EXHIBIT 4.5
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FORM OF
AMENDED AND RESTATED DECLARATION OF TRUST
OF
POGO TRUST I
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DATED AS OF [___________, ________]
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS..........................................................2
AFFILIATE..................................................................2
BOOK ENTRY INTEREST........................................................2
BUSINESS DAY...............................................................2
BUSINESS TRUST ACT.........................................................3
CERTIFICATE................................................................3
CERTIFICATE OF TRUST.......................................................3
CLEARING AGENCY............................................................3
CLEARING AGENCY PARTICIPANT................................................3
CLOSING DATE...............................................................3
CODE.......................................................................3
COMMISSION.................................................................3
COMMON SECURITIES..........................................................3
COMMON SECURITY CERTIFICATE................................................3
[COMMON STOCK].............................................................3
[CONVERSION AGENT].........................................................3
COVERED PERSON.............................................................3
CREDITOR ..................................................................3
DEBENTURE TRUSTEE..........................................................4
DEBENTURES.................................................................4
DEFINITIVE PREFERRED SECURITY CERTIFICATES.................................4
DELAWARE TRUSTEE...........................................................4
DEPOSITARY AGREEMENT.......................................................4
DISTRIBUTION...............................................................4
DTC........................................................................4
EVENT OF DEFAULT...........................................................4
EXCHANGE...................................................................4
EXCHANGE ACT...............................................................4
FISCAL YEAR................................................................4
GLOBAL CERTIFICATE.........................................................4
HOLDER.....................................................................4
HOLDER DIRECT ACTION.......................................................4
INDEMNIFIED PERSON.........................................................4
INDENTURE..................................................................4
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*This Table of Contents does not constitute part of the Amended and Restated
Declaration of Trust and should not have any bearing upon the interpretation of
any of its terms or provisions.
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INDENTURE EVENT OF DEFAULT...................................................5
INVESTMENT COMPANY...........................................................5
INVESTMENT COMPANY ACT.......................................................5
LEGAL ACTION.................................................................5
LIQUIDATION DISTRIBUTION.....................................................5
LIST OF HOLDERS..............................................................5
MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES.............................5
NASD.........................................................................5
NASDAQ.......................................................................5
1933 ACT REGISTRATION STATEMENT..............................................5
1934 ACT REGISTRATION STATEMENT..............................................5
OFFICERS' CERTIFICATE........................................................5
OPINION OF COUNSEL...........................................................6
OPTION CLOSING DATE..........................................................6
ORIGINAL DECLARATION.........................................................6
PAYING AGENT.................................................................6
PAYMENT AMOUNT...............................................................6
PERSON.......................................................................6
POGO.........................................................................6
PREFERRED SECURITIES GUARANTEE...............................................6
PREFERRED SECURITIES.........................................................6
PREFERRED SECURITY BENEFICIAL OWNER..........................................6
PREFERRED SECURITY CERTIFICATE...............................................7
PROPERTY TRUSTEE.............................................................7
PROPERTY ACCOUNT.............................................................7
QUORUM.......................................................................7
REGULAR TRUSTEE..............................................................7
RELATED PARTY................................................................7
RESIGNATION REQUEST..........................................................7
RESPONSIBLE OFFICER..........................................................7
RULE 3a-7....................................................................7
SECURITIES...................................................................7
SECURITIES ACT...............................................................7
SPECIAL EVENT................................................................7
SUCCESSOR DELAWARE TRUSTEE...................................................7
SUCCESSOR ENTITY.............................................................7
SUCCESSOR PROPERTY TRUSTEE...................................................8
SUCCESSOR SECURITIES.........................................................8
SUPER MAJORITY...............................................................8
SUPPLEMENTAL INDENTURE.......................................................8
10% IN LIQUIDATION AMOUNT OF THE SECURITIES..................................8
TREASURY REGULATIONS.........................................................8
TRUST........................................................................8
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TRUSTEE......................................................................8
TRUSTEES.....................................................................8
TRUST INDENTURE ACT..........................................................8
UNDERWRITING AGREEMENT.......................................................8
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION......................................9
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES..............................9
SECTION 2.03. REPORTS BY THE PROPERTY TRUSTEE.......................................9
SECTION 2.04. PERIODIC REPORTS TO THE PROPERTY TRUSTEE.............................10
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.....................10
SECTION 2.06. EVENTS OF DEFAULT; WAIVER............................................10
SECTION 2.07. DISCLOSURE OF INFORMATION............................................12
ARTICLE 3
ORGANIZATION
SECTION 3.01. NAME.................................................................12
SECTION 3.02. OFFICE...............................................................12
SECTION 3.03. ISSUANCE OF THE SECURITIES...........................................12
SECTION 3.04. PURCHASE OF DEBENTURES...............................................13
SECTION 3.05. PURPOSE..............................................................13
SECTION 3.06. AUTHORITY............................................................14
SECTION 3.07. TITLE TO PROPERTY OF THE TRUST.......................................14
SECTION 3.08. POWERS AND DUTIES OF THE REGULAR TRUSTEES............................14
SECTION 3.09. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.................17
SECTION 3.10. POWERS AND DUTIES OF THE PROPERTY TRUSTEE............................18
