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers. II-1 44 2. If a claim under paragraph B.1. of this Article is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. 3. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. 4. The Corporation may maintain insurance at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation law. 5. If this article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each director, officer, employee and agent of the Corporation, and may nevertheless indemnify and hold harmless each employee and agent of the Corporation, as to costs, charges and expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the full extent permitted by applicable law. 6. For purposes of this Article, reference to the"Corporation" shall include, in addition to the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger prior to (or, in the case of an entity specifically designated in a resolution of the Board of Directors, after) the adoption hereof and which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. The Company has purchased liability insurance policies covering the directors and officers of the Company to provide protection where the Company cannot legally indemnify a director or officer and where a claim arises under the Employee Retirement Income Security Act of 1974 against a director or officer based on an alleged breach of fiduciary duty or other wrongful act. II-2 45 ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Exhibits not incorporated herein by reference to a prior filing are designated by an asterisk (*) and are filed herewith; all exhibits not so designated are incorporated herein by reference as indicated.
EXHIBIT NUMBER DESCRIPTION ------- ----------- 3.1(a) -- Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to EOG's Registration Statement on Form S-1 (Registration No. 33-30678), filed August 24, 1989). 3.1(b) -- Certificate of Amendment of Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.1(b) to EOG's Registration Statement on Form S-8 (No. 33-52201), filed February 8, 1994). 3.1(c) -- Certificate of Amendment of Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.1(c) to EOG's Registration Statement on Form S-8 (No. 33-58103), filed March 15, 1995). 3.1(d) -- Certificate of Amendment of Restated Certificate of Incorporation, dated June 11, 1996 (incorporated by reference to Exhibit 3(d) to EOG's Registration Statement on Form S-3 (No. 333-09919), filed August 9, 1996). 3.1(e) -- Certificate of Amendment of Restated Certificate of Incorporation, dated May 7, 1997 (incorporated by reference to Exhibit 3(e) to EOG's Registration Statement on Form S-3 (No. 333-44785), filed January 23, 1998). 3.1(f) -- Certificate of Ownership and Merger, dated August 26, 1999 (incorporated by reference to Exhibit 3.1(f) to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). 3.1(g) -- Certificate of Designations, Preferences and Rights of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A, dated December 8, 1999 (incorporated by reference to Exhibit 3.1(g) to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). 3.1(h) -- Certificate of Designations, Preferences and Rights of Flexible Money Market Cumulative Preferred Stock, Series C, dated December 20, 1999 (incorporated by reference to Exhibit 3.1(h) to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). 3.1(i) -- Certificate of Designations of Series E Junior Participating Preferred Stock, dated February 14, 2000 (incorporated by reference to Exhibit 2 to EOG's Registration Statement on Form 8-A, filed February 18, 2000). *3.1(j) -- Form of Certificate of Designations, Preferences and Rights of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B. 3.2 -- By-laws, dated August 23, 1989, as amended December 12, 1990, February 8, 1994, January 19, 1996, February 13, 1997, May 5, 1998, September 7, 1999 and February 14, 2000 (incorporated by reference to Exhibit 3.1 to EOG's Current Report on Form 8-K, filed February 18, 2000). 4.1 -- Rights Agreement, dated as of February 14, 2000, between EOG Resources, Inc. and First Chicago Trust Company of New York (incorporated by reference to Exhibit 1 to EOG's Registration Statement on Form 8-A, filed February 18, 2000). 4.3(a) -- Amended and Restated 1994 Stock Plan (incorporated by reference to Exhibit 4.3 to EOG's Registration Statement on Form S-8 (No. 33-58103), filed March 15, 1995).
II-3 46
EXHIBIT NUMBER DESCRIPTION ------- ----------- 4.3(b) -- Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 12, 1995 (incorporated by reference to Exhibit 4.3(a) to EOG's Annual Report on Form 10-K for the year ended December 31, 1995). 4.3(c) -- Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 10, 1996 (incorporated by reference to Exhibit 4.3(a) to EOG's Registration Statement on Form S-8 (No. 333-20841), filed January 31, 1997). 4.3(d) -- Third Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 9, 1997 (incorporated by reference to Exhibit 4.3(d) to EOG's Annual Report on Form 10-K for the year ended December 31, 1997). 4.3(e) -- Fourth Amendment to Amended and Restated 1994 Stock Plan, dated effective as of May 5, 1998 (incorporated by reference to Exhibit 4.3(e) to EOG's Annual Report on Form 10-K for the year ended December 31, 1998). 4.3(f) -- Fifth Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 8, 1998 (incorporated by reference to Exhibit 4.3(f) to EOG's Annual Report on Form 10-K for the year ended December 31, 1998). *4.3(g) -- Form of stock certificate representing the Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B. *5.1 -- Opinion of Fulbright & Jaworski, L.L.P. 12 -- Computation of Ratio of Earnings to Fixed Charges (incorporated by reference to Exhibit 12 to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). *23.1 -- Consent of DeGolyer and MacNaughton. *23.2 -- Consent of Arthur Andersen LLP *23.3 -- Consent of Fulbright & Jaworski, L.L.P. (included in Exhibit 5.1). *24 -- Powers of Attorney. *99.1 -- Letter of Transmittal.
- --------------- * Filed herewith. + To be filed by amendment. (b) Financial Statement Schedules. All schedules for which provision is made in applicable accounting regulations of the SEC have been omitted as the schedules are either not required under the related instructions, are not applicable or the information required thereby is set forth in the Company's Consolidated Financial Statements or the Notes thereto. ITEM 22. UNDERTAKINGS The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4 47 Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-5 48 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant 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 May 1, 2000. EOG RESOURCES, INC. By: /s/ DAVID R. LOONEY ---------------------------------- David R. Looney Vice President, Finance POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed as of the 1st day of May, 2000 by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- /s/ MARK G. PAPA Chairman of the Board, Chief Executive - ----------------------------------------------------- Officer (Principal Executive Officer), Mark G. Papa Director /s/ TIMOTHY K. DRIGGERS Vice President and Controller (Principal - ----------------------------------------------------- Accounting Officer) Timothy K. Driggers Vice President, Finance (Principal - ----------------------------------------------------- Financial Officer) David R. Looney * Director - ----------------------------------------------------- Fred C. Ackman * Director - ----------------------------------------------------- Edward Randall, III * Director - ----------------------------------------------------- Edmund P. Segner, III * Director - ----------------------------------------------------- Frank G. Wisner *By /s/ BARRY HUNSAKER, JR. ------------------------------------------------- Barry Hunsaker, Jr. (Attorney-in-fact for persons named)
II-6 49 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------- ----------- 3.1(a) -- Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to EOG's Registration Statement on Form S-1 (Registration No. 33-30678), filed August 24, 1989). 3.1(b) -- Certificate of Amendment of Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.1(b) to EOG's Registration Statement on Form S-8 (No. 33-52201), filed February 8, 1994). 3.1(c) -- Certificate of Amendment of Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.1(c) to EOG's Registration Statement on Form S-8 (No. 33-58103), filed March 15, 1995). 3.1(d) -- Certificate of Amendment of Restated Certificate of Incorporation, dated June 11, 1996 (incorporated by reference to Exhibit 3(d) to EOG's Registration Statement on Form S-3 (No. 333-09919), filed August 9, 1996). 3.1(e) -- Certificate of Amendment of Restated Certificate of Incorporation, dated May 7, 1997 (incorporated by reference to Exhibit 3(e) to EOG's Registration Statement on Form S-3 (No. 333-44785), filed January 23, 1998). 3.1(f) -- Certificate of Ownership and Merger, dated August 26, 1999 (incorporated by reference to Exhibit 3.1(f) to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). 3.1(g) -- Certificate of Designations, Preferences and Rights of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A, dated December 8, 1999 (incorporated by reference to Exhibit 3.1(g) to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). 3.1(h) -- Certificate of Designations, Preferences and Rights of Flexible Money Market Cumulative Preferred Stock, Series C, dated December 20, 1999 (incorporated by reference to Exhibit 3.1(h) to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). 3.1(i) -- Certificate of Designations of Series E Junior Participating Preferred Stock, dated February 14, 2000 (incorporated by reference to Exhibit 2 to EOG's Registration Statement on Form 8-A, filed February 18, 2000). *3.1(j) -- Form of Certificate of Designations, Preferences and Rights of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B. 3.2 -- By-laws, dated August 23, 1989, as amended December 12, 1990, February 8, 1994, January 19, 1996, February 13, 1997, May 5, 1998, September 7, 1999 and February 14, 2000 (incorporated by reference to Exhibit 3.1 to EOG's Current Report on Form 8-K, filed February 18, 2000). 4.1 -- Rights Agreement, dated as of February 14, 2000, between EOG Resources, Inc. and First Chicago Trust Company of New York (incorporated by reference to Exhibit 1 to EOG's Registration Statement on Form 8-A, filed February 18, 2000). 4.3(a) -- Amended and Restated 1994 Stock Plan (incorporated by reference to Exhibit 4.3 to EOG's Registration Statement on Form S-8 (No. 33-58103), filed March 15, 1995). 4.3(b) -- Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 12, 1995 (incorporated by reference to Exhibit 4.3(a) to EOG's Annual Report on Form 10-K for the year ended December 31, 1995).
50
EXHIBIT NUMBER DESCRIPTION ------- ----------- 4.3(c) -- Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 10, 1996 (incorporated by reference to Exhibit 4.3(a) to EOG's Registration Statement on Form S-8 (No. 333-20841), filed January 31, 1997). 4.3(d) -- Third Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 9, 1997 (incorporated by reference to Exhibit 4.3(d) to EOG's Annual Report on Form 10-K for the year ended December 31, 1997). 4.3(e) -- Fourth Amendment to Amended and Restated 1994 Stock Plan, dated effective as of May 5, 1998 (incorporated by reference to Exhibit 4.3(e) to EOG's Annual Report on Form 10-K for the year ended December 31, 1998). 4.3(f) -- Fifth Amendment to Amended and Restated 1994 Stock Plan, dated effective as of December 8, 1998 (incorporated by reference to Exhibit 4.3(f) to EOG's Annual Report on Form 10-K for the year ended December 31, 1998). *4.3(g) -- Form of stock certificate for Series B preferred stock. *5.1 -- Opinion of Fulbright & Jaworski, L.L.P. 12 -- Computation of Ratio of Earnings to Fixed Charges (incorporated by reference to Exhibit 12 to EOG's Annual Report on Form 10-K for the year ended December 31, 1999). *23.1 -- Consent of DeGolyer and MacNaughton. *23.2 -- Consent of Arthur Andersen LLP *23.3 -- Consent of Fulbright & Jaworski, L.L.P. (included in Exhibit 5.1). *24 -- Powers of Attorney. *99.1 -- Letter of Transmittal.
