PROSPECTUS
SUPERIOR ENERGY SERVICES, INC.
$300,000,000
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
GUARANTEES OF DEBT SECURITIES
We may offer and sell from time to time:
* common stock;
* preferred stock;
* depositary shares representing preferred stock;
* debt securities; and
* guarantees by one or more of our subsidiaries of the payment of
debt securities we issue.
We will provide the specific terms and initial public offering prices of
these securities in supplements to this prospectus. You should read this
prospectus and any supplement carefully before you invest.
We will not use this prospectus to confirm sales of any securities
unless it is attached to a prospectus supplement.
We may sell these securities to or through underwriters and also to
other purchasers or through agents. The names of any underwriters or
agents will be stated in an accompanying prospectus supplement.
Our common stock is listed on the Nasdaq National Market under the
symbol "SESI." Unless we state otherwise in a prospectus supplement, we
will not list any of the securities on any other securities exchange.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR INFORMATION THAT YOU SHOULD
CONSIDER BEFORE INVESTING IN THE SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
PASSED ON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS APRIL 28, 2000.
TABLE OF CONTENTS
PAGE
WHERE YOU CAN FIND MORE INFORMATION.....................................3
NOTICE REGARDING FORWARD-LOOKING STATEMENTS.............................3
THE COMPANY.............................................................4
RATIO OF EARNINGS TO FIXED CHARGES......................................4
RISK FACTORS............................................................6
USE OF PROCEEDS.........................................................6
DESCRIPTION OF COMMON STOCK.............................................8
DESCRIPTION OF PREFERRED STOCK..........................................9
DESCRIPTION OF DEPOSITARY SHARES........................................12
DIVIDENDS AND OTHER DISTRIBUTIONS.......................................13
REDEMPTION OF DEPOSITARY SHARES.........................................14
VOTING THE PREFERRED STOCK..............................................14
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT...................14
CHARGES OF DEPOSITARY...................................................14
MISCELLANEOUS...........................................................14
RESIGNATION AND REMOVAL OF DEPOSITARY...................................15
DESCRIPTION OF DEBT SECURITIES..........................................15
SPECIFIC TERMS OF EACH SERIES OF DEBT SECURITIES IN THE PROSPECTUS
SUPPLEMENT..............................................................15
PLAN OF DISTRIBUTION....................................................23
LEGAL MATTERS...........................................................24
EXPERTS.................................................................24
________________
YOU SHOULD RELY ONLY ON INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT
AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE
NOT MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS
OR ANY PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE
ON THE FRONT COVER OF THOSE DOCUMENTS.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the U.S. Securities and Exchange Commission using a "shelf" registration
process. This means:
* we may issue any combination of securities covered by this
prospectus from time to time;
* we will provide a prospectus supplement each time we issue the
securities; and
* the prospectus supplement will provide specific information about
the terms of that offering and also may add, update or change
information contained in this prospectus.
You should read both this prospectus and the accompanying prospectus
supplement together with additional information described below under the
heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You can inspect and copy that information
at the public reference rooms of the SEC at its offices located at 450
Fifth Street, NW, Washington, D.C. 20549, and at its regional offices
located at 7 World Trade Center, Suite 1300, New York, New York 10048 and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You can call
the SEC at 1-800-SEC-0330 for more information about the public reference
rooms. The SEC also maintains an Internet site that contains reports,
proxy and information statements and other information regarding
registrants, like us, that file reports with the SEC electronically. The
SEC's Internet address is http://www.sec.gov.
We maintain an Internet site at http://www.superiorenergy.com that
contains information about our business. The information contained at our
Internet site is not part of this prospectus.
We have filed a registration statement and related exhibits with the
SEC to register the securities offered by this prospectus. The
registration statement contains additional information about us and our
securities. You may inspect the registration statement and exhibits
without charge at the SEC's public reference rooms, and you may obtain
copies from the SEC at prescribed rates.
The SEC allows us to "incorporate by reference" the information we
file with it, which means:
* incorporated documents are considered part of the prospectus;
* we can disclose important information to you by referring you to
those documents; and
* information that we file with the SEC will automatically update
and supersede this incorporated information.
We incorporate by reference the following documents that we have filed
with the SEC pursuant to the Securities Exchange Act of 1934:
* Our annual report on Form 10-K for the fiscal year ended December
31, 1999 (filed March 30, 2000);
* Our quarterly report on Form 10-Q for the fiscal quarter ended
June 30, 1999 (filed August 16, 1999);
* Our current reports on Form 8-K filed March 22, 2000, April 4,
2000 and April 20, 2000;
* Our definitive proxy statement dated June 18, 1999;
* The description of our common stock set forth in our registration
statement on Form 8-A/A filed October 29, 1997; and
* All documents filed by us with the SEC pursuant to Sections
13(a), 14 or 15(d) of the Securities Exchange Act after the date
of this prospectus and prior to the termination of this offering.
At your request, we will provide you with a free copy of any of these
filings (except for exhibits, unless the exhibits are specifically
incorporated by reference into the filing). You may request copies by
writing or telephoning us at:
Superior Energy Services, Inc.
1105 Peters Road
Harvey, Louisiana 70058
Attn: Investor Relations
(504) 362-4321
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and in some of the documents
that we incorporate by reference in this prospectus are forward-looking
statements about our expectations of what may happen in the future.
Statements that are not historical facts are forward-looking statements.
These statements are based on the beliefs and assumptions of our management
and on information currently available to us. Forward-looking statements
can sometimes be identified by our use of forward-looking words like
"anticipate," "believe," "estimate," "expect," "intend," "may," "plan" and
similar expressions.
Forward-looking statements are not guarantees of future performance.
They involve risks, uncertainties and assumptions. Our future results and
stockholder value may differ significantly from those expressed in or
implied by the forward-looking statements contained in this prospectus and
in the information incorporated in this prospectus. Many of the factors
that will determine these results and values are beyond our ability to
control or predict. We caution you that a number of important factors
could cause actual results to be very different from and worse than our
expectations expressed in or implied by any forward-looking statement.
These factors include, but are not limited to, those discussed in "Risk
Factors" beginning on page 6.
Our management believes these forward-looking statements are
reasonable. However, you should not place undue reliance on these forward-
looking statements, which are based only on our current expectations.
Forward-looking statements speak only as of the date they are made, and we
undertake no obligation to publicly update any of them in light of new
information or future events.
OUR COMPANY
We provide a broad range of specialized oilfield services and
equipment to oil and gas companies in the Gulf of Mexico and throughout the
Gulf Coast region. These services and equipment include:
* well services, including plug and abandonment ("P&A") services, coiled
tubing services, well pumping and stimulation services, data acquisition
services, gas lift services and electric wireline services,
* mechanical wireline services,
* the rental of liftboats,
* the rental of specialized oilfield equipment,
* environmental cleaning services,
* field management services, and
* the manufacture and sale of drilling instrumentation and oil spill
containment equipment.