SECTION 3.11. DELAWARE TRUSTEE.....................................................21
SECTION 3.12. CERTAIN RIGHTS AND DUTIES OF THE PROPERTY TRUSTEE....................21
SECTION 3.13. REGISTRATION STATEMENT AND RELATED MATTERS...........................23
SECTION 3.14. FILING OF AMENDMENTS TO CERTIFICATE OF TRUST.........................24
SECTION 3.15. EXECUTION OF DOCUMENTS BY THE REGULAR TRUSTEES.......................24
SECTION 3.16. TRUSTEES NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES......25
SECTION 3.17. DURATION OF THE TRUST................................................25
SECTION 3.18. MERGERS..............................................................25
SECTION 3.19. PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM............................27
ARTICLE 4
SPONSOR
SECTION 4.01. PURCHASE OF COMMON SECURITIES BY THE SPONSOR.........................28
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SECTION 4.02. EXPENSES.............................................................28
ARTICLE 5
TRUSTEES
SECTION 5.01. NUMBER OF TRUSTEES; QUALIFICATIONS....................................29
SECTION 5.02. APPOINTMENT, REMOVAL AND RESIGNATION OF THE TRUSTEES..................31
SECTION 5.03. VACANCIES AMONG THE TRUSTEES..........................................32
SECTION 5.04. EFFECT OF VACANCIES...................................................32
SECTION 5.05. MEETINGS..............................................................32
SECTION 5.06. DELEGATION OF POWER...................................................33
SECTION 5.07. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...........33
ARTICLE 6
DISTRIBUTIONS
SECTION 6.01. DISTRIBUTIONS.........................................................33
ARTICLE 7
ISSUANCE OF THE SECURITIES
SECTION 7.01. GENERAL PROVISIONS REGARDING THE SECURITIES...........................34
[SECTION 7.02. CONVERSION AGENT.....................................................35]
ARTICLE 8
DISSOLUTION OF THE TRUST
SECTION 8.01. DISSOLUTION OF THE TRUST.............................................36
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.01. TRANSFER OF SECURITIES...............................................36
SECTION 9.02. TRANSFER OF CERTIFICATES.............................................37
SECTION 9.03. DEEMED SECURITY HOLDERS..............................................37
SECTION 9.04. BOOK ENTRY INTERESTS.................................................37
SECTION 9.05. NOTICES TO HOLDERS OF CERTIFICATES...................................38
SECTION 9.06. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.............................38
SECTION 9.07. DEFINITIVE PREFERRED SECURITIES CERTIFICATES.........................39
SECTION 9.08. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES....................39
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ARTICLE 10
LIMITATION OF LIABILITY; INDEMNIFICATION
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SECTION 10.01. EXCULPATION.........................................................39
SECTION 10.02. INDEMNIFICATION.....................................................40
SECTION 10.03. OUTSIDE business....................................................40
ARTICLE 11
ACCOUNTING
SECTION 11.01. FISCAL YEAR.........................................................41
SECTION 11.02. CERTAIN ACCOUNTING MATTERS..........................................41
SECTION 11.03. BANKING.............................................................42
SECTION 11.04. WITHHOLDING.........................................................42
ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.01. AMENDMENTS..........................................................42
SECTION 12.02. MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.............................................................43
ARTICLE 13
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 13.01. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE..............45
SECTION 13.02. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE..............45
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. NOTICES.............................................................46
SECTION 14.02. UNDERTAKING FOR COSTS...............................................47
SECTION 14.03. GOVERNING LAW.......................................................48
SECTION 14.04. HEADINGS............................................................48
SECTION 14.05. PARTIAL ENFORCEABILITY..............................................48
SECTION 14.06. COUNTERPARTS........................................................48
SECTION 14.07. INTENTION OF THE PARTIES............................................48
SECTION 14.08. SUCCESSORS AND ASSIGNS..............................................48
SECTION 14.09. NO RECOURSE.........................................................49
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SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
POGO TRUST I
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated
and effective as of [__________, ____] by ______________, an individual,
___________, an individual, and ___________, an individual, as Regular Trustees
(the "Regular Trustees"), Wilmington Trust Company, as Property Trustee (the
"Property Trustee") and Wilmington Trust Company, as Delaware Trustee (the
"Delaware Trustee") (together with all other Persons from time to time duly
appointed and serving as trustees in accordance with the provisions of this
Declaration, the "Trustees"), Pogo Producing Company, a Delaware corporation, as
trust sponsor ("Pogo" or the "Sponsor"), and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a
Declaration of Trust dated as of March 17, 1999 (the "Original Declaration") in
order to establish Pogo Trust I, a statutory business trust (the "Trust"), under
the Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the
Trust was filed with the office of the Secretary of State of the State of
Delaware on March 18, 1999; and
WHEREAS, the Trustees and the Sponsor desire to continue the Trust
pursuant to the Business Trust Act for the purpose of, as described more
fully in Sections 3.03 and 3.04 hereof, (i) issuing and selling Preferred
Securities (as hereinafter defined) representing preferred undivided
beneficial interests in the assets of the Trust for cash and investing the
proceeds thereof in Debentures (as hereinafter defined) of Pogo issued under
the Indenture (as hereinafter defined) to be held as assets of the Trust and
(ii) issuing and selling Common Securities (as hereinafter defined)
representing common undivided beneficial interests in the assets of the Trust
to Pogo in exchange for cash and investing the proceeds thereof in additional
Debentures issued under the Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Act, that the
Original Declaration be amended and restated in its entirety as provided
herein and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all Debentures referred to in
clauses (i) and (ii) of the previous paragraph purchased by the Trust will be
held for the benefit of the Holders (as hereinafter defined) from time to
time, of the Certificates (as hereinafter defined) representing undivided
beneficial interests in the assets of the Trust issued hereunder, subject to
the provisions of this Declaration.
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Amended and Restated Declaration of Trust (including Exhibits A, B and C
hereto (the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections and
Exhibits are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"AFFILIATE" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of this definition, beneficial ownership of 10% or more
of the voting common equity (on a fully diluted basis) or options or warrants to
purchase such equity (but only if exercisable at the date of determination or
within 60 days thereof) of a Person shall be deemed to constitute control of
such Person. No Person shall be deemed an Affiliate of an oil and gas royalty
trust solely by virtue of ownership of units of beneficial interest in such
trust.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.04.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which banking institutions in the Borough of Manhattan, The City and State of
New York, Wilmington, Delaware or Houston, Texas are authorized or required by
law or executive order to close.