- --------------- * Filed herewith. + To be filed by amendment. EX-3.1J 2 FORM OF CERTIFICATE OF DESIGNATIONS 1 EXHIBIT 3.1(j) EOG RESOURCES, INC. CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, Series B (Liquidation Preference $1,000.00 Per Share) -------------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware --------------------------------------------------- The following resolutions were duly adopted by a duly authorized committee of the Board of Directors (the "Board of Directors" or "Board") of EOG Resources, Inc., a Delaware corporation (the "Corporation"), by unanimous written consent dated as of May 1, 2000 and in accordance with the provisions of Section 151 of the Delaware General Corporation Law: RESOLVED, that pursuant to authority conferred upon the Board of Directors by the provisions of the Restated Certificate of Incorporation, as amended (the "Certificate"), and the By-Laws, as amended, (the "By- Laws"), of the Corporation, this committee of the Board of Directors hereby creates one series of the Preferred Stock, $.01 par value per share, of the Corporation ("Senior Preferred Stock") and fixes the designation, preferences and rights of the shares of such series as follows: 1. Designation. The designation of the series of Senior Preferred Stock created by these resolutions shall be Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B ("Series B Senior Preferred Stock"). The number of authorized shares constituting the Series B Senior Preferred Stock is 100,000. The shares of the Series B Senior Preferred Stock shall have a stated value of $1,000.00 per share. The shares shall constitute a separate series of preferred stock of the Corporation, and shall rank on parity with the 100,000 shares of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A, par value $0.01 per share, liquidation preference $1,000.00 per share (the "Series A Preferred") and the 500 shares of Flexible Money Market Cumulative Preferred Stock, Series C, par value $0.01 per share, liquidation preference $100,000.00 per share (the "Series C Preferred"), and prior to or on a parity with other shares of preferred stock as to dividends and upon the liquidation, dissolution or winding up of the Corporation, except as described herein. 2. Voting Rights. The Series B Senior Preferred Stock shall not have any voting powers, either general or special, except as required by applicable law and as stated herein. (a) Unless the vote or consent of the holders of a greater number of shares shall then be required by law, the consent of the holders of at least 66 2/3% of all of the shares of Series B Senior Preferred Stock at the time outstanding, given in person or by proxy, either in writing or by a vote at a meeting called for the purpose at which the holders of shares of Series B Senior Preferred Stock shall vote together as a separate class, shall be necessary for authorizing, effecting or validating the amendment, alteration or repeal of any of the provisions of the Certificate, of the applicable 2 Certificate of Designation, Preferences and Rights or of any other certificate amendatory of or supplemental to the Certificate (including any certificate of designation, preferences and rights or any similar document relating to any series of Senior Preferred Stock or any series of the Preferred Stock, $.01 par value per share, of the Corporation ("Junior Preferred Stock")) or of the By-laws of the Corporation which would adversely affect the preferences, rights, powers or privileges of the Series B Senior Preferred Stock; (b) Unless the vote or consent of the holders of a greater number of shares shall then be required by law, the consent of the holders of at least 66 2/3% of all of the then outstanding Series B Senior Preferred Stock and all other series of Senior Preferred Stock for which dividends are cumulative ("Cumulative Senior Preferred Stock") ranking on a parity with shares of the Series B Senior Preferred Stock, either as to dividends or upon liquidation, at the time outstanding, given in person or by proxy, either in writing or by a vote at a meeting called for the purpose at which the holders of shares of the Series B Senior Preferred Stock and such other series of Cumulative Senior Preferred Stock shall vote together as a single class without regard to series, shall be necessary for authorizing, effecting, increasing or validating the creation, authorization or issue of any shares of any class of stock of the Corporation ranking prior to the shares of the Series B Senior Preferred Stock as to dividends or upon liquidation, or the reclassification of any authorized stock of the Corporation into any such prior shares, or the creation, authorization or issue of any obligation or security convertible into or evidencing the right to purchase any such prior shares. (c) If a default in preference dividends payable on any share or shares of the Series B Senior Preferred Stock or any other class or series of Cumulative Senior Preferred Stock ranking on a parity with the Series B Senior Preferred Stock, either as to dividends or upon liquidation, and upon which like voting rights have been conferred and are exercisable (excluding any other class or series of Cumulative Senior Preferred Stock expressly entitled to elect additional directors to the Board by a vote separate and distinct from the vote provided for in this paragraph (c),"Voting Cumulative Senior Preferred Stock") shall exist, the number of directors constituting the Board shall be increased by two (without duplication of any increase made pursuant to the terms of any other class or series of Voting Cumulative Senior Preferred Stock), and the holders of the Series B Senior Preferred Stock and the Voting Cumulative Senior Preferred Stock shall have the right, voting together as a single class without regard to class or series (to the exclusion of the holders of Common Stock, Junior Preferred Stock and of any series of Senior Preferred Stock which is not Voting Cumulative Senior Preferred Stock), to elect two directors of the Corporation to fill such newly created directorships. Each director elected by the holders of shares of Series B Senior Preferred Stock and any class or series of Voting Cumulative Preferred Stock in an election provided for by this Section 2(c) (herein called a "Preferred Director") shall continue to serve as such director until all accrued but unpaid dividends have been paid. Any Preferred Director may be removed by, and shall not be removed except by, the vote of the holders of record of the then outstanding shares of Series B Senior Preferred Stock and Voting Cumulative Senior Preferred Stock entitled to have originally voted for such director's election, voting together as a single class without regard to class or series, at a meeting of the Corporation's stockholders, or of the holders of shares of Series B Senior Preferred Stock and Voting Cumulative Senior Preferred Stock, called for that purpose. So long as a default in any preference dividends on the Series B Senior Preferred Stock or any class or series of Voting Cumulative Senior 2 3 Preferred Stock shall exist, (A) any vacancy in the office of a Preferred Director may be filled (except as provided in the following clause (B)) by an instrument in writing signed by the remaining Preferred Director and filed with the Corporation and (B) in the case of the removal of any Preferred Director, the vacancy may be filled by the vote of the holders of the then outstanding shares of Series B Senior Preferred Stock and Voting Cumulative Senior Preferred Stock entitled to have originally voted for the removed director's election, voting together as a single class without regard to class or series, at the same meeting at which such removal shall be voted. Each director appointed as aforesaid shall be deemed for all purposes hereto to be a Preferred Director. Whenever a default in preference dividends shall no longer exist, the number of directors constituting the Board shall be reduced by two. For purposes hereof, a "default in preference dividends" on the Series B Series Preferred Stock or any class or series of Voting Cumulative Senior Preferred Stock shall be deemed to have occurred whenever dividends upon the Series B Senior Preferred Stock or such class or series of Voting Cumulative Senior Preferred Stock have not been paid or declared and set aside for payment for the equivalent of six consecutive full quarterly dividend periods or more and, having so occurred, such default shall be deemed to exist thereafter until, but only until, all dividends on the Series B Senior Preferred Stock or such other class or series of Voting Cumulative Senior Preferred Stock have been paid or declared and set apart for payment. 3. Preferences. The Series B Senior Preferred Stock will be fixed rate cumulative perpetual (i.e., will be redeemable, if at all, solely at the option of the Corporation) Senior Preferred Stock. The Corporation has also issued 100,000 shares of Series A Preferred, which will be exchangeable for shares of the Series B Senior Preferred Stock, and 500 shares of Series C Preferred. 4. Dividends. (a) If declared by the Corporation's Board of Directors, the holders of shares of the Series B Senior Preferred Stock shall be entitled to receive cash dividends thereon at a rate of $71.95 per share per annum which equals 7.195% of the Series A Preferred Stock's liquidation preference payable (if declared) quarterly out of the funds of the Corporation legally available for the payment of dividends. Such dividends shall be payable, when, as and if declared by the Board or a duly authorized committee thereof, on March 15, June 15, September 15 and December 15 of each year (each a "Dividend Payment Date"), commencing March 15, 2000. Each such dividend shall be paid to the holders of record of shares of Series B Senior Preferred Stock as they appear on the stock register of the Corporation on the close of business on such record date, which shall be not less than five nor more than 50 days (whether or not business days) preceding the Dividend Payment Date, as shall be fixed by the Board or a duly authorized committee thereof. The rights of holders of the Series B Senior Preferred Stock shall be cumulative. Accordingly, if the Board fails to declare a dividend on the Series B Senior Preferred Stock payable on a Dividend Payment Date, then holders of Series B Senior Preferred Stock shall have the right to receive a dividend in respect of the dividend period ending on such Dividend Payment Date, and the Corporation will have the obligation to pay dividends accrued for such period, whether or not dividends on the Series B Senior Preferred Stock are declared payable on any future Dividend Payment Date. The amount of dividends payable for any 3 4 period shorter than a full quarterly dividend period shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. (b) If, at any time prior to 18 months after December 10, 1999, one or more amendments to the Internal Revenue Code of 1986, as amended (the "Code"), are enacted that reduce the percentage of the dividends received deduction (generally, 70%) as specified in Section 243(a)(1) of the Code or any successor provision (the "Dividends Received Percentage"), the amount of each dividend payable (if declared) per share of the Series B Senior Preferred Stock for dividend payments made on or after the date of enactment of such change shall be increased by multiplying the amount of the dividend payable determined as described above (before adjustment) by a factor, which shall be the number determined in accordance with the following formula (the "DRD Formula") and rounding the result to the nearest cent (with one-half cent rounded up): 1 - [.35 (1 - .70)] ------------------- 1 - [.35 (1 - DRP)] For purposes of the DRD Formula, "DRP" means the Dividends Received Percentage applicable to the dividend in question; provided, however, that if the Dividends Received Percentage applicable to the dividend in question is less than 50%, then the DRP will equal 0.50. No amendment to the Code, other than a change in the percentage of the dividends received deduction set forth in Section 243(a)(1) of the Code or any successor provision prior to 18 months after the date of original issuance of the Series B Senior Preferred Stock, will give rise to an adjustment. Notwithstanding the foregoing provisions, in the event that, with respect to any such amendment, the Corporation shall receive either (i) an unqualified opinion of independent recognized tax counsel based upon the legislation amending or establishing the DRP or upon a published pronouncement of the Internal Revenue Service (the "IRS") addressing such legislation or (ii) a private letter ruling or similar form of assurance from the IRS, in either case to the effect that such an amendment would not apply to dividends payable on shares of Series B Senior Preferred Stock, then any such amendment shall not result in the adjustment provided for pursuant to the DRD Formula. The Corporation's calculation of the dividends payable, as so adjusted and as certified accurate as to calculation and reasonable as to method by the independent certified public accountants then regularly engaged by the Corporation, shall be final and not subject to review. If any such amendment to the Code which reduces the Dividends Received Percentage is enacted after a dividend payable on a Dividend Payment Date has been declared but before such dividend has been paid, the amount of dividends payable on such Dividend Payment Date shall not be increased; but instead, an amount equal to the excess, if any, of (x) the product of the dividends paid by the Corporation on such Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be equal to the greater of the reduced Dividends Received Percentage 4 5 and 0.50) over (y) the dividends paid by the Corporation on such Dividend Payment Date, will be payable (if declared) on the next succeeding Dividend Payment Date to holders of Series B Senior Preferred Stock on the record date applicable to such succeeding Dividend Payment Date, in addition to any other amounts