Over the past few years, we have significantly expanded our geographic
scope of operations and the range of production related services we provide
through both internal growth and strategic acquisitions. In July 1999, we
completed the acquisition by merger of Cardinal Holding Corp., and in
November 1999, we completed the acquisition of Production Management
Companies, Inc., thereby making these companies two of our wholly-owned
subsidiaries. These acquisitions firmly established us as a market leader
in providing most offshore production related services using liftboats as
work platforms and allowed us to expand our scope of operations to include
offshore platform and property management services.
The decline in drilling and workover activity in the Gulf of
Mexico triggered by low oil prices that began in 1998 adversely affected
our results of operations for the fiscal year ended December 31, 1999. Our
operating results are directly tied to industry demand for our services,
most of which are performed in the Gulf of Mexico. While we have focused
on providing production related services where, historically, demand has
not been as volatile as for exploration related services, we expect our
operating results to be highly leveraged to industry activity levels in the
Gulf of Mexico.
Superior is a Delaware corporation, and the mailing address of our
executive offices is 1105 Peters Road, Harvey, Louisiana 70058. Our
telephone number is (504) 362-4321.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges:
YEARS ENDED DECEMBER 31,
------------------------
1995 1996 1997 1998 1999
------ ------ ------ ------ ------
Ratio of earnings to fixed charges 1.23 2.33 2.49 1.18 0.80(1)
-----------------
(1) Earnings were insufficient to cover fixed charges, and fixed charges
exceeded earnings by approximately $2.645 million.
For the purpose of computing the ratio of earnings to fixed charges,
earnings are defined as:
* income from continuing operations before income taxes;
* plus fixed charges; and
* less capitalized interest.
Fixed charges are defined as the sum of the following:
* interest, including capitalized interest, on all indebtedness;
* amortization of debt issuance cost; and
* that portion of rental expense which we believe to be
representative of an interest factor.
On July 15, 1999, we acquired Cardinal Holding Corp. through a merger
that resulted in Cardinal becoming one of our wholly owned subsidiaries.
However, the merger was treated for accounting purposes as an acquisition
of us by Cardinal. Because we were the company being "acquired" for
accounting purposes, our financial information for periods prior to the
merger represents the results of Cardinal's operations, and our financial
information for periods following the merger represents the results of the
operations of the combined companies. Financial information from prior
periods is therefore not expected to be indicative of the future results of
the combined operations of the companies.
RISK FACTORS
An investment in our securities involves significant risks. You
should carefully consider the following risk factors before you decide to
buy any of our securities. You should also carefully read and consider all
of the information we have included, or incorporated by reference, in this
prospectus before you decide to buy any of our securities.
WE ARE IN A CYCLICAL INDUSTRY.
Our business depends in large part on the level of oilfield
activity in the Gulf of Mexico and along the Gulf Coast. The level of oil
field activity is affected in turn by the willingness of oil and gas
companies to make expenditures for the exploration, production and
development of oil and natural gas. The purchases of the products and
services we provide are, to a substantial extent, deferrable in the event
oil and gas companies reduce capital expenditures. Therefore, the
willingness of our customers to make expenditures is critical to our
operations. The levels of such capital expenditures are influenced by:
* oil and gas prices and industry perceptions of future prices,
* the cost of exploring for, producing and delivering oil and gas,
* the ability of oil and gas companies to generate capital,
* the sale and expiration dates of leases in the United States,
* the discovery rate of new oil and gas reserves, and
* local and international political and economic conditions.
Although the production and development sectors of the oil and
gas industry are less immediately affected by changing prices, and, as a
result, less volatile than the exploration sector, producers generally
react to declining oil and gas prices by reducing expenditures. This has,
in the past, and may, in the future, adversely affect our business. We are
unable to predict future oil and gas prices or the level of oil and gas
industry activity. A prolonged low level of activity in the oil and gas
industry will adversely affect the demand for our products and services and
our financial condition and results of operations.
WE ARE VULNERABLE TO THE POTENTIAL DIFFICULTIES ASSOCIATED WITH RAPID
EXPANSION.
We have grown rapidly over the last several years through
internal growth and acquisitions of other companies. Our future success
depends on our ability to manage the rapid growth that we have experienced,
and this will demand increased responsibility from our management
personnel. The following factors could present difficulties to us:
* the lack of sufficient executive-level personnel;
* the increased administrative burdens; and
* the increased logistical problems common with large, expansive
operations.
If we do not manage these potential difficulties successfully, our
operating results could be adversely affected. The historical financial
information herein is not necessarily indicative of the results that would
have been achieved had we been operated on a fully integrated basis or the
results that may be realized in the future.
OUR INABILITY TO CONTROL THE INHERENT RISKS OF ACQUIRING BUSINESSES COULD
ADVERSELY AFFECT OUR OPERATIONS.
Acquisitions have been and may continue to be a key element of
our business strategy. We cannot assure you that we will be able to
identify and acquire acceptable acquisition candidates on terms favorable
to us in the future. We may be required to incur substantial indebtedness
to finance future acquisitions and also may issue equity securities in
connection with such acquisitions. Such additional debt service
requirements may impose a significant burden on our results of operations
and financial condition. The issuance of additional equity securities
could result in significant dilution to our stockholders. We cannot assure
you that we will be able to successfully consolidate the operations and
assets of any acquired business with our own business. Acquisitions may
not perform as expected when the acquisition was made and may be dilutive
to our overall operating results. In addition, our management may not be
able to effectively manage our increased size or operate a new line of
business.
WE ARE SUSCEPTIBLE TO ADVERSE WEATHER CONDITIONS IN THE GULF OF MEXICO.
Our operations are directly affected by the seasonal differences in
weather patterns in the Gulf of Mexico. These differences may result in
increased operations in the spring, summer and fall periods and a decrease
in the winter months. The seasonality of oil and gas industry activity as
a whole in the Gulf Coast region also affects our operations and sales of
equipment. Weather conditions generally result in higher drilling activity
in the spring, summer and fall months with the lowest activity in winter
months. The rainy weather, hurricanes and other storms prevalent in the
Gulf of Mexico and along the Gulf Coast throughout the year may also affect
our operations. Accordingly, our operating results may vary from quarter
to quarter, depending on factors outside of our control. As a result, full
year results are not likely to be a direct multiple of any particular
quarter or combination of quarters.
WE DEPEND ON SIGNIFICANT CUSTOMERS.
We derive a significant amount of our revenue from a small number of
major and independent oil and gas companies. Our inability to continue to
perform services for a number of our large existing customers, if not
offset by sales to new or other existing customers, could have a material
adverse effect on our business and operations.
OUR INDUSTRY IS HIGHLY COMPETITIVE.
We compete in highly competitive areas of the oil field services
industry. The products and services of each of our principal industry
segments are sold in highly competitive markets, and our revenues and
earnings may be affected by the following factors:
* changes in competitive prices;
* fluctuations in the level of activity and major markets;
* an increased number of liftboats in the Gulf of Mexico;
* general economic conditions; and
* governmental regulation.