2
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware Code,
12 DEL. CODE Section 3801 ET SEQ., as it may be amended from time to time, or
any successor legislation.
"CERTIFICATE" means a Common Security Certificate or a Preferred
Security Certificate.
"CERTIFICATE OF TRUST" has the meaning set forth in the second WHEREAS
clause above.
"CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depository
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section (Sec.) of
the Code refers not only to such specific section but also to any corresponding
provision of any Federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" has the meaning specified in Section 7.01(b).
"COMMON SECURITY CERTIFICATE" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
["COMMON STOCK" means the common stock, par value $1.00 per share, of
Pogo or any other class of stock, other securities, cash or other assets into
which the Debentures are then convertible.]
["CONVERSION AGENT" has the meaning specified in Section 7.02.]
"COVERED PERSON" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of Pogo or of any of its Affiliates and (iii) the Holders from time to
time of the Securities.
"CREDITOR" has the meaning specified in Section 4.02(c).
3
"DEBENTURE TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder and thereafter means such successor trustee.
"DEBENTURES" means the series of junior subordinated debentures issued
by Pogo under the Indenture to the Property Trustee and entitled the "[____]%
Junior Subordinated Debentures due [_______________]".
"DEFINITIVE PREFERRED SECURITY CERTIFICATES" has the meaning set forth
in Section 9.04.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.01(a)(3).
"DEPOSITARY AGREEMENT" means the agreement among the Trust, the
Property Trustee and DTC dated as of the Closing Date, as the same may be
amended or supplemented from time to time.
"DISTRIBUTION" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"EVENT OF DEFAULT" in respect of the Securities means that an Indenture
Event of Default has occurred and is continuing with respect to the Debentures.
"EXCHANGE" has the meaning specified in Section 3.13.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"FISCAL YEAR" has the meaning specified in Section 11.01.
"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.04.
"HOLDER" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"HOLDER DIRECT ACTION" has the meaning specified in Section 3.10(e).
"INDEMNIFIED PERSON" means any Trustee, any Affiliate of any Trustee,
[any Conversion Agent], any Paying Agent, any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trustee,
[Conversion Agent] or Paying Agent, or any employee or agent of the Trust or of
any of its Affiliates.
"INDENTURE" means the Junior Subordinated Indenture dated as of
[_______ __, ____] between Pogo and the Debenture Trustee as supplemented by the
[_______] Supplemental Indenture thereto dated as of [____________, ____],
pursuant to which the Debentures are to be issued.
4
"INDENTURE EVENT OF DEFAULT" means that an event or condition defined
as an "Event of Default" with respect to the Debentures under Section 6.01(a) of
the Indenture has occurred and is continuing.
"INVESTMENT COMPANY" means an "investment company" as defined in the
Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"LEGAL ACTION" has the meaning specified in Section 3.08(g).
"LIQUIDATION DISTRIBUTION" has the meaning set forth in Exhibits B and
C hereto establishing the terms of the Securities.
"LIST OF HOLDERS" has the meaning specified in Section 2.02(a).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of section 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"NASD" has the meaning specified in Section 3.13.
"NASDAQ" has the meaning specified in Section 3.13.
"1933 ACT REGISTRATION STATEMENT" has the meaning specified in
Section 3.13.
"1934 ACT REGISTRATION STATEMENT" has the meaning specified in
Section 3.13.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President or a Vice President, and
by the Treasurer, an Associate Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of the Sponsor, and
delivered to the appropriate Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 2.04 shall be the principal executive,
financial or accounting officer of the Sponsor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
5
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Sponsor, which may be an
employee of the Sponsor but not an employee of the Trust or the Property
Trustee, and who shall be reasonably acceptable to the Property Trustee. Any
Opinion of Counsel pertaining to federal income tax matters may rely on
published rulings of the Internal Revenue Service.
"OPTION CLOSING DATE" means the Option Closing Date as specified in the
Underwriting Agreement.
"ORIGINAL DECLARATION" has the meaning set forth in the first WHEREAS
clause above.
"PAYING AGENT" has the meaning specified in Section 3.10(i).
"PAYMENT AMOUNT" has the meaning specified in Section 6.01.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"POGO" or "SPONSOR" means Pogo Producing Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"PREFERRED SECURITIES GUARANTEE" means the Guarantee Agreement dated as
of [__________, ____] of Pogo and Wilmington Trust Company as initial guarantee
trustee thereunder, in respect of the Preferred Securities.
"PREFERRED SECURITIES" has the meaning specified in Section 7.01(b).
"PREFERRED SECURITY BENEFICIAL OWNER" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
6
"PREFERRED SECURITY CERTIFICATE" means a definitive certificate in
fully registered form representing a Preferred Security substantially in the
form of Annex I to Exhibit B.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.01(c) and having the duties set forth for
the Property Trustee herein.
"PROPERTY ACCOUNT" has the meaning specified in Section 3.10(c)(i).
"QUORUM" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both such Regular Trustees.
"REGULAR TRUSTEE" means any Trustee other than the Property Trustee and
the Delaware Trustee.
"RELATED PARTY" means any direct or indirect wholly owned subsidiary of
Pogo or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of Pogo.
"RESIGNATION REQUEST" has the meaning specified in Section 5.02(d).
"RESPONSIBLE OFFICER" means, when used with respect to the Property
Trustee, any officer within the corporate department of the Property Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Property Trustee
who customarily performs functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such Person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Declaration.
"RULE 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"SPECIAL EVENT" has the meaning set forth in the terms of the
Securities as set forth in section 4 of Exhibits B and C hereto.
"SPONSOR" or "POGO" means Pogo Producing Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"SUCCESSOR DELAWARE TRUSTEE" has the meaning specified in Section
5.02(b)(ii).