payable on such Dividend Payment Date. In addition, if any such amendment to the Code is enacted that reduces the Dividends Received Percentage and such reduction retroactively applies to a Dividend Payment Date as to which the Corporation previously paid dividends on shares of Series B Senior Preferred Stock (each, an "Affected Dividend Payment Date"), the Corporation will pay (if declared) additional dividends (the "Retroactive Dividends") on the next succeeding Dividend Payment Date (or if such amendment is enacted after the dividend payable on such Dividend Payment Date has been declared, on the second succeeding Dividend Payment Date following the date of enactment), to holders of Series B Senior Preferred Stock on the record date applicable to such succeeding Dividend Payment Date, in an amount equal to the excess, if any, of (x) the product of the dividends paid by the Corporation on each Affected Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be equal to the greater of the reduced Dividends Received Percentage and 0.50, applied to each Affected Dividend Payment Date) over (y) the dividends paid by the Corporation on each Affected Dividend Payment Date. Retroactive Dividends will not be paid in respect of the enactment of any amendment to the Code if such amendment would not result in an adjustment due to the Corporation having received either an opinion of counsel or tax ruling referred to in the third preceding paragraph. The Corporation will only make one payment of Retroactive Dividends. No adjustments in the dividends payable by the Corporation will be made, and no Retroactive Dividends will be payable by the Corporation, because of any amendment to the Code at any time beginning 18 months after December 10, 1999 that reduces the Dividends Received Percentage. In the event that the amount of dividends payable per share of Series B Senior Preferred Stock shall be adjusted pursuant to the DRD Formula and/or Retroactive Dividends are to be paid, the Corporation will cause notice of each such adjustment and, if applicable any Retroactive Dividends, to be sent to each holder of record of the shares of Series B Senior Preferred Stock at such holder's address as the same appears on the stock register of the Corporation. (c) So long as any shares of Series B Senior Preferred Shares are outstanding, no dividend (other than a dividend in common stock, $.01 par value per share, of the Corporation ("Common Stock"), Junior Preferred Stock or any other stock of the Corporation ranking junior to the Series B Senior Preferred Stock as to dividends and upon liquidation and other than as provided in subsection (d) of this Section 4) shall be declared or paid or set aside for payment, nor shall any other distribution be declared or made upon the Common Stock, Junior Preferred Stock or any other stock of the Corporation ranking junior to or on a parity with the Series B Senior Preferred Stock as to dividends or upon liquidation, nor shall any Common Stock, Junior Preferred Stock or other stock of the Corporation ranking junior to or on a parity with the Series B Senior Preferred Stock as to 5 6 dividends or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (nor shall any funds be paid to, or made available for, a sinking fund for the redemption of any shares of any such stock) by the Corporation (except by conversion into or exchange for stock of the Corporation ranking junior to the Series B Senior Preferred Stock as to dividends and upon liquidation) unless, in each case, the full dividends on all outstanding shares of the Series B Senior Preferred Stock shall have been, or contemporaneously are, paid, or declared and a sum sufficient for the payment thereof has been or is set apart for such payment. (d) When dividends are not paid or declared and set aside for payment in full, as aforesaid, upon the shares of Series B Senior Preferred Stock and any other Senior Preferred Stock ranking on a parity as to dividends with the Series B Senior Preferred Stock, all dividends declared upon shares of Series B Senior Preferred Stock and any other class or series of Senior Preferred Stock ranking on a parity as to dividends with the Series B Senior Preferred Stock shall be declared pro rata so that the amount of dividends declared per share on the Series B Senior Preferred Stock and such other Senior Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the shares of Series B Senior Preferred Stock and such other Senior Preferred Stock bear to each other. 5. Redemption. (a) Except as described in Section 5(f) hereof, the shares of Series B Senior Preferred Stock shall not be redeemable prior to December 15, 2009. On and after such initial redemption date, the Corporation, at its option, may redeem shares of the Series B Senior Preferred Stock, in whole or in part, at any time or from time to time, at a redemption price of $1,000.00 per share, plus accrued and unpaid dividends thereon (whether or not earned or declared) to the redemption date, including any dividends payable due to changes in the Dividends Received Percentage and Retroactive Dividends to the date fixed for redemption. In the event that fewer than all the outstanding shares of Series B Senior Preferred Stock are to be redeemed pursuant to this Section 5(a), the number of shares to be redeemed shall be determined by the Board and the shares to be redeemed shall be determined by lot or pro rata as may be determined by the Board or by any other method as may be determined by the Board in its sole discretion to be equitable. (b) Notwithstanding the foregoing, if dividends to the redemption date have not been declared and paid or set apart for payment on all outstanding shares of Series B Senior Preferred Stock, no shares of Series B Senior Preferred Stock shall be redeemed unless all outstanding shares of Series B Senior Preferred Stock are simultaneously redeemed, and the Corporation shall not purchase or otherwise acquire any shares of Series B Senior Preferred Stock; provided, however, that the foregoing shall not prevent the purchase or acquisition of shares of Series B Senior Preferred Stock pursuant to a tender or exchange offer made on the same terms to all holders of Series B Senior Preferred Stock and mailed to the holders of record of the Series B Senior Preferred Stock at such holders' addresses as the same appear on the stock register of the Corporation; provided, further, that if some, but less than all, of the shares of the Series B Senior Preferred Stock are to be purchased or otherwise acquired pursuant to such tender or exchange offer and the number of shares so tendered exceeds the number of shares so to be purchased or otherwise acquired by the Corporation, the shares 6 7 of the Series B Senior Preferred Stock tendered shall be purchased or otherwise acquired by the Corporation on a pro rata basis (with adjustments to eliminate fractions) according to the number of such shares tendered by each holder tendering shares of Series B Senior Preferred Stock. (c) In the event the Corporation shall redeem shares of Series B Senior Preferred Stock pursuant to subsection (a) of this Section 5, notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the redemption date, to each holder of record of the shares to be redeemed, at such holder's address as the same appears on the stock register of the Corporation. Each such notice shall state: (i) the redemption date; (ii) the number of shares of Series B Senior Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) the redemption price; (iv) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date. (d) Notice having been mailed as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in providing funds for the payment of the redemption price) dividends on the shares of Series B Senior Preferred Stock so called for redemption under subsection (a) of this Section 5 shall cease to accrue, and said shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the redemption price against delivery of such shares) shall cease. Upon surrender in accordance with said notice of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board shall so require and the notice shall so state), such shares shall be redeemed by the Corporation at the applicable redemption price. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof. (e) If the Corporation gives notice of redemption, then, by 12:00 Noon, Houston time, on the redemption date, the Corporation shall irrevocably deposit with a paying agent (which may be an affiliate of the Corporation) (the "Paying Agent"), which shall be a bank or trust company organized and in good standing under the laws of the United States, the State of Texas or the State of New York and having capital, surplus and undivided profits aggregating at least $10,000,000, funds sufficient to pay the applicable redemption price, including any accrued and unpaid dividends to the redemption date, and shall give the Paying Agent irrevocable instructions and authority to pay the redemption price to the holder or holders of record of the shares of Series B Senior Preferred Stock upon surrender of certificates for such shares (properly endorsed or assigned for transfer). If notice of redemption shall have been given, then upon the date of such deposit, all rights of holders of the shares so called for redemption shall cease, except the right of the holders of such shares to receive the redemption price against delivery of such shares, but without interest, and such shares shall cease to be outstanding. The Corporation shall be entitled to receive, from time to time, from the Paying Agent, the interest, if any, earned on such funds deposited with the Paying Agent, and the holders of any shares to be redeemed with such funds shall have no claim to any such interest. Any funds so deposited which are unclaimed at the end of two years from such redemption date shall upon demand 7 8 be repaid to the Corporation, after which the holders of the shares of Series B Senior Preferred Stock so called for redemption shall be entitled to look only to the Corporation for payment thereof. (f) If at any time prior to 18 months after December 10, 1999, one or more amendments to the Code are enacted that reduce the Dividends Received Percentage to 50% or less, and, as a result, the amount of dividends on the Series B Senior Preferred Stock payable on any Dividend Payment Date may be adjusted upwards pursuant to Section 4(b) hereof, the Corporation, at its option, may redeem all, but not less than all, of the outstanding shares of the Series B Senior Preferred Stock, provided that, within 60 days of the date on which an amendment to the Code is enacted that reduces the Dividends Received Percentage to 50% or less, the Corporation sends notice to the holders of the Series B Senior Preferred Stock of such redemption. Any redemption of the Series B Senior Preferred Stock pursuant to this Section will take place on the date specified in the notice, which will be not less than 30 nor more than 60 days from the date such notice is sent to the holders of the Series B Senior Preferred Stock. Any such redemption of the Series B Senior Preferred Stock will be at a redemption price of $1,050 per share, plus all accrued and unpaid dividends (whether or not declared and including any increase in dividends payable due to changes in the Dividends Received Percentage). 6. Liquidation Preference. (a) Upon the dissolution, liquidation or winding up of the Corporation, voluntary or involuntary, the holders of the then outstanding shares of Series B Senior Preferred Stock shall be entitled to receive and be paid out of the assets of the Corporation available for distribution to its stockholders, before any payment or distribution of assets shall be made on the Common Stock, the Junior Preferred Stock or any other class of stock of the Corporation ranking junior to the Series B Senior Preferred Stock upon liquidation, the amount of $1,000.00 per share, plus an amount equal to the sum of all accrued and unpaid dividends (whether or not earned or declared) on such shares to the date of final distribution. (b) Neither the sale of all or substantially all the property or business of the Corporation nor the merger or consolidation of the Corporation into or with any other corporation or the merger or consolidation of any other corporation into or with the Corporation, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 6. (c) After the payment to the holders of the shares of Series B Senior Preferred Stock of the full preferential amounts provided for in this Section 6, the holders of the shares of Series B Senior Preferred Stock, as such, shall have no right or claim to any of the remaining assets of the Corporation. (d) In the event the assets of the Corporation available for distribution to the holders of the shares of Series B Senior Preferred Stock and any other class or series of shares of Senior Preferred Stock ranking on a parity with the Series B Senior Preferred Stock as to such distribution upon any dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all preferential amounts to which such holders are entitled, no such 8 9 distribution shall be made on account of the Series B Senior Preferred Stock or any shares of any other class or series of Senior Preferred Stock ranking on a parity with the shares of Series B Senior Preferred Stock upon such dissolution, liquidation or winding up, unless proportionate distributive amounts shall be paid on account of the shares of Series B Senior Preferred Stock and such shares of Senior Preferred Stock ratably, in proportion to the full distributable amounts for which holders of all such parity shares are respectively entitled upon such dissolution, liquidation or winding up. 7. Conversion and Exchange. The holders of shares of the Series B Senior Preferred Stock shall not have any rights to convert such shares into, or to exchange such shares for, shares of Common Stock, any other class or classes of capital stock (or any other security) or any other series of any class or classes of capital stock (or any other security) of the Corporation. 