We compete with the oil and gas industry's largest integrated oil
field services providers. We believe that the principal competitive
factors in the market areas that we serve are price, product and service
quality, availability and technical proficiency.
Our operations may be adversely affected if our current
competitors or new market entrants introduce new products or services with
better features, performance, prices or other characteristics than our
products and services. Further, additional liftboat capacity in the Gulf
of Mexico would increase competition for that service. Competitive
pressures or other factors also may result in significant price competition
that could have a material adverse effect on our results of operations and
financial condition. Finally, competition among oil field service and
equipment providers is also affected by each provider's reputation for
safety and quality. Although we believe that our reputation for safety and
quality service is good, you cannot be sure that we will be able to
maintain our competitive position.
THE DANGERS INHERENT IN OUR OPERATIONS AND THE POTENTIAL LIMITS ON
INSURANCE COVERAGE COULD EXPOSE US TO POTENTIALLY SIGNIFICANT LIABILITY
COSTS.
Our operations involve the use of liftboats, heavy equipment and
exposure to inherent risks, including equipment failure, blowouts,
explosions and fire. In addition, our liftboats are subject to operating
risks such as catastrophic marine disaster, adverse weather conditions,
mechanical failure, collisions, oil and hazardous substance spills and
navigation errors. The occurrence of any of these events could result in
our liability for personal injury and property damage, pollution or other
environmental hazards, loss of production or loss of equipment. In
addition, certain of our employees who perform services on offshore
platforms and vessels are covered by provisions of the Jones Act, the Death
on the High Seas Act and general maritime law. These laws make the
liability limits established by state workers' compensation laws
inapplicable to these employees and instead permit them or their
representatives to pursue actions against us for damages for job-related
injuries. In such actions, there is generally no limitation on our
potential liability.
Any litigation arising from a catastrophic occurrence involving
our services or equipment could result in large claims for damages. The
frequency and severity of such incidents affect our operating costs,
insurability and relationships with customers, employees and regulators.
Any increase in the frequency or severity of such incidents, or the general
level of compensation awards with respect to such incidents, could affect
our ability to obtain projects from oil and gas companies or insurance.
This could have a material adverse effect on us. We maintain what we
believe is prudent insurance protection. You cannot be sure that we will be
able to maintain adequate insurance in the future at rates we consider
reasonable or that our insurance coverage will be adequate to cover future
claims that may arise.
THE NATURE OF OUR INDUSTRY SUBJECTS US TO COMPLIANCE WITH REGULATORY AND
ENVIRONMENTAL LAWS.
Our business is significantly affected by state and federal laws
and other regulations relating to the oil and gas industry and by changes
in such laws and the level of enforcement of such laws. We are unable to
predict the level of enforcement of existing laws and regulations, how such
laws and regulations may be interpreted by enforcement agencies or court
rulings, or whether additional laws and regulations will be adopted. We
are also unable to predict the effect that any such events may have on us,
our business, or our financial condition.
Federal and state laws that require owners of non-producing wells
to plug the well and remove all exposed piping and rigging before the well
is permanently abandoned significantly affect the demand for our plug and
abandonment services. A decrease in the level of enforcement of such laws
and regulations in the future would adversely affect the demand for our
services and products. In addition, demand for our services is affected by
changing taxes, price controls and other laws and regulations relating to
the oil and gas industry generally. The adoption of laws and regulations
curtailing exploration and development drilling for oil and gas in our
areas of operations for economic, environmental or other policy reasons
could also adversely affect our operations by limiting demand for our
services.
We also have potential environmental liabilities with respect to
our offshore and onshore operations, including our environmental cleaning
services. Certain environmental laws provide for joint and several
liabilities for remediation of spills and releases of hazardous substances.
These environmental statutes may impose liability without regard to
negligence or fault. In addition, we may be subject to claims alleging
personal injury or property damage as a result of alleged exposure to
hazardous substances. We believe that our present operations substantially
comply with applicable federal and state pollution control and
environmental protection laws and regulations. We also believe that
compliance with such laws has had no material adverse effect on our
operations to date. However, such environmental laws are changed
frequently. Sanctions for noncompliance may include revocation of permits,
corrective action orders, administrative or civil penalties and criminal
prosecution. We are unable to predict whether environmental laws will in
the future materially adversely affect our operations and financial
condition.
USE OF PROCEEDS
Unless we specify otherwise in the applicable prospectus supplement,
we will use the net proceeds from the sale of offered securities for
general corporate purposes, which may include:
* repaying debt;
* funding capital expenditures, including paying for acquisitions;
and
* providing working capital.
We may temporarily invest the net proceeds we receive from any
offering of securities or use the net proceeds to repay short-term debt
until we can use them for their stated purposes.
DESCRIPTION OF COMMON STOCK
As of the date of this prospectus, we are authorized to issue up to
125,000,000 shares of common stock. As of March 15, 2000, we had issued
59,926,289 shares of common stock. As of that date, we also had
approximately 7,429,127 shares of common stock reserved for issuance upon
exercise of options or in connection with other awards outstanding under
various employee or director incentive, compensation and option plans. The
outstanding shares of our common stock are fully paid and nonassessable.
The holders of our common stock are not entitled to preemptive or
redemption rights. Shares of common stock are not redeemable and are not
convertible into shares of any other class of capital stock.
The transfer agent and registrar for our common stock is American
Stock Transfer & Trust Company, New York, New York, 10005.
DIVIDENDS
Subject to any preferences accorded to the holders of our preferred
stock, if and when issued by the board of directors, holders of our common
stock are entitled to dividends at such times and amounts as the board of
directors may determine.
VOTING RIGHTS
Each holder of our common stock is entitled to one vote for each share
of common stock held of record on all matters as to which stockholders are
entitled to vote. Holders of our common stock are not allowed to cumulate
votes for the election of directors.
RIGHTS UPON LIQUIDATION
In the event of our voluntary or involuntary liquidation, dissolution
or winding up, the holders of our common stock will be entitled to share
equally in any of our assets available for distribution after the payment
in full of all debts and distributions and after the holders of all series
of outstanding preferred stock have received their liquidation preferences
in full.
PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BY-LAWS
Our certificate of incorporation contains provisions that limit the
amount of our voting stock (including our common stock) that may be owned
by persons who are not U.S. citizens, which may adversely affect the
liquidity of our common stock in certain situations. In addition, our
certificate of incorporation and bylaws contain provisions that may have an
adverse effect on the ability of our stockholders to influence our
corporate governance.
Summaries of the provisions described in the preceding paragraph, and
certain provisions of Delaware law, are set forth below. However, you
should read our certificate of incorporation and bylaws for a more complete
description of the rights of holders of our common stock.
LIMITATIONS ON OWNERSHIP OF OUR STOCK BY PERSONS WHO ARE NOT U.S.