"SUCCESSOR ENTITY" has the meaning specified in Section 3.18(b)(i).
7
"SUCCESSOR PROPERTY TRUSTEE" has the meaning specified in Section
5.02(b)(i).
"SUCCESSOR SECURITIES" has the meaning specified in
Section 3.18(b)(i)(B).
"SUPER MAJORITY" has the meaning specified in Section 2.06(a)(ii).
"SUPPLEMENTAL INDENTURE" means the [_____] Supplemental Indenture dated
as of [________, ____] between Pogo and the Debenture Trustee, pursuant to which
the Debentures are to be issued.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of section 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"TREASURY REGULATIONS" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"TRUST" has the meaning set forth in the first WHEREAS clause above.
"TRUSTEE" or "TRUSTEES" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated as of
[__________, ____] among the Trust, the Sponsor and [_______] and [_________],
as representatives of the several underwriters named therein.
8
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law
and/or the rules and regulations of the Commission, shall be the only Trustee
which is a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee unless the Property Trustee is
registrar for the Securities, (i) on each regular record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such record date, PROVIDED THAT neither the Sponsor nor the Regular Trustees
on behalf of the Trust shall be obligated to provide such List of Holders at
any time that the List of Holders does not differ from the most recent List
of Holders given to the Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust, and (ii) at any other time, within 30 days of
receipt by the Trust of a written request for a List of Holders as of a date
no more than 15 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity) PROVIDED THAT the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.02. REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, commencing May 15, [____],
the Property Trustee shall provide to the Holders of the Securities such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form,
in the manner and at the times provided by Section 313 of the Trust
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Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act. A copy of each such report shall, at
the time of such transmission to Holders, be filed by the Property Trustee with
the Company, with each stock exchange upon which any Preferred Securities are
listed (if so listed) and also with the Commission. The Company agrees to notify
the Property Trustee when any Preferred Securities become listed on any stock
exchange and of any delisting thereof.
SECTION 2.04. PERIODIC REPORTS TO THE PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as required
by Section 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act,
any such certificates to be provided in the form, in the manner and at the times
required by Section 314(a)(4) and (c) of the Trust Indenture Act (PROVIDED THAT
any certificate to be provided pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be provided within 120 days of the end of each Fiscal Year).
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration which relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c) may be
given in the form of an Officers' Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, PROVIDED THAT, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at
least the proportion in aggregate liquidation amount of the Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
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such default shall cease to exist, and any Event of Default with respect to
the Preferred Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED THAT, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event of
Default under this Declaration as provided above in Section 2.06(a) or
below in this Section 2.06(b), the Event of Default under this
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under this Declaration as provided
above in Section 2.06(a) or below in this Section 2.06(b), the Event of
Default under this Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount of
the Common Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding;
PROVIDED, FURTHER, that the Holders of Common Securities will be deemed to
have waived any such Event of Default and all Events of Defaults with respect
to the Common Securities and their consequences until all Events of Default
with respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the Holders of the Preferred Securities and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee
in accordance with the terms of the Securities. The foregoing provisions of
this Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
In the event that any Event of Default with respect to the Preferred
Securities is waived by the Holders of Preferred Securities as provided in
this Declaration, the Holders of Common Securities agree that such waiver
shall also constitute the waiver of such Event of Default with respect to the
Common Securities for all purposes under this Declaration without any further
act, vote or consent of the Holders of the Common Securities. Subject to the
foregoing provisions of this Section 2.06(b), upon waiver, any such default
shall cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of
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this Declaration, but no such waiver shall extend to any subsequent or other
default or Event of Default with respect to the Common Securities or impair
any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.06(c) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.07. DISCLOSURE OF INFORMATION.
The disclosure of information as to the names and addresses of the
Holders of the Securities in accordance with Section 312 of the Trust Indenture
Act, regardless of the source from which such information was derived, shall not
be deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act, nor
shall the Property Trustee be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.
ARTICLE 3
ORGANIZATION
SECTION 3.01. NAME.
The Trust continued by this Declaration is named "Pogo Trust I" as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.02. OFFICE.
The address of the principal office of the Trust is c/o Pogo Producing
Company, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. Upon ten days'
written notice to the Holders, the Regular Trustees may change the location of
the Trust's principal office.
SECTION 3.03. ISSUANCE OF THE SECURITIES.
On [__________, ____] the Sponsor, on behalf of the Trust and pursuant
to the Original Declaration, executed and delivered the Underwriting Agreement.
On the Closing Date and contemporaneously with the execution and delivery of
this Declaration, the Regular Trustees, on behalf of the Trust, shall execute
and deliver (i) one or more Global Certificates, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04 for the
benefit of the
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underwriters named in the Underwriting Agreement, in an aggregate amount
of [___________] Preferred Securities having an aggregate liquidation amount of
$[__________], against receipt of the aggregate purchase price of such Preferred
Securities of $[___________], and (ii) to the Sponsor, one or more Common
Securities Certificates, registered in the name of the Sponsor, in an aggregate
amount of [________] Common Securities having an aggregate liquidation amount of
$[____________], against receipt of the aggregate purchase price of such Common
Securities of $[___________]. [In the event and to the extent the overallotment
option granted by the Trust pursuant to the Underwriting Agreement is exercised
by such underwriters, on the Option Closing Date the Regular Trustees, on behalf
of the Trust, shall execute and deliver one or more Global Certificates,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.04 for the benefit of the underwriters named in the
Underwriting Agreement, in an aggregate amount of up to [___________] Preferred
Securities having an aggregate liquidation amount of up to $[___________],
against receipt of the aggregate purchase price of such Preferred Securities of
up to $[____________].]
SECTION 3.04. PURCHASE OF DEBENTURES.