8. Priority as to Certain Distributions. As a series of Senior Preferred Stock, the shares of the Series B Senior Preferred Stock shall be entitled to such rights and priorities, and subject to such limitations, as to dividends as are set forth in these resolutions and in the Certificate. 9. Sinking Fund. No sinking fund shall be provided for the purchase or redemption of shares of the Series B Senior Preferred Stock. 10. Ranking. Without limitation to any provision set forth in these resolutions or in the Restated Certificate, it is hereby confirmed and expressly declared that the Series B Senior Preferred Stock constitutes a series of Senior Preferred Stock and, accordingly, ranks senior to all shares of Junior Preferred Stock as to dividends and distributions of assets upon liquidation, dissolution or winding up. For purposes hereof, any class or series or stock of the Corporation shall be deemed to rank: (a) prior to the Series B Senior Preferred Stock as to dividends or distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of Series B Senior Preferred Stock; (b) on a parity with the Series B Senior Preferred Stock as to dividends or distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend rates, dividend payment dates, redemption prices or liquidation preferences per share thereof are different from those of the Series B Senior Preferred Stock, if the holders of such class or series of stock and of the Series B Senior Preferred Stock shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in proportion to their respective dividend amounts or liquidation preferences, without preference or priority to the holders of Series B Senior Preferred Stock; and (c) junior to the Series B Senior Preferred Stock as to dividends or distribution of assets upon liquidation, dissolution or winding up, if such stock shall be Common Stock or Junior Preferred Stock or if the holders of the Series B Senior Preferred Stock shall be entitled to the receipt of dividends 9 10 or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of shares of such class or series. 11. Exclusion of Other Rights. Unless otherwise required by law, shares of the Series B Senior Preferred Stock shall not have any rights, including preemptive and subscription rights, or preferences other than those specifically set forth herein or as provided by applicable law. 12. Miscellaneous. The Board of Directors may interpret the provisions hereof to resolve any inconsistency or ambiguity which may arise or be revealed and if such inconsistency or ambiguity reflects an inaccurate provision hereof, the Board of Directors may, in appropriate circumstances, authorize the filing of a certificate of correction pursuant to Delaware law. 13. Change in Number of Shares. As provided in the Certificate, but subject to applicable law, the Board of Directors may increase or decrease the number of shares of this series of Senior Preferred Stock subsequent to the issue of shares of this series, but not below the number of shares of Series B Senior Preferred Stock then outstanding. FURTHER RESOLVED, that the 100,000 shares of Series B Senior Preferred Stock authorized for issuance pursuant to the resolutions of this duly authorized committee of the Board of Directors all constitute Preferred Stock within the 10,000,000 shares authorized pursuant to the Certificate of the Corporation. 10 11 IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by David R. Looney, its Vice President, this ___ day of ________, 2000 EOG RESOURCES, INC. By: ------------------------------------- David R. Looney, Vice President 11 EX-4.3G 3 FORM OF STOCK CERTIFICATE F/SERIES B PREFERRED STK 1 EXHIBIT 4.3(g) EOG RESOURCES, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE THIS CERTIFICATE IS TRANSFERABLE CUSIP 26875P 40 8 IN NEW YORK FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES B THIS CERTIFIES THAT Is the owner of FULLY PAID AND NON-ASSESSABLE SHARES OF FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES B, PAR VALUE $.01, $1,000.00 LIQUIDATION PREFERENCE PER SHARE, OF EOG Resources, Inc. transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized Officers. Dated: Countersigned and Registered: BANK OF NEW YORK President Transfer Agent and Registrar By Secretary Authorized Signature 2 N O T I C E : THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF A NATIONAL OR REGIONAL OR OTHER RECOGNIZED STOCK EXCHANGE IN CONFORMANCE WITH A SIGNATURE GUARANTEE MEDALLION PROGRAM. EOG RESOURCES, INC. (THE "CORPORATION") WILL FURNISH TO THE HOLDER OF THIS SECURITY, UPON REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF THE SHARES OF EACH CLASS AND SERIES AUTHORIZED TO BE ISSUED, SO FAR AS THE SAME HAVE BEEN DETERMINED, AND OF THE AUTHORITY, IF ANY, OF THE BOARD TO DIVIDE THE SHARES INTO CLASSES OR SERIES AND TO DETERMINE AND CHANGE THE RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF ANY CLASS OR SERIES, SUCH REQUEST MAY BE MADE TO THE SECRETARY OF THE CORPORATION OR TO THE TRANSFER AGENT NAMED ON THIS CERTIFICATE. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT -......Custodian...... TEN ENT - as tenants by the entireties (Cust) (Minor) JT TEN - as joint tenants with right Under Uniform Gifts to Minors Act of survivorship and not as (State) tenants in common Additional abbreviations may also be used though not in the above list. For Value Received, ___________________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ______________________________________ ______________________________________ ________________________________________________________________________________ (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE) ________________________________________________________________________________ __________________________________________________________________________Shares of the stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ________________________________________________________________________Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated __________________________ EX-5.1 4 OPINION OF FULBRIGHT & JAWORSKI, L.L.P. 1 EXHIBIT 5.1 [LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P.] May 1, 2000 EOG Resources, Inc. 1200 Smith Street, Suite 300 Houston, Texas 77002 Gentlemen: We have acted as counsel for EOG Resources, Inc., a Delaware corporation (the "Company"), in connection with the Company's Registration Statement on Form S-4 (the "Registration Statement") relating to the registration under the Securities Act of 1933, as amended (the "Securities Act"), and the proposed offer by the Company to exchange (the "Exchange Offer") Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B (up to 100,000 shares) (the "Exchange Shares"), for outstanding Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A (100,000 shares outstanding) (the "Outstanding Shares"). The Outstanding Shares were issued pursuant to the Certificate of Designation, Preferences and Rights of the Outstanding Shares and the Exchange Shares will be issued pursuant to the Certificate of Designation, Preferences and Rights of the Exchange Shares (collectively, the "Certificates"). We have examined (i) the Restated Certificate of Incorporation and the Bylaws of the Company, each as amended to date, (ii) the Certificates, (iii) the Registration Statement, and (iv) such certificates, statutes and other instruments and documents as we considered appropriate for purposes of the opinions hereafter expressed. In connection with this opinion, we have assumed that (i) the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective, and (ii) the Exchange Shares will be issued and exchanged in compliance with applicable federal and state securities laws and in the manner stated in the Registration Statement. 2 EOG Resources, Inc. May 1, 2000 Page 2 Based upon the foregoing, subject to the qualifications hereinafter set forth, and having regard for such legal considerations as we have deemed relevant, we are of the opinion that the Exchange Shares proposed to be issued pursuant to the Exchange Offer have been duly authorized for issuance and, subject to the Registration Statement becoming effective under the 1933 Act and to compliance with any applicable state securities laws, when issued, delivered and exchanged in accordance with the Exchange Offer, will be validly issued, fully paid and non-assessable. The opinions expressed herein are limited exclusively to the federal laws of the United States of America, the laws of the State of Texas and the General Corporation Law of the State of Delaware, the applicable provisions of the Delaware constitution and reported decisions concerning such laws and we are expressing no opinion as to the effect of the laws of any other jurisdiction. This opinion is rendered solely for the benefit of the Company and is not to be used, circulated, copied, quoted or referred to without our prior written consent. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the statements made with respect to us under the caption "Legal Matters" in the Prospectus included as part of the Registration Statement. Very truly yours, Fulbright & Jaworski L.L.P. EX-23.1 5 CONSENT OF DEGOLYER AND MACNAUGHTON 1 EXHIBIT 23.1 DEGOLYER AND MACNAUGHTON One Energy Square Dallas, Texas 75206 May 1, 2000 EOG Resources, Inc. 1200 Smith, Suite 300 Houston, Texas 77002 Gentlemen: In connection with this Registration Statement of Form S-4 (the "Registration Statement"), to be filed with the Securities and Exchange Commission by EOG Resources, Inc., a Delaware corporation (the "Company"). DeGolyer and MacNaughton (the "firm") hereby consents to the incorporation by reference in this Registration Statement of the references to the firm and to the opinions delivered to the Company, all included or incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 1999, regarding the comparison of estimates prepared by the firm with those furnished to it by the Company of the proved oil, condensate, natural gas liquids, and natural gas reserves of certain selected properties owned by the Company. The opinions are contained in our letter reports dated January 13, 1998, January 11, 1999, and February 8, 2000, for estimates as of December 31, 1997, December 31, 1998, and December 31, 1999, respectively. The opinions are referred to in the section "Supplemental Information to Consolidated Financial Statements -- Oil and Gas Producing Activities" in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Very truly yours, DeGolyer and MacNaughton EX-23.2 6 CONSENT OF ARTHUR ANDERSEN, L.L.P. 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 March 2, 2000 included in EOG Resources, Inc.'s Form 10-K for the year ended December 31, 1999 and to all references to our Firm included in this registration statement. ARTHUR ANDERSEN LLP Houston, Texas May 1, 2000 EX-24 7 POWERS OF ATTORNEY 1 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer or director, or both, of EOG Resources, Inc., a Delaware corporation (the "Company"), does hereby constitute and appoint Barry Hunsaker, Jr., Patricia L. Edwards and Timothy K. Driggers their true and lawful attorneys and agents (each with authority to act alone), to do any and all acts and things and to execute any and all instruments which said attorneys and agents deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, as amended, and any rules, regulations, and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration under the said Securities Act of the offering, sale and delivery of certain securities of said corporation as set forth below (the "Securities"), including specifically, but without limiting the generality of the foregoing, the power and authority to sign for and on behalf of the undersigned the name of the undersigned as officer or director, or both, of the Company to Registration Statements or to any amendments (including post-effective amendments) thereto filed with the Securities and Exchange Commission in respect of said Securities, and to any instrument or document filed as part of, as an exhibit to or in connection with said Registration Statements or amendments, and the undersigned does hereby ratify and confirm as his own act and deed all that said attorney and agent shall do or cause to be done by virtue hereof. The Securities of the Company covered by this power of attorney are: (i) Debt securities of the Company consisting of debentures (whether senior, senior subordinated or subordinated), notes and/or other unsecured evidences of indebtedness, including without limitation debt securities convertible into Common Stock, par value $.01 per share ("Common Stock"), of the Company and the related Series E Junior Participating Preferred Stock Rights ("Rights"); (ii) Common Stock (including any associated Rights), including without limitation Common Stock (including any associated Rights) which may be issued upon conversion of any securities of the Company or any of its subsidiaries; (iii) Preferred stock, par value $.01 per share, of the Company and depositary shares and receipts representing fractional shares of such stock; and (iv) Debt or equity securities of any subsidiary of the Company, including securities convertible into Common Stock (including any associated Rights). IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st day of May, 2000. /s/ EDWARD RANDALL, III ---------------------------------- Edward Randall, III 2 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer or director, or both, of EOG Resources, Inc., a Delaware corporation (the "Company"), does hereby constitute and appoint Barry Hunsaker, Jr., Patricia L. Edwards and Timothy K. Driggers their true and lawful attorneys and agents (each with authority to act alone), to do any and all acts and things and to execute any and all instruments which said attorneys and agents deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, as amended, and any rules, regulations, and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration under the said Securities Act of the offering, sale and delivery of certain securities of said corporation as set forth below (the "Securities"), including specifically, but without limiting the generality