CITIZENS. Federal maritime laws (including the Merchant Marine Act of
1920, the Merchant Marine Act of 1936, and the Shipping Act of 1916)
provide that vessels may only transport passengers and merchandise between
points in the United States (referred to as "operating in the coastwise
trade") if they are owned by U.S. citizens. For such purposes, a
corporation is considered a U.S. citizen if at least 75% of its outstanding
stock is owned by persons or organizations who are U.S. citizens. Some of
our subsidiaries operate in the coastwise trade, and as a result we are
subject to these requirements. If we were to fail to comply with these
maritime laws, such subsidiaries would not be permitted to continue to
operate vessels in the coastwise trade. Therefore, to facilitate
compliance, our certificate of incorporation contains provisions which are
designed to enable us to regulate the ownership of our capital stock by
persons who are not U.S. citizens, including the following:
* any transfer of shares of our capital stock that would result in
non-U.S. citizens controlling more than 23% (the "permitted
amount") of the total voting power of all of our capital stock
will be void and not effective, except for the purpose of
enabling us to effect the other remedies described below;
* shares of capital stock owned by non-U.S. citizens in excess of
the permitted amount are not entitled to voting rights;
dividends with respect to shares owned by Non-U.S. citizens in
excess of the permitted amount are to be withheld by us until the
shares are transferred to U.S. citizens or the number of shares
held by non-U.S. citizens again does not exceed the permitted
amount;
* we are permitted (but not required) to redeem shares of capital
stock in excess of the permitted amount; and
* our board of directors is authorized to adopt measures that it
determines are necessary or desirable to assure that it can
effectively monitor the citizenship of holders of our capital
stock, including requiring proof of citizenship of existing or
prospective stockholders or implementing a "dual stock
certificate" system whereby U.S. citizens and non-U.S. citizens
would receive different stock certificates.
AMENDMENT OF BY-LAWS. Under Delaware law, the power to adopt, amend
or repeal by-laws is conferred upon stockholders. However, a corporation
may in its certificate of incorporation also confer such power upon the
board of directors. Our certificate of incorporation and by-laws grant
such powers to our board.
ADVANCE NOTICE OF STOCKHOLDER NOMINATIONS AND STOCKHOLDER BUSINESS.
Our bylaws permit stockholders to nominate a person for election as a
director or bring other matters before a stockholders' meeting only if
written notice of an intent to nominate or bring business before a meeting
is given a specified time in advance of the meeting.
DELAWARE SECTION 203. We are subject to Section 203 of the Delaware
General Corporation Law, which imposes a three-year moratorium on the
ability of Delaware corporations to engage in a wide range of specified
transactions with any interested stockholder. An interested stockholder
includes, among other things, any person other than the corporation and its
majority-owned subsidiaries who owns 15% or more of any class or series of
stock entitled to vote generally in the election of directors. However,
the moratorium will not apply if, among other things, the transaction is
approved by:
* the corporation's board of directors prior to the date the
interested stockholder became an interested stockholder; or
* the holders of two-thirds of the outstanding shares of each class
or series of stock entitled to vote generally in the election of
directors, not including those shares owned by the interested
stockholder.
SPECIAL MEETINGS OF THE STOCKHOLDERS. Our bylaws provide that special
meetings of stockholders may be called only by either the chairman of our
board of directors or by a vote of the majority of our board of directors.
Our stockholders do not have the power to call a special meeting.
LIMITATION OF DIRECTORS' LIABILITY. Our certificate of incorporation
contains provisions eliminating the personal liability of our directors to
our company and our stockholders for monetary damages for breaches of their
fiduciary duties as directors to the fullest extent permitted by Delaware
law. Under Delaware law and our certificate of incorporation, our
directors will not be liable for a breach of his or her duty except for
liability for:
* a breach of his or her duty of loyalty to our company or our
stockholders;
* acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
* dividends or stock repurchases or redemptions that are unlawful
under Delaware law; and
* any transaction from which he or she receives an improper
personal benefit.
*
These provisions pertain only to breaches of duty by directors as
directors and not in any other corporate capacity, such as officers. In
addition, these provisions limit liability only for breaches of fiduciary
duties under Delaware corporate law and not for violations of other laws
such as the federal securities laws.
As a result of these provisions in our certificate of incorporation,
our stockholders may be unable to recover monetary damages against
directors for actions taken by them that constitute negligence or gross
negligence or that are in violation of their fiduciary duties. However,
our stockholders may obtain injunctive or other equitable relief for these
actions. These provisions also reduce the likelihood of derivative
litigation against our directors that might have benefitted us.
REGISTRATION RIGHTS AGREEMENTS
In July 1999, in connection with our acquisition of Cardinal, we
entered into two registration rights agreements with the former Cardinal
shareholders. First, under an agreement entered into with the First
Reserve funds, the First Reserve funds will have the right, beginning July
15, 2000, to require us to file a registration statement under the
Securities Act to sell not less than 20% of our common stock owned by the
First Reserve funds. We are only required to make one registration of the
shares held by the First Reserve funds during any twelve month period, and
no more than four registrations during the term of the agreement. Second,
under an agreement with all other former Cardinal shareholders, we filed a
shelf registration statement under the Securities Act of 1933 registering
the resale of shares of our common stock they acquired in our acquisition
of Cardinal. We must keep this registration statement effective until the
earlier of July 15, 2001 or when all shares of our common stock covered by
the registration statement have been sold.
Under both agreements, all of the former Cardinal shareholders also
have the right to include their shares of our common stock in any other
registration statement filed by us involving our common stock.
STOCKHOLDERS' AGREEMENT
In July 1999, in connection with our acquisition of Cardinal, we
entered into a stockholders' agreement with the First Reserve funds which
provides that our board of directors will consist of six members,
consisting of
* two designees of the First Reserve funds,
* two independent directors designated by the First Reserve funds
that are acceptable to the other board members as evidenced by a
majority vote,
* our CEO, and
* such number of independent directors selected by the board to
complete the six man board (although in accordance with the
agreement our CEO has designated, and our board has recommended
for reelection at our 2000 annual meeting, one incumbent director
to serve in lieu of one such independent director).
If the First Reserve funds own less than 15% of our voting power as a
result of sales or other dispositions of our stock, they will lose the
right to designate the two independent directors. The First Reserve funds
will lose their right to designate any directors when they own less than 5%
of our voting power.
The stockholders' agreement will terminate on July 15, 2009 or upon a
sale or other disposition of our stock by the First Reserve funds and their
affiliates that reduces their collective ownership of our stock to less
than 5% of our total voting power, whichever occurs first. Until the
termination of the stockholders' agreement, the First Reserve funds and
their affiliates are prohibited from
* acquiring additional shares of our stock that would result
in their ownership of more than 10%, other than shares
received in the Cardinal acquisition, of our voting power or
of the outstanding shares of any class of our stock;
* disposing of any of our securities, except in
* sales or other transfers to a First Reserve fund or an
affiliate who has signed the stockholders' agreement,
* sales pursuant to Rule 144 promulgated under the Securities
Act,
* sales pursuant to public offerings under the Securities Act,
* sales or exchanges pursuant to a business combination or
similar transaction involving us that is approved by our
board, or
* privately negotiated sales;
* pledging or otherwise granting a security interest in any of
our securities except to secure bona fide loans from lenders
unaffiliated with the First Reserve funds;
and
* advising, assisting, or providing financing to, any person
in connection with a transaction that would result in a
change of our control so long as the First Reserve funds and
their affiliated parties together own 15% or more of our
voting power.