On the Closing Date and contemporaneously with the execution and
delivery of this Declaration, the Regular Trustees, on behalf of the Trust,
shall purchase from the Sponsor with the proceeds received by the Trust from
the sale of the Securities on such date pursuant to Section 3.03, at a
purchase price of 100% of the principal amount thereof, Debentures,
registered in the name of the Property Trustee and having an aggregate
principal amount equal to $[___________], and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver or cause to be delivered to the Sponsor the sum of
$[___________]. [In the event the overallotment option granted by the Trust
with respect to the Preferred Securities pursuant to the Underwriting
Agreement is exercised by the underwriters named therein, on the Option
Closing Date the Regular Trustees, on behalf of the Trust, shall purchase
from the Sponsor with the proceeds received by the Trust from the sale of the
Preferred Securities on such date pursuant to Section 3.03, at a purchase
price of 100% of the principal amount thereof, additional Debentures,
registered in the name of the Property Trustee and having an aggregate
principal amount of up to $[__________], and, in satisfaction of the purchase
price for such Debentures, the Property Trustee, on behalf of the Trust,
shall deliver or cause to be delivered to the Sponsor an amount equal to the
aggregate principal amount of the Debentures being purchased.]
SECTION 3.05. PURPOSE.
The exclusive purposes and functions of the Trust are: (a)(i) to issue
and sell Preferred Securities for cash and use the proceeds of such sales to
acquire from Pogo Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws
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as may be necessary or desirable in connection therewith and the issuance of the
Preferred Securities; and (iii) to issue and sell Common Securities to Pogo for
cash and use the proceeds of such sale to purchase as trust assets an equal
aggregate principal amount of Debentures issued under the Indenture; and (b)
except as otherwise limited herein, to engage in only those other activities
necessary, convenient or incidental thereto, including such other activities
specifically authorized in this Declaration. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, mortgage or pledge any
of its assets or at any time while the Securities are outstanding, otherwise
undertake (or permit to be undertaken) any activity that would result in or
cause the Trust not to be classified for United States Federal income tax
purposes as a grantor trust.
SECTION 3.06. AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.07. TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.10 with respect to the Debentures
and the Property Account or unless otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The
Holders shall not have legal title to any part of the assets of the Trust,
but shall have undivided beneficial interests in the assets of the Trust.
SECTION 3.08. POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, authority and duty
to cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each
case in accordance with this Declaration; PROVIDED, HOWEVER, that the Trust may
issue no more than one series of Preferred Securities and no more than one
series of Common Securities, and, PROVIDED FURTHER, that there shall be no
interests in the Trust other than the Securities and the issuance of Securities
shall be limited to (x) a one-time, simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date [and (y) any subsequent
issuance of Preferred Securities on the Option Closing Date pursuant to an
exercise of the over-allotment option granted to the underwriters in the
Underwriting Agreement];
(b) in connection with the issuance of the Preferred Securities, at
the direction of the Sponsor, to effect or cause to be effected the filings, and
to execute or cause to be executed, the
14
documents, set forth in Section 3.13 and to execute, deliver and perform on
behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale
of the Preferred Securities and the Common Securities; PROVIDED, HOWEVER, that
the Regular Trustees shall cause legal title to all of the Debentures to be
vested in, and the Debentures to be held of record in the name of, the Property
Trustee for the benefit of the Holders of the Preferred Securities and the
Common Securities;
(d) if and to the extent that the Sponsor on behalf of the Trust has
not already done so, to cause the Trust to enter into the Underwriting Agreement
and such other agreements and arrangements as may be necessary or desirable in
connection with the sale of the Preferred Securities to the initial purchasers
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of Section 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices to
Holders of the Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by Section
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities, the Regular Trustees hereby initially
appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of
the Regular Trustee pursuant to the terms of the Securities set forth in
Exhibits B and C hereto;
15
(n) to take all actions which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(o) to take all actions, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their discretion
to be necessary or desirable in carrying out the purposes of the Trust and
the activities of the Trust as set out in this Section 3.08, including, but
not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States Federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures
will be treated as indebtedness of the Sponsor for United States
Federal income tax purposes;
(p) to take all actions necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust, and to comply with any requirements imposed by any taxing authority on
holders of instruments treated as indebtedness for United States Federal income
tax purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule 3a-7) and
Section 317(b) of the Trust Indenture Act, to appoint one or more Paying Agents
in addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all duties and
powers and do all things for and on behalf of the Trust in all matters necessary
or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.08 in a manner which is consistent with the purposes and functions
of the Trust set out in Section 3.05, and the Regular Trustees shall not take
any action which is inconsistent with the purposes and functions of the Trust
set forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none
of the powers or any of the authority of the Property Trustee set forth in
Section 3.10.
The Regular Trustees shall take all actions on behalf of the Trust that
are not specifically required by this Declaration to be taken by any other
Trustee.
16
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.08 shall be reimbursed by the Sponsor.
SECTION 3.09. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than in connection
with the purposes of the Trust or other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the
Debentures but shall promptly distribute from the Property Account all such
proceeds to Holders of Securities pursuant to the terms of this Declaration and
of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever, except as
otherwise expressly provided herein;
(f) issue any securities or other evidences of beneficial ownership of,
or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or exercising
any trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06
of the Indenture, or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the
Debentures, without, in each case, obtaining the prior approval of the
Holders of a Majority in liquidation amount of all outstanding Securities;
(i) revoke any action previously authorized or approved by a vote of
the Holders of Preferred Securities except by subsequent vote of such Holders;
(j) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required, unless in the
case of this clause (j) the Property Trustee shall have received an Opinion of
Counsel experienced in such matters to the effect that such amendment,
modification or termination will not cause more than an insubstantial risk that
for United States Federal income tax purposes the Trust will not be classified
as a grantor trust;
17
(k) take or consent to any action that would result in the placement of
a lien, pledge, charge, mortgage or other encumbrance on any of the Trust
property;
(l) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(m) after the date hereof, enter into any contract or agreement (other
than any depositary agreement or any agreement with any securities exchange or
automated quotation system) that does not expressly provide that the Holders of
Preferred Securities, in their capacities as such, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust, which express provision shall be in substantially
the following form, "The Holders of the Preferred Securities, in their
capacities as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and the parties hereto
hereby agree that the Holders of the Preferred Securities, in their capacities
as such, shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware."