of the foregoing, the power and authority to sign for and on behalf of the undersigned the name of the undersigned as officer or director, or both, of the Company to Registration Statements or to any amendments (including post-effective amendments) thereto filed with the Securities and Exchange Commission in respect of said Securities, and to any instrument or document filed as part of, as an exhibit to or in connection with said Registration Statements or amendments, and the undersigned does hereby ratify and confirm as his own act and deed all that said attorney and agent shall do or cause to be done by virtue hereof. The Securities of the Company covered by this power of attorney are: (i) Debt securities of the Company consisting of debentures (whether senior, senior subordinated or subordinated), notes and/or other unsecured evidences of indebtedness, including without limitation debt securities convertible into Common Stock, par value $.01 per share ("Common Stock"), of the Company and the related Series E Junior Participating Preferred Stock Rights ("Rights"); (ii) Common Stock (including any associated Rights), including without limitation Common Stock (including any associated Rights) which may be issued upon conversion of any securities of the Company or any of its subsidiaries; (iii) Preferred stock, par value $.01 per share, of the Company and depositary shares and receipts representing fractional shares of such stock; and (iv) Debt or equity securities of any subsidiary of the Company, including securities convertible into Common Stock (including any associated Rights). IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st day of May, 2000. /s/ EDMUND P. SEGNER, III --------------------------------- Edmund P. Segner, III 3 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer or director, or both, of EOG Resources, Inc., a Delaware corporation (the "Company"), does hereby constitute and appoint Barry Hunsaker, Jr., Patricia L. Edwards and Timothy K. Driggers their true and lawful attorneys and agents (each with authority to act alone), to do any and all acts and things and to execute any and all instruments which said attorneys and agents deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, as amended, and any rules, regulations, and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration under the said Securities Act of the offering, sale and delivery of certain securities of said corporation as set forth below (the "Securities"), including specifically, but without limiting the generality of the foregoing, the power and authority to sign for and on behalf of the undersigned the name of the undersigned as officer or director, or both, of the Company to Registration Statements or to any amendments (including post-effective amendments) thereto filed with the Securities and Exchange Commission in respect of said Securities, and to any instrument or document filed as part of, as an exhibit to or in connection with said Registration Statements or amendments, and the undersigned does hereby ratify and confirm as his own act and deed all that said attorney and agent shall do or cause to be done by virtue hereof. The Securities of the Company covered by this power of attorney are: (i) Debt securities of the Company consisting of debentures (whether senior, senior subordinated or subordinated), notes and/or other unsecured evidences of indebtedness, including without limitation debt securities convertible into Common Stock, par value $.01 per share ("Common Stock"), of the Company and the related Series E Junior Participating Preferred Stock Rights ("Rights"); (ii) Common Stock (including any associated Rights), including without limitation Common Stock (including any associated Rights) which may be issued upon conversion of any securities of the Company or any of its subsidiaries; (iii) Preferred stock, par value $.01 per share, of the Company and depositary shares and receipts representing fractional shares of such stock; and (iv) Debt or equity securities of any subsidiary of the Company, including securities convertible into Common Stock (including any associated Rights). IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st day of May, 2000. /s/ FRED C. ACKMAN ------------------------- Fred C. Ackman 4 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer or director, or both, of EOG Resources, Inc., a Delaware corporation (the "Company"), does hereby constitute and appoint Barry Hunsaker, Jr., Patricia L. Edwards and Timothy K. Driggers their true and lawful attorneys and agents (each with authority to act alone), to do any and all acts and things and to execute any and all instruments which said attorneys and agents deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, as amended, and any rules, regulations, and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration under the said Securities Act of the offering, sale and delivery of certain securities of said corporation as set forth below (the "Securities"), including specifically, but without limiting the generality of the foregoing, the power and authority to sign for and on behalf of the undersigned the name of the undersigned as officer or director, or both, of the Company to Registration Statements or to any amendments (including post-effective amendments) thereto filed with the Securities and Exchange Commission in respect of said Securities, and to any instrument or document filed as part of, as an exhibit to or in connection with said Registration Statements or amendments, and the undersigned does hereby ratify and confirm as his own act and deed all that said attorney and agent shall do or cause to be done by virtue hereof. The Securities of the Company covered by this power of attorney are: (i) Debt securities of the Company consisting of debentures (whether senior, senior subordinated or subordinated), notes and/or other unsecured evidences of indebtedness, including without limitation debt securities convertible into Common Stock, par value $.01 per share ("Common Stock"), of the Company and the related Series E Junior Participating Preferred Stock Rights ("Rights"); (ii) Common Stock (including any associated Rights), including without limitation Common Stock (including any associated Rights) which may be issued upon conversion of any securities of the Company or any of its subsidiaries; (iii) Preferred stock, par value $.01 per share, of the Company and depositary shares and receipts representing fractional shares of such stock; and (iv) Debt or equity securities of any subsidiary of the Company, including securities convertible into Common Stock (including any associated Rights). IN WITNESS WHEREOF, the undersigned has subscribed these presents this 1st day of May, 2000. /s/ FRANK G. WISNER -------------------------- Frank G. Wisner EX-99.1 8 LETTER OF TRANSMITTAL 1 EXHIBIT 99.1 LETTER OF TRANSMITTAL EOG RESOURCES, INC. OFFERS TO EXCHANGE ITS FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES B WHICH HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES A PURSUANT TO THE PROSPECTUS DATED , 2000. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000 UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: BANK OF NEW YORK By mail: By hand: By overnight mail: For information call: Confirm: Facsimile:
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned acknowledges that he or she has received the Prospectus, dated , 2000 (the "Prospectus"), of EOG Resources, Inc. (the "Company") and this Letter of Transmittal (the "Letter of Transmittal"), which together describe the Company's offer (the "Exchange Offer") to exchange shares of its Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B, $1,000.00 liquidation preference (the "Series B"), which has been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement, for shares of its outstanding Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A, $1,000.00 liquidation preference (the "Series A") . The terms of the Series B preferred stock are identical in all respects to the Series A preferred stock, except the Series B has been registered under the Securities Act and, therefore, will not bear legends restricting its transfer. Series A preferred stock may be tendered in whole or in part in integral multiples of $1,000 in excess thereof. The term "Expiration Date" shall mean 5:00 p.m. New York City time, on , 2000 unless the Exchange Offer is extended as provided in the Prospectus, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. The term "Holder" with respect to the Exchange Offer means any person in whose name Series A preferred stock is registered on the books of the Company or any other person who has obtained a properly completed stock power from the registered holder. Capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus. 2 The Letter of Transmittal is to be completed by holders of Series A preferred stock if (i) certificates representing the Series A preferred stock are to be forwarded herewith, or (ii) tender of Series A preferred stock is to be made by book entry transfer to an account maintained by Bank of New York (the "Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the "The Exchange Offer -- Procedures for Tendering" in the Prospectus, or (iii) tender of the Series A preferred stock is to be made according to the guaranteed delivery procedures described in the Prospectus under the caption "The Exchange Offer-Guaranteed Delivery Procedures." Delivery of documents to DTC in accordance with its procedures DOES NOT constitute delivery to the Exchange Agent. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Series A preferred stock must complete this Letter of Transmittal in its entirety. Holders of Series A preferred stock whose certificates (the "Certificates") for such shares of Series A preferred stock are not immediately available or who cannot deliver their Certificates and all other required documents to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis may effect a tender of such shares of Series A preferred stock according to the guaranteed delivery procedures set forth in "The Exchange Offer -- Procedures for Tendering" in the Prospectus. See Instruction 1. 2 3 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL ALL TENDERING HOLDERS COMPLETE THIS BOX DESCRIPTION OF SERIES A PREFERRED STOCK TENDERED - ---------------------------------------------------------------------------------------------- NAME AND ADDRESS OF AGGREGATE REGISTERED CERTIFICATE LIQUIDATION LIQUIDATION HOLDER NUMBERS OF PREFERENCE PREFERENCE OF (PLEASE FILL IN IF SERIES A OF SERIES A SERIES A BLANK) TENDERED* TENDERED TENDERED** - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- TOTAL: - ---------------------------------------------------------------------------------------------- * Need not be completed by book-entry holders. ** Unless otherwise indicated, the holder will be deemed to have tendered all shares of Series A preferred stock represented by the aggregate liquidation preference of Series A preferred stock represented by the column labeled "Aggregate Liquidation Preference". - ----------------------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SERIES A PREFERRED STOCK IS BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER (SEE INSTRUCTION 1)): Name of Tendering Institution: --------------------------------------------- DTC Account Number: -------------------------------------------------------- Transaction Code Number: --------------------------------------------------- 3 4 [ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED SERIES A PREFERRED STOCK IS BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 5): Name of Registered Holder(s): - ------------------------------------------------------------------------------- Window Ticket Number (if any): - ----------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: - -------------------------------------------------------- Name of Institution which Guaranteed Delivery: - ------------------------------------------------------------- If Guaranteed Delivery is to be made by Book-Entry Transfer: - ---------------------------------------------- Name of Tendering Institution: ----------------------------------------------- DTC Account Number: - -------------------------------------------------------------------------------- Transaction Code Number: - -------------------------------------------------------------------------------- [ ] CHECK HERE IF SERIES A PREFERRED STOCK TENDERED BY BOOK-ENTRY TRANSFER BUT NOT EXCHANGED ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE. [ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE SERIES A PREFERRED STOCK FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ----------------------------------------------------------------------------- Address: ----------------------------------------------------------------------------- Area Code and Telephone Number: -------------------------------------------------------------------------- 4 5 Ladies and Gentlemen: Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to the Company, the above described liquidation preference of Series A preferred stock. Subject to and effective upon the acceptance for exchange of the liquidation preference of Series A preferred stock tendered herewith in accordance with the terms and conditions of this Letter of Transmittal and the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to or, upon the order of the Company, all right, title and interest in and to the Series A preferred stock tendered herewith. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent is also acting as agent of the Company in connection with the Exchange Offer) with respect to the tendered Series A preferred stock, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), subject only to the right of withdrawal described in the Prospectus, to (i) deliver Certificates for Series A preferred stock together with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company, (ii) present Certificates for such Series A preferred stock for transfer, and to transfer the Series A preferred stock on the books of the Company, and (iii) receive for the account of the Company all benefits and otherwise exercise all rights of beneficial ownership of such Series A preferred stock, all in accordance with the terms and conditions of the Exchange Offer. THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE SERIES A PREFERRED STOCK TENDERED HEREBY AND THAT, WHEN THE SAME IS ACCEPTED FOR EXCHANGE, THE COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE SERIES A PREFERRED STOCK TENDERED HEREBY IS NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE SERIES A PREFERRED STOCK TENDERED HEREBY. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER. The name(s) and address(es) of the registered holder(s) of the Series A preferred stock tendered hereby should be printed above, if they are not already set forth above, as they appear on the Certificates representing such Series A preferred stock. The Certificate number(s) and the Series A preferred stock that the undersigned wishes to tender should be indicated in the appropriate boxes above. If any tendered Series A preferred stock is not exchanged pursuant to the Exchange Offer for any reason, or if Certificates are submitted for more shares of Series A preferred stock than are tendered or accepted for exchange, Certificates for such nonexchanged or nontendered Series A preferred stock shares will be returned (or, in the case of Series A preferred stock tendered by book-entry transfer, such Series A preferred stock will be credited to an account maintained at DTC), without expense to the tendering holder, promptly following the expiration or termination of the Exchange Offer. The undersigned understands that no Series B preferred stock will be issued in payment of accrued cumulative dividends on the Series A preferred stock. Holders of Series A preferred stock whose Series A preferred stock is accepted for exchange will not receive accrued cumulative dividends on such Series A preferred stock for any period from and after the exchange of such Series A preferred stock for the Series B preferred stock. Cumulative dividends on the Series B preferred stock will accrue from the date of issuance of the Series B preferred stock. Cumulative dividends on the Series A preferred stock that is tendered in exchange for the Series B preferred stock that have accrued from , the date of issuance of the Series A preferred stock, through the date of issuance of the Series B preferred stock will be payable with respect to the Series B preferred stock. 5 6 The undersigned understands that tender of Series A preferred stock pursuant to any one of the procedures described in the "The Exchange Offer -- Procedures for Tendering" in the Prospectus and in this Letter of Transmittal, and the Company's acceptance for exchange of such tendered Series A preferred stock, will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Series A preferred stock tendered hereby. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, the undersigned hereby directs that the Series B preferred stock be issued in the name(s) of the undersigned or, in the case of book-entry transfer of Series A preferred stock, that such Series B preferred stock be credited to the account indicated above maintained at DTC. If applicable, substitute Certificates representing Series A preferred stock not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Series A preferred stock, will be credited to the account indicated above maintained at DTC. Similarly, unless otherwise indicated under "Special Delivery Instructions," please deliver Series B preferred stock to the undersigned at the address shown below the undersigned's signature. BY TENDERING THE SERIES A PREFERRED STOCK AND EXECUTING THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN "AFFILIATE" OF THE COMPANY, (II) ANY SERIES B PREFERRED STOCK TO BE RECEIVED BY THE UNDERSIGNED IS BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SERIES B PREFERRED STOCK TO BE RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH SERIES B PREFERRED STOCK BY TENDERING SERIES A PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL. A HOLDER OF SERIES A PREFERRED STOCK WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH SERIES A PREFERRED STOCK HELD BY THE BROKER-DEALER IS HELD ONLY AS A NOMINEE OR (B) SUCH SERIES A PREFERRED STOCK WAS ACQUIRED BY SUCH BROKER DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER A PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SERIES B PREFERRED STOCK (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT). THE COMPANY HAS AGREED THAT THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM THE TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF SERIES B PREFERRED STOCK RECEIVED IN EXCHANGE FOR SERIES A PREFERRED STOCK, WHERE SUCH SERIES A PREFERRED STOCK WAS ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SERIES B PREFERRED STOCK HAS BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED SERIES A PREFERRED STOCK FOR ITS 6 7 OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH SERIES A PREFERRED STOCK AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF SERIES B PREFERRED STOCK PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE SERIES B PREFERRED STOCK MAY BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE SERIES B PREFERRED, IT SHALL EXTEND THE 90 DAY PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF SERIES B PREFERRED STOCK BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE SERIES B PREFERRED STOCK OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY GIVES NOTICE THAT THE SALE OF SERIES B PREFERRED STOCK MAY BE RESUMED, AS THE CASE MAY BE. Except as stated in the Prospectus, this tender is irrevocable. 7 8 HOLDER(S) SIGN HERE (SEE INSTRUCTIONS 2, 5 AND 6) (PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 13) (NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2) Must be signed by registered holder(s) exactly as name(s) appear(s) on Certificate(s) for the Series A preferred stock hereby tendered or on a security position listing, or by any person(s) authorized to become the registered holder(s) by endorsements and documents transmitted herewith (including such opinions of counsel, certifications and other information as may be required by the Company for the Series A preferred stock to comply with the restrictions on transfer applicable to the Series A preferred stock). If signature is by an attorney-in-fact, trustee, officer of a corporation or another acting in a fiduciary capacity or representative capacity, please set forth the signer's full title. See Instruction 5. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (SIGNATURE(S) OF HOLDER(S)) Dated - ------------------------------------- , 2000 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- ------------------------------------------------------------------------ ------------------------------------------------------------------------ (INCLUDE ZIP CODE) Area Code and Telephone Number: ----------------------------------------------- Tax Identification or Social Security Number: ----------------------------------------------- GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 2 AND 5) - -------------------------------------------------------------------------------- (AUTHORIZED SIGNATURE) 8 9 - ------------------------------------------------------ SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6) - ------------------------------------------------------ To be completed ONLY if the Series B preferred stock is to be issued in the name of someone other than the registered holder of the Series A preferred stock whose name(s) appear(s) above. Issue [ ] Series B Preferred Stock and/or [ ] Series A Preferred Stock not tendered to: Name(s): ----------------------------------------- Address: ------------------------------------------- ------------------------------------------- ------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: -------------- Tax Identification or Social Security Number(s): --------------------------- - ------------------------------------------------------ - ------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6) - ------------------------------------------------------ To be completed ONLY if Series B preferred stock is to be sent to someone other than the registered holder of the Series A preferred stock whose name(s) appear(s) above, or to such registered holder(s) at an address other than that shown above. Mail [ ] Series B Preferred Stock [ ] Series A Preferred Stock not tendered to: Name(s): ----------------------------------------- Address: ------------------------------------------- ------------------------------------------- ------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: -------------- Tax Identification or Social Security Number(s): --------------------------- - ------------------------------------------------------ 9 10 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES, GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a) Certificates are forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer -- Procedures for Tendering" in the Prospectus. Certificates for Series A preferred stock being tendered, or timely confirmation of a book-entry transfer of such Series A preferred stock into the Exchange Agent's account at DTC, as well as this Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Holders who wish to tender their Series A preferred stock and (i) whose Series A preferred stock is not immediately available or (ii) who cannot deliver their Series A preferred stock, this Letter of Transmittal and all other required documents to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis may tender their Series A preferred stock by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer -- Procedures for Tendering" in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below): (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Company, must be received by the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date; and (iii) the Certificates (or a Book-Entry Confirmation (as defined in the Prospectus)) representing all tendered Series A preferred stock, in proper form for transfer, together with a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange, Inc. trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer -- Procedures for Tendering" in the Prospectus. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile or mail to the Exchange Agent and must include a guarantee by an Eligible Institution in the form set forth in such Notice. As used herein and in the Prospectus, "Eligible Institution" means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution," including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a securities transfer association. THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. The Company will not accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a Letter of Transmittal (or facsimile thereof), waives any right to receive any notice of the acceptance of such tender. 2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required if: (i) this Letter of Transmittal is signed by the registered holder (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the 10 11 owner of the Series A preferred stock) of Series A preferred stock tendered herewith, unless such holder has completed either the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" above, or (ii) such Series A preferred stock are tendered for the account of a firm that is an Eligible Institution. In all other cases, an Eligible Institution must guarantee the signature(s) on this Letter of Transmittal. See Instruction 5. 3. INADEQUATE SPACE. If the space provided in the box captioned "Description of Series A Preferred Stock" is inadequate, the Certificate number(s) and/or the Liquidation Preference of the Series A preferred stock and any other required information should be listed on a separate signed schedule which is attached to this Letter of Transmittal. 4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Series A preferred stock will be accepted only in integral multiples of $1,000 in liquidation preference. If less than the entire liquidation preference of Series A preferred stock is to be tendered, the tendering holder should fill in the column labeled "Liquidation Preference Tendered" of the box entitled "Description of Series A Preferred Stock". If the entire liquidation preference is not tendered, Certificates representing Series A preferred stock for the liquidation preference not tendered and Series B preferred stock for the liquidation preference tendered will be sent to the holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal. The entire liquidation preference of Series A preferred stock represented by Certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. Except as otherwise provided herein, tenders of Series A preferred stock may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. In order for a withdrawal to be effective on or prior to that time, a written, telegraphic, telex or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at one of its addresses set forth above or in the Prospectus prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Series A preferred stock to be withdrawn, the aggregate liquidation preference of Series A preferred stock to be withdrawn, and (if Certificates for Series A preferred stock have been tendered) the name of the registered holder of the Series A preferred stock as set forth on the Certificate for the Series A preferred stock, if different from that of the person who tendered such Series A preferred stock. If Certificates for the Series A preferred stock have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such Certificates for the Series A preferred stock the tendering holder must submit the serial numbers shown on the particular Certificates for the Series A preferred stock to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of the Series A preferred stock tendered for the account of an Eligible Institution. If the Series A preferred stock has been tendered pursuant to the procedures for book-entry transfer set forth in "The Exchange Offer -- Procedures for Tendering," the notice of withdrawal must specify the name and number of the account of DTC to be credited with the withdrawal of the Series A preferred stock, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of Series A preferred stock may not be rescinded. Series A preferred stock properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time prior to 5:00 p.m., New York City time, on the Expiration Date by following any of the procedures described in the Prospectus under "the Exchange Offer-Procedures for Tendering." All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Company, in its sole discretion, whose determination shall be final and binding on all parties. The Company, any affiliates or assigns of the Company, the Exchange Agent or any other person shall not be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Series A preferred stock which has been tendered but 11 12 which is withdrawn will be returned to the holder thereof without cost to such holder promptly after withdrawal. 