DESCRIPTION OF PREFERRED STOCK
Our certificate of incorporation authorizes our board of directors to
issue up to 5,000,000 shares of preferred stock, par value $.01 per share,
in one or more series. The number of authorized shares of preferred stock
may be increased or decreased by the affirmative vote of the holders of a
majority of our outstanding stock without the separate vote of holders of
preferred stock as a class.
Each series of preferred stock will have specific financial and other
terms which will be described in a prospectus supplement. The description
of the preferred stock that is set forth in any prospectus supplement is
not complete without reference to the documents that govern the preferred
stock, including our certificate of incorporation and the certificate of
designation relating to the applicable series of preferred stock. These
documents have been or will be included or incorporated by reference as
exhibits to the registration statement of which this prospectus is a part.
Our board of directors is authorized to designate, for each series of
preferred stock, the preferences, qualifications, limitations, restrictions
and optional or other special rights of such series, including, but not
limited to:
* the number of shares in the series;
* the name of the series;
* the dividend rate or basis for determining such rate if any, on
the shares of the series;
* whether dividends will be cumulative and, if so, from which date
or dates;
* whether the shares of the series will be redeemable and if so,
the dates, prices and other terms and conditions of redemption;
* whether we will be obligated to purchase or redeem shares of the
series pursuant to a sinking fund or otherwise, and the prices,
periods and other terms and conditions upon which the shares of
the series will be redeemed or purchased;
* the rights, if any, of holders of the shares of the series to
convert such shares into, or exchange such shares for, shares of
any other class of stock;
* whether the shares of the series will have voting rights, in
addition to the voting rights provided by law, and, if so, the
terms of those voting rights; and
* the rights of the shares of the series in the event of the
liquidation, dissolution or winding up of Superior.
Thus, our board of directors could authorize us to issue preferred stock
with voting, conversion and other rights that could adversely affect the
voting power and other rights of holders of our common stock or other
series of preferred stock. Also, the issuance of preferred stock could
have the effect of delaying, deferring or preventing a change in control of
our company.
The shares of preferred stock of any one series will be identical
except for the dates from which dividends will cumulate, if at all. The
shares of preferred stock will be fully paid and nonassessable.
DESCRIPTION OF DEPOSITARY SHARES
We may, at our option, elect to offer fractional shares of preferred
stock, rather than full shares of preferred stock. If we exercise this
option, we will issue to the public receipts for depositary shares, and
each of these depositary shares will represent a fraction, as set forth in
the applicable prospectus supplement, of a share of a particular series of
preferred stock.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a deposit agreement between us and a bank or
trust company selected by us.
Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, in proportion to the applicable fraction
of a share of preferred stock underlying that depositary share, to all the
rights and preferences of the preferred stock underlying that depositary
share. Those rights include dividend, voting, redemption and liquidation
rights.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed
to those persons purchasing the fractional shares of preferred stock
underlying the depositary shares, in accordance with the terms of the
offering. Copies of the deposit agreement and depositary receipt will be
filed with the SEC in connection with the offering of specific depositary
shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to the preferred stock to the record
holders of depositary shares relating to the preferred stock in proportion
to the number of depositary shares owned by those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary
shares that are entitled to receive the distribution, unless the depositary
determines that it is not feasible to make the distribution. If this
occurs, the depositary may, with our approval, sell the property and
distribute the net proceeds from the sale to the applicable holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of preferred stock represented by depositary shares is
subject to redemption, the depositary shares will be redeemed from the
proceeds received by the depositary resulting from the redemption, in whole
or in part, of that series of preferred stock held by the depositary. The
redemption price per depositary share will be equal to the applicable
fraction of the redemption price per share payable with respect to that
series of the preferred stock.
Whenever we redeem shares of preferred stock that are held by the
depositary, the depositary will redeem, as of the same redemption date, the
number of depositary shares representing the shares of preferred stock so
redeemed. If fewer than all the depositary shares are to be redeemed, the
depositary will select the depositary shares to be redeemed by lot or pro
rata, as the depositary may determine.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
preferred stock are entitled to vote, the depositary will mail the
information contained in the notice to the record holders of the depositary
shares underlying the preferred stock. Each record holder of the
depositary shares on the record date (which will be the same date as the
record date for the preferred stock) will be entitled to instruct the
depositary as to the exercise of the voting rights pertaining to the amount
of the preferred stock represented by the holder's depositary shares. The
depositary will then try, as far as practicable, to vote the number of
shares of preferred stock underlying those depositary shares in accordance
with these instructions, and we agree to take all actions deemed necessary
by the depositary to enable the depositary to do so. The depositary will
not vote the shares of preferred stock to the extent it does not receive
specific instructions from the holders of depositary shares underlying the
preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of depositary receipt evidencing the depositary shares and
any provision of the deposit agreement may at any time be amended by
agreement between us and the depositary. However, any amendment which
materially and adversely alters the rights of the holders of depositary
shares will not be effective unless the holders of at least a majority of
the depositary shares then outstanding approve the amendment. We or the
depositary may terminate the deposit agreement only if (a) all outstanding
depositary shares have been redeemed or (b) there has been a final
distribution of the underlying preferred stock in connection with our
liquidation, dissolution or winding up and the preferred stock has been
distributed to the holders of depositary receipts.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. We will
also pay charges of the depositary in connection with the initial deposit
of the preferred stock and any redemption of the preferred stock. Holders
of depositary receipts will pay other transfer and other taxes and
governmental charges and those other charges, including a fee for the
withdrawal of shares of preferred stock upon surrender of depositary
receipts, as are expressly provided in the deposit agreement to be for
their accounts.
MISCELLANEOUS
The depositary will forward to holders of depositary receipts all
reports and communications from us that we deliver to the depositary and
that we are required to furnish to the holders of the preferred stock.
Neither we nor the depositary will be liable if either of us is
prevented or delayed by law or any circumstance beyond our control in
performing our respective obligations under the deposit agreement. Our
obligations and those of the depositary will be limited to performance in
good faith of our respective duties under the deposit agreement. Neither
we nor they will be obligated to prosecute or defend any legal proceeding
in respect of any depositary shares or preferred stock unless satisfactory
indemnity is furnished. We and the depositary may rely upon written advice
of counsel or accountants, or upon information provided by persons
presenting preferred stock for deposit, holders of depositary receipts or
other persons believed to be competent and on documents believed to be
genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering notice to us of
its election to resign. We may remove the depositary at any time. Any
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of the appointment. We must appoint the
successor depositary within 60 days after delivery of the notice of
resignation or removal.