SECTION 3.10. POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Article 5. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or, if the Property Trustee
does not also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
bank account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and on the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred Securities
and Common Securities from the Property Account in accordance with Section
6.01. Funds in the Property Account shall be held uninvested, and without
liability for interest thereon, until disbursed in accordance with this
Declaration. The Property Account shall be an account which is maintained
with a banking institution whose long term unsecured indebtedness is rated by
a "nationally recognized statistical rating organization", as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act, at least
investment grade;
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(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect promptly the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature;
(iii) upon notice of distribution issued by the Regular Trustees
in accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary
or appropriate to effect promptly pursuant to terms of the Securities
the distribution of Debentures to Holders of Securities upon the
election of the Holder of Common Securities to distribute the
Debentures to Holders of Securities and dissolve the Trust; and
(iv) have the legal power to exercise all of the rights, powers
and privileges of a holder of the Debentures under the Indenture and,
if an Event of Default occurs and is continuing, the Property Trustee,
subject to Section 3.10(e), shall for the benefit of the Holders of the
Securities, enforce its rights as holder of the Debentures under the
Indenture, subject to the rights of the Holders of the Preferred
Securities pursuant to the terms of this Declaration, the Business
Trust Act and the Trust Indenture Act.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of the Preferred Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee or to direct the exercise of
any trust or power conferred upon the Property Trustee under this Declaration,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures. If the Property Trustee fails to
enforce its rights under the Debentures, a Holder of Preferred Securities, to
the extent permitted by applicable law, may, after a period of 30 days has
elapsed since such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against the Sponsor to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
Person; PROVIDED FURTHER, that, if an Event of Default has occurred and is
continuing and such event is attributed to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Holder Direct Action") on or
after the respective due date specified in the Debentures. In connection with
such Holder Direct Action, the Sponsor will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Sponsor
to such Holders of Preferred Securities in such Holder Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the Holders of
the Debentures.
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(f) All moneys deposited in the Property Account and all Debentures
held by the Property Trustee for the benefit of the Holders of the Securities
will not be subject to any right, charge, security interest, lien or claim of
any kind in favor of, or for the benefit of the Property Trustee or its agents
or their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence
of a default with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, transmit by mail, first class postage
prepaid, to the holders of the Securities, as their names and addresses
appear upon the register, notice of such defaults with respect to the
Securities known to the Property Trustee, unless such defaults shall have
been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 3.10(g) being hereby defined to be an Indenture
Event of Default, not including any periods of grace provided for in the
Indenture and irrespective of the giving of any notice provided therein);
PROVIDED, THAT, except in the case of default in the payment of the principal
of (or premium, if any) or interest on any of the Debentures, the Property
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers, of the Property Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Securities. The Property Trustee shall not be deemed to have knowledge of any
default, except (i) a default in the payment of principal, premium or
interest on the Debentures or (ii) any default as to which the Property
Trustee shall have received written notice or a Responsible Officer charged
with the administration of this Declaration shall have obtained written
notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and, if the Preferred Securities are not in book entry only
form, the Preferred Securities and, subject to Section 3.08(q), may authorize
one or more Persons (each, a "Paying Agent") to pay Distributions, redemption
payments or liquidation payments on behalf of the Trust with respect to the
Preferred Securities. Any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the Property
Trustee, after consultation with the Regular Trustees, at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee, subject to Section 3.08(q).
(j) The Property Trustee shall give prompt written notice to the
Holders of the Securities of any notice received by it from Pogo of its election
to defer payments of interest on the Debentures by extending the interest
payment period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have
none of the powers or the authority of the Regular Trustees set forth in
Section 3.08.
20
(l) The Property Trustee shall exercise the powers, duties and
rights set forth in this Section 3.10 and Section 3.12 in a manner which is
consistent with the purposes and functions of the Trust set out in Section
3.05, and the Property Trustee shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in
Section 3.05.
SECTION 3.11. DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than
Section 5.01(a)(3), the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration. Except as set
forth in Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of Section 3807(a) of
the Business Trust Act. No implied covenants or obligations shall be read
into this Declaration against the Delaware Trustee.
SECTION 3.12. CERTAIN RIGHTS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration, and no implied covenants shall be read into this
Declaration against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration, and the Property Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied
covenants or obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Property Trustee and conforming to the requirements of this
Declaration; PROVIDED, HOWEVER, that in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property
21
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Property Trustee hereunder or under the Indenture, or exercising any
trust or power conferred upon the Property Trustee under this
Declaration; and
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Declaration or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part
and, if the Trust is excluded from the definition of Investment Company
solely by means of Rule 3a-7, subject to the requirements of Rule 3a-7,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(ii) the Property Trustee (A) may consult with counsel (which may
be counsel to the Sponsor or any of its Affiliates and may include any
of its employees) selected by it in good faith and with due care and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon and in accordance with such advice
and opinion and (B) shall have the right at any time to seek
instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
22
(iv) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have
offered to the Property Trustee security and indemnity satisfactory to
the Property Trustee against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction; PROVIDED THAT nothing
contained in this clause (iv) shall relieve the Property Trustee of the
obligation, upon the occurrence of an Event of Default (which has not
been cured or waived) to exercise such of the rights and powers vested
in it by this Declaration, and to use the same degree of care and skill
in this exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; and
(v) any action taken by the Property Trustee or its agents
hereunder shall bind the Holders of the Securities, and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party shall be
required to inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and provisions of
this Declaration, both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action.