5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Series A preferred stock tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Series A preferred stock tendered hereby is owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Series A preferred stock is held in different name(s) on several Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are names in which tendered Series A preferred stock is held. If this Letter of Transmittal or any Certificates or stock powers are signed by trustees, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing and must submit proper evidence satisfactory to the Company, in its sole discretion, of such persons' authority to so act. When this Letter of Transmittal is signed by the registered owner(s) of the Series A preferred stock listed and transmitted hereby, no endorsement(s) of Certificate(s) or separate stock power(s) is/are required unless Series B preferred stock is to be issued in the name of a person other than the registered holder(s). Signature(s) on such Certificate(s) or stock power(s) must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Series A preferred stock listed, the Certificates must be endorsed or accompanied by appropriate stock powers, signed exactly as the name or names of the registered owner(s) appear(s) on the Certificates, and also must be accompanied by such opinions of counsel, certifications and other information as the Company or the Trustee for the Series A preferred stock may require in accordance with the restrictions on transfer applicable to the Series A preferred stock. Signatures on such Certificates or stock powers must be guaranteed by an Eligible Institution. 6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Series B preferred stock is to be issued in the name of a person other than the signer of this Letter of Transmittal, or if Series B preferred stock is to be sent to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Certificates for Series A preferred stock not exchanged will be returned by mail or, if tendered by book-entry transfer, by crediting the account indicated above maintained at DTC. See Instruction 4. 7. IRREGULARITIES. The Company will determine, in its sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Series A preferred stock, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for, may, in the view of counsel to the Company, be unlawful. The Company also reserves the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer set forth in the Prospectus under "The Exchange Offer -- Conditions to the Exchange Offer" or any conditions or irregularities in any tender of Series A preferred stock of any particular holder whether or not similar conditions or irregularities are waived in the case of other holders. The Company's interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding. No tender of Series A preferred stock will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Neither the Company, any affiliate or assign of the Company or the Exchange Agent nor any person shall be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification. 8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth 12 13 on the front of this Letter of Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained from the Exchange Agent or from your broker, dealer, commercial bank, trust company or other nominee. 9. 31% BACKUP WITHHOLDING, SUBSTITUTE FORM W-9. Under the U.S. Federal income tax law, a Holder whose tendered Series A preferred stock is accepted for exchange and who receives dividends on Series B preferred stock is required to provide the payer of dividends with such Holder's correct taxpayer identification number ("TIN") on the Substitute Form W-9 below. If the payer is not provided with the correct TIN, the Internal Revenue Service (the "IRS") may subject the Holder or the payee to a $50 penalty. In addition, dividend payments to such Holders or other payees with respect to Series B preferred stock exchanged pursuant to the Exchange Offer may be subject to 31% backup withholding. The box in Part 3 of Substitute Form W-9 may be checked if the tendering Holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in part 3 is checked, the Holder or other payee must also complete the certifications in Part 2 and the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the payer will withhold 31% of all reportable payments made to the payee seven days following receipt by the payer of the Certificate of Awaiting Taxpayer Identification Number and prior to the time a properly certified TIN is provided to the payer. The Holder is required to give the payer the TIN (e.g., social security number or employer identification number) of the person or entity that will be the registered owner of the Series B preferred stock. If the Series B preferred stock is registered in more than one name or not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. Certain Holders (including, among others, corporations, financial institutions and certain foreign persons) may not be subject to these backup withholding and reporting requirements. Such Holders should nevertheless complete the Substitute Form W-9 below, and write "exempt" on the face thereof, to avoid possible erroneous backup withholding. A foreign person may qualify as an exempt recipient by submitting a properly completed IRS Form W-8, signed under penalties of perjury, attesting to that Holder's exempt status. Please consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which Holders are exempt from backup withholding. Backup withholding is not an additional U.S. Federal income tax. Rather, the U.S. Federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be applied for. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s) representing Series A preferred stock has been lost, destroyed or stolen, the holder should promptly notify the Exchange Agent. The holder will then be instructed as to the steps that must be taken in order to replace the Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Certificate(s) have been followed. 11. SECURITY TRANSFER TAXES. Holders who tender their Series A preferred stock for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, Series B preferred stock is to be delivered to, or is to be issued in the name of, any person other than the registered holder of the Series A preferred stock tendered, or if a transfer tax is imposed for any reason other than the exchange of Series A preferred stock in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. 13 14 PAYER'S NAME: BANK OF NEW YORK - --------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT Social Security OR FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW Employer Identification Number ------------------------ ---------------------------------------------------------------------------------------- Department of the Treasury PART 2 -- Certification -- Under penalties of perjury, I certify that: Internal Revenue Service (1) The number shown on this form is my correct Taxpayer Identification Number (or PAYER'S REQUEST FOR I am waiting for a number to be issued to me) and TAXPAYER IDENTIFICATION (2) I am not subject to backup withholding because: (a) I am exempt from backup NUMBER (TIN) withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. ---------------------------------------------------------------------------------------- Certification Instructions -- You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withholding, you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR PART 3 --AWAITING TIN [ CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE ] CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING. SIGNATURE ---------------------------- DATE ----------------- NAME (please print) -------------------------------------------------- ADDRESS (please print) ----------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY DIVIDENDS OR OTHER REPORTABLE PAYMENTS MADE TO YOU WITH RESPECT TO SERIES B PREFERRED STOCK EXCHANGED PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. - -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within 60 days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. Moreover, I understand that during this 60-day period, 31% of all reportable payments made to me will be withheld commencing seven business days after the payer receives this Certificate of Awaiting Taxpayer Identification number and terminating on the date I provide a certified TIN to the payer. Signature Date ------------------------ - ------------------------------------------------------------ Name (please print) - ------------------------------------------------------------------------------------------- Address (please print) - -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 14 15 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. Social Security numbers have nine digits separated by two hyphens (i.e. 000-00-0000). Employer identification numbers have nine digits separated by only one hyphen (i.e. 00-0000000). The table below will help determine the number to give the payer. - ------------------------------------------------------------ GIVE THE NAME AND FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF-- - ------------------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of account) the account or, if combined funds, any one of the individuals(1) 3. Husband and wife (joint account) The actual owner of the account or, if joint funds, either person(1) 4. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the minor(1) 6. Account in the name of guardian or The ward, minor or committee for a designated ward, incompetent minor or incompetent person person(3) 7. a. The usual revocable savings The grantor- trust (grantor is also trustee) trustee(1) b. So-called trust account that is The actual owner(1) not a legal or valid trust under State law 8. Sole proprietorship account The Owner(4) - ------------------------------------------------------------ - ------------------------------------------------------------ GIVE THE NAME AND FOR THIS TYPE OF ACCOUNT: EMPLOYER IDENTIFICATION NUMBER OF-- - ------------------------------------------------------------ 9. A valid trust, estate, or pension The legal entity(5) trust (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account The partnership 13. Association, club or other tax- The organization exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district or prison) that receives agricultural program payments - ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 15 16 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL interest and dividend payments include the following: - A corporation. - A financial institution. - An organization exempt from tax under Section 501(a) of the Internal Revenue Code or an individual retirement plan. - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government or any agency or instrumentality thereof. - An international organization or any agency or instrumentality thereof. - A dealer in securities or commodities required to register in the United States or a possession of the United States. - A real estate investment trust. - A common trust fund operated by a bank under Section 584(a) of the Internal Revenue Code. - An exempt charitable remainder trust or a non-exempt trust described in Section 4947(a)(1) of the Internal Revenue Code. - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under Section 852 of the Internal Revenue Code). - Payments described in Section 6049(b)(5) of the Internal Revenue Code to non-resident aliens. - Payments on tax-free covenant bonds under Section 1451 of the Internal Revenue Code. - Payments made by certain foreign organizations. DIVIDENDS AND PATRONAGE DIVIDENDS that generally are exempt from backup withholding include: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner. - Payments of patronage dividends not paid in money. - Payments made by certain foreign organizations. - Section 404(k) distributions by an ESOP. Exempt payees described above must still complete the Substitute Form W-9 enclosed herewith to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments, other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N of the Internal Revenue Code. PRIVACY ACT NOTICE. -- Section 6109 of the Internal Revenue Code requires most recipients of dividends, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to the Internal Revenue Service. The Internal Revenue Service uses the numbers for identification purposes and to help verify the accuracy of the recipient's tax return. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of the gross amount of interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. 16 17 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES A (LIQUIDATION PREFERENCE $1,000 PER SHARE) OF EOG RESOURCES, INC. This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used for a holder of the Issuer's (as defined below) Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A (the "Series A") to accept the Exchange Offer (as defined below) if (i) certificates for such holder's Series A preferred stock are not immediately available, (ii) such holder cannot deliver its certificates for the Series A preferred stock, the Letter of Transmittal and all other required documents to Bank of New York (the "Exchange Agent") prior to 5:00 p.m., New York City time, on the Expiration Date (as defined in the Prospectus referred to below) or (iii) the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight courier or mail, or transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange Offer -- Procedures for Tendering" in the Prospectus. The Exchange Agent for the Exchange Offer is: BANK OF NEW YORK By mail: By hand: By overnight mail: For information call: Confirm: Facsimile: DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. 17 18 Ladies and Gentlemen: The undersigned hereby tenders to EOG Resources, Inc., a Delaware corporation (the "Issuer"), upon the terms and subject to the conditions set forth in the Prospectus dated , 2000 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate liquidation preference of Series A preferred stock set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer -- Procedures for Tendering." All capitalized terms used herein but not defined shall have the meanings ascribed to them in the Prospectus. The undersigned understands and acknowledges that the Exchange Offer will expire at 5:00 p.m., New York City time, on , 2000, unless extended by the Issuer. The term "Expiration Date" shall mean 5:00 p.m., New York City time, on , 2000, unless the Exchange Offer is extended as provided in the Prospectus, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. SIGNATURE Date: ------------------------ - ------------------------------------------------------------ Date: ------------------------ - ------------------------------------------------------------ SIGNATURE(S) OF HOLDER(S) OR AUTHORIZED SIGNATORY