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt
securities that we may issue under the shelf registration statement. The
following description highlights the general terms and provisions of the
debt securities. The summary is not complete. The prospectus supplement
will describe the specific terms of the debt securities offered by that
prospectus supplement, and may update or change some of the information
below.
We may issue debt securities either separately or together with, or
upon the conversion of, or in exchange for, other securities. Unless we
specify otherwise in the applicable prospectus supplement, any debt
securities we offer will be our direct, unsecured general obligations. The
debt securities will either be senior debt securities or subordinated debt
securities. The senior debt securities will rank equally with all of our
other senior and unsubordinated debt. The subordinated debt securities
will have a junior position to all of our senior debt securities.
We may issue the debt securities in one or more series. We will
issue debt securities under an "indenture" to be entered into by us and a
"trustee" qualified under the Trust Indenture Act of 1939. Senior debt
securities will be issued under a "senior indenture" and subordinated debt
securities will be issued under a "subordinated indenture." (The senior
indenture and the subordinated indenture are referred to together as the
"indentures.") The related indenture will be supplemented (each supplement
referred to as a "supplemental indenture") with respect to each series of
debt securities we issue. The name of the trustee for each indenture will
be set forth in the applicable prospectus supplement.
The indentures and each supplemental indenture will be included or
incorporated by reference as exhibits to the registration statement of
which this prospectus is a part. You should read the related indenture and
any supplemental indenture for provisions that may be important to you.
You should also read the related prospectus supplement, which will contain
additional information about the particular debt securities and which may
update or change the information below.
The indentures will be subject to and governed by the Trust Indenture
Act.
SPECIFIC TERMS OF EACH SERIES OF DEBT SECURITIES IN THE PROSPECTUS
SUPPLEMENT
The applicable prospectus supplement will describe the terms of any
debt securities being offered, including:
* the designation and aggregate principal amount;
* the maturity date;
* the interest rate, if any, and the method for calculating the
interest rate;
* the interest payment dates and the record dates for the interest
payments;
* any mandatory or optional redemption terms or prepayment,
conversion, sinking fund or exchangeability or convertibility
provisions;
* any subordination provisions relating to the debt securities;
* the places where the principal and interest will be payable;
* the denominations the debt securities will be issued in;
* whether the debt securities will be issued in the form of global
securities or certificates;
* additional provisions, if any, relating to the defeasance and
covenant defeasance of the debt securities;
* any applicable material federal tax consequences;
* the dates on which a premium, if any, will be payable;
* our right, if any, to defer payment of interest and the maximum
length of such deferral period;
* any listing on a securities exchange;
* if convertible into common stock, the terms on which such debt
securities are convertible;
* the terms of each guarantee of the payment of principal, interest
and any premium on debt securities of the series;
* the terms, if any, of the transfer, mortgage, pledge, or
assignment as security for the debt securities of the series of
any properties, assets, moneys, proceeds, securities or other
collateral, including whether certain provisions of the Trust
Indenture Act are applicable, and any corresponding changes to
provisions of the indenture as currently in effect;
* the initial public offering price; and
* other specific terms, including covenants and the events of
default provided for with respect to the debt securities.
Debt securities may bear interest at a fixed rate or a floating rate,
or may not bear interest. Debt securities bearing no interest or interest
at a rate that at the time of issuance is below the prevailing market rate
may be sold at a discount (which may be significant) below their stated
principal amount. We will describe in the applicable prospectus supplement
special United States federal income tax considerations applicable to any
discounted debt securities or to debt securities issued at par that are
treated as having been issued at a discount for United States federal
income tax purposes.
COVENANTS
With respect to each series of debt securities, we will be required
to:
* pay the principal, interest and any premium on the debt
securities when due;
* maintain a place of payment;
* deliver a report to the trustee at the end of each fiscal year
reviewing our obligations under the indenture; and
* deposit sufficient funds with any paying agent on or before the
due date for any principal, interest or any premium.
In addition, the supplemental indenture for any particular series of debt
securities may contain covenants limiting:
* the incurrence of additional debt (including guarantees) by us
and our subsidiaries;
* the making of certain payments by us and our subsidiaries;
* the issuance of other securities by our subsidiaries;
* a change of control;
* certain mergers and consolidations involving us and our
subsidiaries;
* our business activities and those of our subsidiaries;
* asset dispositions;
* the incurrence of liens; and
* transactions with our subsidiaries and other affiliates.
We will describe any additional covenants in the applicable prospectus
supplement.
RANKING; SUBORDINATION
Unless we specify otherwise in the applicable prospectus supplement,
the debt securities will not be secured by any of our property or assets.
Accordingly, your ownership of debt securities means you will be one of our
unsecured creditors.
Under the subordinated indenture, payment of the principal, interest
and any premium on the subordinated debt securities will generally be
subordinated and junior in right of payment to the prior payment in full of
all of our senior debt. The subordinated indenture will provide that we
may not make payments of principal, interest and any premium on the
subordinated debt securities in the event:
* of any insolvency, bankruptcy or similar proceeding involving us
or our property; or
* we fail to pay the principal, interest, any premium or any other
amounts on any senior debt when such amounts are due.
The subordinated indenture will not limit the amount of senior debt
that we may incur.
Our "senior debt" for purposes of the subordinated indenture will
include all notes or other unsecured evidences of indebtedness, including
guarantees given by us, for money borrowed by us, not expressly subordinate
or junior or right in payment to our other indebtedness.
CONVERTIBLE DEBT SECURITIES
We may issue debt securities from time to time that are convertible
into our common stock. If you hold convertible debt securities, you will
be permitted at certain times specified in the applicable prospectus
supplement to convert your debt securities into common stock for a
specified price. We will describe the conversion price (or the method for
determining the conversion price) and the other terms applicable to
conversion in the applicable prospectus supplement.
GUARANTEES
One or more of our subsidiaries, as guarantors, will, jointly and
severally, fully and unconditionally guarantee our obligations under the
debt securities on an equal and ratable basis subject to the limitation
described in the next paragraph. In addition, any supplemental indenture
may require us to cause any domestic entity that becomes one of our
subsidiaries after the date of any supplemental indenture to enter into a
supplemental indenture pursuant to which such subsidiary shall agree to
guarantee our obligations under the debt securities. If we default in
payment of the principal, interest or any premium on such debt securities,
the guarantors, jointly and severally, will be unconditionally obligated to
duly and punctually make such payments.
Each guarantor's obligations will be limited to the maximum amount
that (after giving effect to all other contingent and fixed liabilities of
such guarantor any collections from, or payments made by or on behalf of,
any other guarantors) will result in the obligations of such guarantor
under the guarantee not constituting a fraudulent conveyance or fraudulent
transfer under Federal or state law. Each guarantor that makes a payment
or distribution under its guarantee shall be entitled to contribution from
each other guarantor in a pro rata amount based on the net assets of each
guarantor.