(d) The Property Trustee, in its individual or any other capacity, may
become the owner or pledgee of Preferred Securities and may otherwise deal with
the Sponsor with the same rights it would have if it were not the Property
Trustee.
(e) All moneys received by the Property Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by law. The Property Trustee shall be under no liability for interest
on any moneys received by it hereunder except such as it may agree in writing to
pay thereon.
(f) Whether or not expressly stated, every provision of this
Declaration pertaining to the Property Trustee shall be subject to this Section
3.12.
SECTION 3.13. REGISTRATION STATEMENT AND RELATED MATTERS.
In accordance with the Original Declaration, Pogo, as the sponsor of
the Trust, was authorized (i) to file with the Commission and execute, in
each case on behalf of the Trust, (a) the Registration Statement on Form S-3
(Registration Nos. 333-[_____], 333-[____]-01 and 333-[____]-02) (the "1933
Act Registration Statement") including any pre-effective or post-effective
amendments thereto, relating to the registration under the Securities Act of
the Preferred Securities and (b) if Pogo shall deem it desirable, a
Registration Statement on Form 8-A or other appropriate form (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities
under Section 12 of the Exchange Act; if Pogo shall deem it desirable, to
prepare and file with the New York Stock Exchange or one or more national
securities exchange(s) (each, an "Exchange") or the National Association of
Securities Dealers, Inc. (the "NASD") and execute on behalf of the Trust a
listing application or applications and all other applications, statements,
certificates, agreements and other
23
instruments as shall be necessary or desirable to cause the Preferred Securities
to be listed on any such Exchange or the NASD's Nasdaq National Market
("Nasdaq"); (iii) to file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and all other papers and documents as Pogo, on behalf of the
Trust, may deem necessary or desirable to register the Preferred Securities
under the securities or "Blue Sky" laws of such jurisdictions as Pogo on behalf
of the Trust, may deem necessary or desirable; and (iv) to negotiate the terms
and execute on behalf of the Trust the Underwriting Agreement. In the event that
any filing referred to in clauses (i)-(iii) above is required by the rules and
regulations of the Commission, any Exchange, Nasdaq, the NASD or state
securities or blue sky laws, to be executed on behalf of the Trust by the
Trustees, the Regular Trustees, in their capacities as Trustees of the Trust,
and Pogo are hereby authorized and directed to join in any such filing and to
execute on behalf of the Trust any and all of the foregoing, it being understood
that the Property Trustee and the Delaware Trustee, in their capacities as
Trustees of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, any Exchange, Nasdaq, the NASD or state
securities or blue sky laws. In connection with all of the foregoing, Pogo and
each Trustee, solely in its capacity as Trustee of the Trust, have constituted
and appointed, and hereby confirm the appointment of,
[________________________], [________________________] and
[________________________] and each of them, as his, her or its, as the case may
be, true and lawful attorneys-in-fact, and agents, with full power of
substitution and resubstitution, for Pogo or such Trustee or in Pogo's or such
Trustee's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act Registration
Statement and the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as Pogo
or such Trustee might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
SECTION 3.14. FILING OF AMENDMENTS TO CERTIFICATE OF TRUST.
The Certificate of Trust as filed with the Secretary of State of the
State of Delaware on [_________________, _________] is attached hereto as
Exhibit A. On or after the date of execution of this Declaration, the Trustees
shall cause the filing with the Secretary of State of the State of Delaware of
such amendments, if any, to the Certificate of Trust as the Trustees shall deem
necessary or desirable.
SECTION 3.15. EXECUTION OF DOCUMENTS BY THE REGULAR TRUSTEES.
Except as otherwise required by the Business Trust Act with respect to
the Certificate of Trust or otherwise and except as provided in Sections 7.01(c)
and 9.08, any Regular Trustee, or if there is only one, such Regular Trustee is
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
24
SECTION 3.16. TRUSTEES NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.17. DURATION OF THE TRUST.
The Trust, absent dissolution pursuant to the provisions of Article 8
hereof, shall continue without dissolution until [___________, ____].
SECTION 3.18. MERGERS.
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, except as described in
Section 3.18(b) and (c) of this Declaration.
(b) The Trust may, at the request of the Sponsor, with the consent of
the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders, the Delaware Trustee or the
Property Trustee, merge with or into, convert into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, a trust organized as such under the
laws of any State; PROVIDED THAT:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities and this Declaration; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property
Trustee as the holder of the Debentures;
(iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization in which the
Preferred Securities are then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor
Securities) are rated by any nationally recognized statistical rating
organization prior to such transaction, such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease
does
25
not cause the Preferred Securities (including any Successor
Securities), or if the Debentures are so rated, the Debentures, to be
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect (other
than with respect to any dilution of such Holders' interests in the new
entity);
(vi) such Successor Entity has purposes substantially identical to
those of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor
has received an Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders
(including the holders of any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor the Successor Entity will be required to register as
an Investment Company under the Investment Company Act; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the
Trust (or the Successor Entity) will continue to be classified as
a grantor trust for United States Federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all
of the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Securities Guarantee; and
(ix) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect
that all conditions precedent in this Declaration to such transaction
have been satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, convert into, or be replaced by,
or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other Person or permit any other Person
to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger,
26
conversion, replacement, conveyance, transfer or lease would cause the Trust
or the Successor Entity not to be classified as a grantor trust for United
States Federal income tax purposes or would cause the Holders of the
Securities not to be treated as owning an undivided interest in the
Debentures.