Area Code and Telephone Number: ----------------------------------------------- Name(s): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title, if signing in a fiduciary or representative capacity): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- Taxpayer Identification Number of Social Security No.: - -------------------------------------------------------------------------------- Aggregate Liquidation Preference of Series A Preferred Stock Tendered [(must be integral multiples of $1,000)]: - -------------------------------------------------------------------------------- Certificate Number(s) of Series A Preferred Stock (if available): - -------------------------------------------------------------------------------- Aggregate Liquidation Preference Represented by Certificate(s): $ - -------------------------------------------------------------------------------- IF TENDERED SERIES A PREFERRED STOCK WILL BE DELIVERED BY BOOK-ENTRY TRANSFER, PROVIDE THE DEPOSITORY TRUST COMPANY ("DTC") ACCOUNT NO. AND TRANSACTION CODE (if available): Account No. - -------------------------------------------------------------------------------- Transaction No. - ----------------------------------------------------------------------------- 18 19 GUARANTEE OF DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm or other entity identified as an "eligible guarantor institution" within the meaning of Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended, guarantees deposit with the Exchange Agent of a properly completed and executed Letter of Transmittal (or facsimile thereof), or an Agent's Message, as well as the certificate(s) representing all tendered Series A preferred stock in proper form for transfer, or confirmation of the book-entry transfer of such Series A preferred stock into the Exchange Agent's account at DTC as described in the Prospectus under the caption "The Exchange Offer -- Procedures for Tendering -- Book-Entry Transfer" and other documents required by the Letter of Transmittal, all by 5:00 p.m., New York City time, on the third New York Stock Exchange trading day following the Expiration Date. Name of Eligible Institution: - -------------------------------------------------------------------------------- AUTHORIZED SIGNATURE Address: Name: ----------------------------------------------- --------------------------------------------- Title: - ----------------------------------------------------- -------------------------------------------------
Area Code and Telephone No.: Date: ------------------------------- ----------------------------------------
NOTE: DO NOT SEND SERIES A PREFERRED STOCK WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF SERIES A PREFERRED STOCK MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS. 19 20 EOG RESOURCES, INC. OFFERS TO EXCHANGE ITS FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES B WHICH HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES A PURSUANT TO THE PROSPECTUS DATED , 2000. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000 UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: EOG Resources, Inc., a Delaware corporation (the "Issuer"), is offering, upon the terms and subject to the conditions set forth in the Prospectus dated , 2000 (the "Prospectus") and the accompanying Letter of Transmittal enclosed herewith (which together constitute the "Exchange Offer"), to exchange its Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B (the "Series B") for shares of its outstanding Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A (the "Series A"). As set forth in the Prospectus, the terms of the Series B are identical in all material respects to the Series A, except that the Series B has been registered under the Securities Act of 1933, as amended, and therefore will not be subject to certain restrictions on their transfer. Series A preferred stock may be tendered in whole or in part in integral multiples of $1,000 in excess thereof. THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE "THE EXCHANGE OFFER -- CONDITIONS TO THE EXCHANGE OFFER" IN THE PROSPECTUS. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. the Prospectus, dated , 2000; 2. the Letter of Transmittal for your use and for the information of your clients (facsimile copies of the Letter of Transmittal may be used to tender Series A preferred stock); 3. a form of letter which may be sent to your clients for whose accounts you hold Series A preferred stock registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer; and 4. a Notice of Guaranteed Delivery. YOUR PROMPT ACTION IS REQUESTED. PLEASE NOTE THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000, UNLESS EXTENDED. PLEASE FURNISH COPIES OF THE ENCLOSED MATERIALS TO THOSE OF YOUR CLIENTS FOR WHOM YOU HOLD SERIES A PREFERRED STOCK REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE AS QUICKLY AS POSSIBLE. In all cases, exchanges of Series A preferred stock accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of (a) certificates representing such Series A preferred stock, or a book-entry confirmation (as defined in the Prospectus), as the case may be, (b) the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, or an Agent's Message (as defined in the Prospectus) and (c) any other required documents. 20 21 Holders who wish to tender their Series A preferred stock and (i) whose Series A preferred stock is not immediately available or (ii) who cannot deliver their Series A preferred stock, the Letter of Transmittal or an Agent's Message and any other documents required by the Letter of Transmittal to the Exchange Agent prior to the Expiration Date must tender their Series A preferred stock according to the guaranteed delivery procedures set forth under the caption "The Exchange Offer -- Procedures for Tendering -- Guaranteed Delivery" in the Prospectus. The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Series A preferred stock residing in any jurisdiction in which the making of the Exchange Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction. The Issuer will not make any payments to brokers, dealers or other persons for soliciting acceptances of the Exchange Offer. The Issuer will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. The Issuer will pay or cause to be paid any transfer taxes payable on the transfer of Series A preferred stock to it, except as otherwise provided in the Letter of Transmittal. Questions and requests for assistance with respect to the Exchange Offer or for copies of the Prospectus and Letter of Transmittal may be directed to the Exchange Agent at its address set forth in the Prospectus or at . Very truly yours, EOG RESOURCES, INC. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE ISSUER OR ANY AFFILIATE THEREOF, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 21 22 EOG RESOURCES, INC. OFFERS TO EXCHANGE ITS FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES B WHICH HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING FIXED RATE CUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES A PURSUANT TO THE PROSPECTUS DATED , 2000. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000, UNLESS THE OFFER IS EXTENDED - -------------------------------------------------------------------------------- To Our Clients: Enclosed for your consideration is a Prospectus dated , 2000 (the "Prospectus") and a Letter of Transmittal (which together constitute the "Exchange Offer") relating to the offer by EOG Resources, Inc. (the "Issuer") to exchange its Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B (the "Series B") for shares of its outstanding Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series A (the "Series A"). As set forth in the Prospectus, the terms of the Series B are identical in all material respects to the Series A, except that the Series B has been registered under the Securities Act of 1933, as amended, and therefore will not be subject to certain restrictions on their transfer. Series A preferred stock may be tendered in whole or in part in integral multiples of $1,000 in excess thereof. The enclosed material is being forwarded to you as the beneficial owner of Series A preferred stock held by us for your account or benefit but not registered in your name. An exchange of any Series A preferred stock may only be made by us as the registered Holder pursuant to your instructions. Therefore, the Issuer urges beneficial owners of Series A preferred stock registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such Holder promptly if they wish to exchange Series A preferred stock in the Exchange Offer. Accordingly, we request instructions as to whether you wish us to exchange any or all such Series A preferred stock held by us for your account or benefit, pursuant to the terms and conditions set forth in the Prospectus and Letter of Transmittal. We urge you to read carefully the Prospectus and Letter of Transmittal before instructing us to exchange your Series A preferred stock. Your instructions to us should be forwarded as promptly as possible in order to permit us to exchange Series A preferred stock on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer expires at 5:00 p.m., New York City time, on , 2000, unless extended. The term "Expiration Date" shall mean 5:00 p.m., New York City time, on , 2000, unless the Exchange Offer is extended as provided in the Prospectus, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. A tender of Series A preferred stock may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. Your attention is directed to the following: 1. The Exchange Offer is for the exchange of one share of Series B preferred stock for one share of Series A preferred stock. 100,000 shares of Series A preferred stock were outstanding as of , 2000. 2. THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE "THE EXCHANGE OFFER -- CONDITIONS TO THE EXCHANGE OFFER" IN THE PROSPECTUS. 22 23 3. The Exchange Offer and withdrawal rights will expire at 5:00 p.m., New York City time, on , 2000, unless extended. 4. The Issuer has agreed to pay certain expenses of the Exchange Offer. Any transfer taxes incident to the transfer of Series A preferred stock from the tendering Holder to the Issuer will be paid by the Issuer, except as provided in the Prospectus and the Letter of Transmittal. See "The Exchange Offer -- Fees and Expenses" in the Prospectus. The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of Holders of Series A preferred stock residing in any jurisdiction in which the making of the Exchange Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction. If you wish us to tender any or all of your Series A preferred stock held by us for your account or benefit, please do instruct us by completing, execution and returning to us the attached instruction form. THE ACCOMPANYING LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATIONAL PURPOSES ONLY AND MAY NOT BE USED BY YOU TO EXCHANGE SERIES A PREFERRED STOCK HELD BY US AND REGISTERED IN OUR NAME FOR YOUR ACCOUNT OR BENEFIT. 23 24 INSTRUCTIONS The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer of EOG Resources, Inc. This will instruct you to tender for exchange the aggregate liquidation value of Series A preferred stock indicated below (or, if no aggregate liquidation preference is indicated below, all Series A preferred stock) held by you for the account or benefit of the undersigned, pursuant to the terms of and conditions set forth in the Prospectus and the Letter of Transmittal. Aggregate Liquidation Preference of Series A preferred stock to be tendered for exchange: $ ------------ *I (we) understand that if I (we) sign this instruction form without indicating an aggregate liquidation preference of Series A preferred stock in the space above, all Series A preferred stock held by you for my (our) account will be tendered for exchange. ------------------------------------ ------------------------------------ SIGNATURE(S) ------------------------------------ CAPACITY (FULL TITLE) IF SIGNING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ NAME(S) AND ADDRESS, INCLUDING ZIP CODE Date: ------------------------------------ ------------------------------------ AREA CODE AND TELEPHONE NUMBER ------------------------------------ TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO. 24 -----END PRIVACY-ENHANCED MESSAGE-----