Guarantees of senior debt securities (including the payment of principal,
interest and any premium on such debt securities) will rank pari passu in
right of payment with all other unsecured and unsubordinated indebtedness
of the guarantor and will rank senior in right of payment to all
subordinated indebtedness of such guarantor. Guarantees of subordinated
debt securities will generally be subordinated and junior in right of
payment to the prior payment in full of all senior indebtedness of the
guarantor.
The prospectus supplement for a particular issue of debt securities
will describe the subsidiary guarantors and any additional material terms
of the guarantees.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
We may issue the debt securities in registered form without coupons or
in the form of one or more global securities, as described below under the
heading "Global Securities." Unless we specify otherwise in the prospectus
supplement, registered securities will be issued only in denominations of
$1,000 or any integral multiple of $1,000. Global securities will be
issued in a denomination equal to the total principal amount of outstanding
debt securities of the series represented by the global security.
You may present registered securities for exchange or transfer at the
corporate trust office of the trustee or at any other office or agency
maintained by us for such purpose, without payment of any service charge
except for any tax or governmental charge.
We will pay principal and any premium and interest on registered
securities at the corporate trust office of the trustee or at any other
office or agency maintained by us for such purpose. We may choose to make
any interest payment on a registered security (1) by check mailed to the
address of the holder as such address shall appear in the register or (2)
if provided in the prospectus supplement, by wire transfer to an account
maintained by the holder as specified in the register. We will make
interest payments to the person in whose name the debt security is
registered at the close of business on the day we specify.
GLOBAL SECURITIES
We may issue the debt securities in whole or in part in the form of
one or more global securities. A global security is a security, typically
held by a depositary such as the Depository Trust Company, that represents
the beneficial interests of a number of purchasers of such security. We
may issue the global securities in either registered or bearer form and in
either temporary or permanent form. We will deposit global securities with
the depositary identified in the prospectus supplement. Unless it is
exchanged in whole or in part for debt securities in definitive form, a
global certificate may generally be transferred only as a whole unless it
is being transferred to certain nominees of the depositary.
We will describe the specific terms of the depositary arrangement with
respect to a series of debt securities in a prospectus supplement. We
expect that the following provisions will generally apply to depositary
arrangements.
After we issue a global security, the depositary will credit on its book-
entry registration and transfer system the respective principal amounts of
the debt securities represented by such global security to the accounts of
persons that have accounts with such depositary ("participants"). The
underwriters or agents participating in the distribution of the debt
securities will designate the accounts to be credited. If we offer and
sell the debt securities directly or through agents, either we or our
agents will designate the accounts. Ownership of beneficial interests in a
global security will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests in the
global security will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the depositary and its
participants.
We and the trustee will treat the depositary or its nominee as the
sole owner or holder of the debt securities represented by a global
security. Except as set forth below, owners of beneficial interests in a
global security will not be entitled to have the debt securities
represented by such global security registered in their names, will not
receive or be entitled to receive physical delivery of such debt securities
in definitive form and will not be considered the owners or holders of the
debt securities. The laws of some states require that certain purchasers
of securities take physical delivery of the securities. Such laws may
impair the ability to transfer beneficial interests in a global security.
Principal, any premium and any interest payments on debt securities
represented by a global security registered in the name of a depositary or
its nominee will be made to such depositary or its nominee as the
registered owner of such global security.
We expect that the depositary or its nominee, upon receipt of any
payments, will immediately credit participant's accounts with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of the global security as shown on the depositary's or its
nominee's records. We also expect that payments by participants to owners
of beneficial interest in the global security will be governed by standing
instructions and customary practices, as is the case with the securities
held for the accounts of customers registered in "street names" and will be
the responsibility of such participants.
If the depositary is at any time unwilling or unable to continue as
depositary and we do not appoint a successor depositary within ninety days,
we will issue individual debt securities in exchange for such global
security. In addition, we may at any time in our sole discretion determine
not to have any of the debt securities of a series represented by global
securities and, in such event, will issue debt securities of such series in
exchange for such global security.
Neither we, the trustee nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in such global
security or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests. No such person will be liable for
any delay by the depositary or any of its participants in identifying the
owners of beneficial interests in a global security, and we, the trustee
and any paying agent may conclusively rely on instructions from the
depositary or its nominee for all purposes.
CONSOLIDATION, MERGER OR SALE OF ASSETS
The indentures will generally permit a consolidation or merger between
us and another corporation or other entity. They will also permit the sale
or lease by us of all or substantially all of our property and assets. If
this happens, the remaining or acquiring corporation or other entity shall
assume all of our responsibilities and liabilities under the indentures,
including the payment of all amounts due on the debt securities and
performance of the covenants in the indentures.
We are only permitted to consolidate or merge with or into any other
entity or sell all or substantially all of our assets according to the
terms and conditions of the indentures and any supplemental indentures.
The remaining or acquiring entity will be substituted for us in the
indentures and any supplemental indentures with the same effect as if it
had been an original party thereto. Thereafter, the successor entity may
exercise our rights and powers under the indentures, in our name or in its
own name. Any act or proceeding required or permitted to be done by our
board of directors or any of our officers may be done by the board of
officers of the successor entity. If we consolidate or merge with or into
any other entity or sell all or substantially all of our assets, we shall
be released from all our liabilities and obligations under the indentures
and under the debt securities.
EVENTS OF DEFAULT
Unless we state otherwise in an applicable prospectus supplement, an
"event of default" with respect to each series of debt securities means any
of the following:
* failure to pay interest on any debt security of that series for
30 days;
* failure to pay the principal or any premium on any debt security
of that series when due;
* failure to deposit any sinking fund payment when due;
* failure to comply with the provisions of the related indenture or
any supplemental indenture relating to consolidations, mergers
and sales of assets;
* failure to perform any other covenant with respect to that series
in the related indenture or any supplemental indenture that
continues for 60 days after being given written notice;
* certain events in bankruptcy, insolvency or reorganization of us
or a significant subsidiary;
* the entry of a judgment in excess of the amount specified in the
related indenture or any supplemental indenture against us or
such significant subsidiary which is not covered by insurance and
not discharged, waived or stayed; or
* any other event of default included in the related indenture or
any supplemental indenture.
An event of default for a particular series of debt securities does
not necessarily constitute an event of default for any other series of debt
securities.
The consequences of an event of default, and the remedies available
under the indentures or any supplemental indentures, will vary depending
upon the type of event of default that has occurred.
If an event of default relating to certain events in bankruptcy,
insolvency or reorganization of us or a significant subsidiary occurs and
continues, the entire principal of all the debt securities of all series
will be due and payable immediately.
If any other event of default for any series of debt securities occurs
and continues, the trustee or the holders of a specified percentage of the
aggregate principal amount of the debt securities of the series may declare
the entire principal of all the debt securities of that series to be due
and payable immediately. If this happens, subject to certain conditions,
the holders of a majority of the aggregate principal amount of the debt
securities of that series can void the declaration. The trustee may
withhold notice to the holders of debt securities of any default (except in
the payment of principal or interest or in the making of any sinking fund
payment) if it considers such withholding of notice to be in the interests
of the holders.
Other than its duties in case of a default, a trustee is not obligated
to exercise any of its rights or powers under the indentures or any
supplemental indentures at the request, order or direction of any holders,
unless the holders offer the trustee reasonable indemnity. If they provide
this reasonable indemnification, the holders of a specified percentage of
the aggregate principal amount of any series of debt securities may direct
the time, method and place of conducting any proceeding or any remedy
available to the trustee, or exercising any power conferred upon the
trustee, for any series of debt securities.
No holder of any debt security can institute any action or proceeding
with respect to an indenture or any supplemental indenture unless the
holder gives written notice of an event of default to the trustee, the
holders of a specified percentage of the aggregate principal amount of the
outstanding debt securities of the applicable series shall have requested
the trustee to institute the action or proceeding and has appropriately
indemnified the trustee, and the trustee has failed to institute the action
or proceeding within a specified time period.
DISCHARGING OUR OBLIGATIONS
Except as may otherwise be set forth in any prospectus supplement, we
may choose to either discharge our obligations on the debt securities of
any series in a "legal defeasance" or release ourselves from our covenant
restrictions on the debt securities of any series in a "covenant
defeasance." We may do so at any time prior to the stated maturity or
redemption of the debt securities of the series if, among other conditions:
* we deposit with the trustee sufficient cash or U.S. government
securities to pay the principal, interest, any premium and any
other sums due to the stated maturity date or redemption date of
the debt securities of the series; and
* we provide an opinion of our counsel that holders of the debt
securities will not be affected for U.S. federal income tax
purposes by the defeasance.
If we choose the legal defeasance option, holders of the debt
securities of that series will not be entitled to the benefits of the
related indenture except for registration of transfer and exchange of debt
securities, replacement of lost, stolen or mutilated debt securities, any
required conversion or exchange of debt securities, any required sinking
fund payments and receipt of principal and interest on the original stated
due dates or specified redemption dates.
MODIFICATION AND WAIVER
Unless we state otherwise in the applicable prospectus supplement, the
indentures and each supplemental indenture will provide that we and the
trustee may enter into supplemental indentures without the consent of the
holders of debt securities to
* secure the debt securities;
* evidence the assumption of our obligations by a successor entity;
* add covenants or events of default for the protection of the
holders of any debt securities;
* establish the form or terms of debt securities of any series;
* provide for uncertificated securities in addition to certificated
securities (so long as the uncertificated securities are in
registered form for tax purposes)
* evidence the acceptance of appointment by a successor trustee;
* in the case of subordinated debt securities, to make any change
to the provisions of the subordinated indenture relating to
subordination that would limit or terminate the benefits
available to any holder of senior debt under such provisions;
* cure any ambiguity or correct any inconsistency in the indenture
or amend the indenture in any other manner which we may deem
necessary or desirable, if such action will not adversely affect
the interests of the holders of debt securities; or
* make any change to comply with any requirement of the Securities
and Exchange Commission relating to the qualification of the
indenture under the Trust Indenture Act of 1939.
Unless we state otherwise in the applicable prospectus supplement,
each indenture and any supplemental indenture will also contain provisions
permitting us and the trustee to modify the provisions of the indenture and
any supplemental indenture or modify in any manner the rights of the
holders of the debt securities of each such series if we obtain the consent
of the holders of a majority in outstanding principal amount of debt
securities of all affected series (voting as a single class). However, if
you hold debt securities, we must get your consent to make any change that
would:
* extend the final maturity of your debt securities;
* reduce the principal amount of your debt securities;
* reduce or alter the method of computation of any amount payable
in respect of interest on your debt securities;
* extend the time for payment of interest on your debt securities;
* reduce or alter the method of computation of any amount payable
on redemption of your debt securities;
* extend the time for any redemption payment on your debt
securities;
* reduce the amount payable upon acceleration of your debt
securities;
* in the case of subordinated debt securities, make any change in
the subordination provisions of the subordinated indenture that
adversely affects your rights under such provisions;
* impair your right to institute suit for the enforcement of any
conversion or any payment on any of your debt securities when due
or materially and adversely affect any of your conversion rights;
* reduce the percentage in principal amount of debt securities of a
series required to make other modifications to the indenture.
THE TRUSTEE
The Trust Indenture Act contains limitations on the rights of the
trustee under an indenture, should it become a creditor of ours, to obtain
payment of claims in certain cases or to realize on certain property
received by it in respect of any such claims, as security or otherwise.
The trustee is permitted to engage in other transactions with us and our
subsidiaries from time to time, provided that if the trustee acquires any
conflicting interest it must eliminate such conflict upon the occurrence of
an event of default under the related indenture, or else resign.
GOVERNING LAW
The indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of New York.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus directly to one
or more purchasers or to or through agents, underwriters or dealers.
In the accompanying prospectus supplement we will identify or
describe:
* any underwriters, dealers or agents;
* their compensation;
* the net proceeds to be received by us;
* the purchase price of the securities;
* the initial public offering price of the securities; and
* any exchange on which the securities are listed.
AGENTS. We may designate agents who agree to use their reasonable
efforts to solicit purchases for the period of their appointment to sell
securities on a continuing basis.
UNDERWRITERS. If we use underwriters for a sale of securities, the
underwriters will acquire the securities for their own account. The
underwriters may resell the securities in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Any initial public offering
price and any discounts or concessions allowed or re-allowed or paid to
dealers may be changed from time to time.
DIRECT SALES. We may also sell securities directly to one or more
purchasers without using underwriters or agents.
Underwriters, dealers, and agents that participate in the distribution
of the securities may be underwriters as defined in the Securities Act of
1933, and any discounts or commissions they receive from us and any profit
on their resale of the debt securities may be treated as underwriting
discounts and commissions under the Securities Act. We may have agreements
with the underwriters, dealers and agents to indemnify them against certain
civil liabilities, including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with or perform
services for us in the ordinary course of their businesses.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be
passed upon for us by Jones, Walker, Waechter, Poitevent, Carrre &
Dengre, L.L.P., New Orleans, Louisiana and for any underwriters,
dealers or agents by counsel which we will name in the applicable
prospectus supplement.
EXPERTS
The consolidated financial statements and schedule of Superior Energy
Services, Inc. and subsidiaries as of and for the year ended December 31,
1999, have been incorporated by reference herein in reliance upon the
report of KPMG LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of Superior Energy Services,
Inc. and subsidiaries (formerly Cardinal Holding Corp.) as of December 31,
1998, and for each of the two years in the period ended December 31, 1998
appearing in Superior's annual report on Form 10-K for the year ended
December 31, 1999 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given on
the authority of such firm as experts in accounting and auditing.