SECTION 3.19. PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or compensation affecting
the Securities or the rights of any Holder thereof to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
27
ARTICLE 4
SPONSOR
SECTION 4.01. PURCHASE OF COMMON SECURITIES BY THE SPONSOR.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities to
be issued on such date are issued, such purchase to be in an amount equal to or
greater than 3% of the total capital of the Trust [(including for this purpose
the maximum amount of Preferred Securities, if any, which may be issued on the
Option Closing Date pursuant to the exercise of the overallotment option set
forth in the Underwriting Agreement)].
SECTION 4.02. EXPENSES.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible
for and shall pay for all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the issuance
of the Preferred Securities to initial purchasers thereof, the fees and expenses
(including reasonable counsel fees and expenses) of the Trustees (including any
amounts payable under Article 10), the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be for
the benefit of, and shall be enforceable by, any Person to whom any such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether
or not such Creditor has received notice hereof. Any such Creditor may
enforce the Sponsor's obligations under this Section 4.02 directly against
the Sponsor and the Sponsor irrevocably waives any right or remedy to require
that any such Creditor take any action against the Trust or any other Person
before proceeding against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to any Creditor by the Sponsor under this Section
4.02.
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ARTICLE 5
TRUSTEES
SECTION 5.01. NUMBER OF TRUSTEES; QUALIFICATIONS.
(a) The number of Trustees initially shall be five (5). At any time
(i) before the issuance of the Securities, the Sponsor may, by written
instrument, increase or decrease the number of, and appoint, remove and
replace, the Trustees, and (ii) after the issuance of the Securities the
number of Trustees may be increased or decreased solely by, and Trustees may
be appointed, removed or replaced solely by, vote of Holders of Common
Securities representing a Majority in liquidation amount of the Common
Securities voting as a class; PROVIDED THAT in any case:
(1) the number of Trustees shall be at least five (5) unless
the Trustee that acts as the Property Trustee also acts as the
Delaware Trustee, in which case the number of Trustees shall be at
least four (4);
(2) at least a majority of the Trustees shall at all times be
officers, directors or employees of Pogo;
(3) if required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be either a natural person who is a
resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of
Delaware and otherwise is permitted to act as a Trustee hereunder
under the laws of the State of Delaware, except that if the
Property Trustee has its principal place of business in the State
of Delaware and otherwise is permitted to act as a Trustee
hereunder under the laws of the State of Delaware, then the
Property Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application; and
(4) there shall at all times be a Property Trustee hereunder
which shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
[-----------------------------]
[-----------------------------]
[-----------------------------]
c/o POGO PRODUCING COMPANY
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
29
(c) There shall at all times be one Trustee which shall act as the
Property Trustee. In order to act as the Property Trustee hereunder, such
Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association organized
and doing business under the laws of the United States of America or
any State or Territory thereof or of the District of Columbia, or a
corporation, national banking association or Person permitted by the
Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation or
national banking association publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 5.01(c)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the extent
Rule 3a-7 requires a trustee having certain qualifications to hold
title to the "eligible assets" (as defined in Rule 3a-7) of the Trust,
the Property Trustee shall possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall
immediately resign in the manner and with the effect set out in Section
5.02(d). If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Property Trustee and the Holders of the Common Securities (as if such
Holders were the obligor referred to in Section 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act. The Preferred Securities Guarantee and the Indenture
shall be deemed to be specifically described in this Declaration for the
purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee is
Wilmington Trust Company, whose address is as set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is
Wilmington Trust Company, whose address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities pursuant to
this Article 5 shall be taken at a meeting of the Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
30
(f) No amendment may be made to this Section 5.01 which would change
any rights with respect to the number, existence or appointment and removal
of Trustees, except with the consent of each Holder of Common Securities.
SECTION 5.02. APPOINTMENT, REMOVAL AND RESIGNATION OF THE TRUSTEES.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as
a class.
(b) (i) The Trustee that acts as the Property Trustee shall not be
removed in accordance with Section 5.02(a) until a Successor Trustee
possessing the qualifications to act as the Property Trustee under Section
5.01(c) (a "Successor Property Trustee") has been appointed and has accepted
such appointment by written instrument executed by such Successor Property
Trustee and delivered to the Regular Trustees, the Sponsor and the Property
Trustee being removed; and
(ii) the Trustee that acts as the Delaware Trustee shall not be
removed in accordance with Section 5.02(a) until a successor Trustee
possessing the qualifications to act as the Delaware Trustee under
Section 5.01(a)(3) (a "Successor Delaware Trustee") has been appointed
and has accepted such appointment by written instrument executed by
such Successor Delaware Trustee and delivered to the Regular Trustees,
the Sponsor and the Delaware Trustee being removed.
(c) A Trustee appointed to office shall hold such office until his
successor shall have been appointed or until his death, removal or resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees, the
Sponsor and the resigning Property Trustee; or
31
(B) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7, until the assets
of the Trust have been completely liquidated and the proceeds
thereof distributed to the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Regular Trustees,
the Sponsor and the resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 5.02 within 60 days after delivery of a notice of removal or a
Resignation Request, the Property Trustee or Delaware Trustee being removed
of resigning as the case may be may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee, as the case may be. Such court may thereupon after
prescribing such notice, if any, as it may deem proper and prescribe, appoint
a Successor Property Trustee or Successor Delaware Trustee, as the case may
be.
SECTION 5.03. VACANCIES AMONG THE TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.01 or if the number of Trustees
is increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with the
requirements of this Article 5.
SECTION 5.04. EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to dissolve, terminate or annul the Trust.
Whenever a vacancy in the number of Regular Trustees shall occur until such
vacancy is filled as provided in this Article 5, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.05. MEETINGS.
Meetings of the Regular Trustees shall be held from time to time upon
the call of any Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees. Notice of
any in-person meeting of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meeting of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before such meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting
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shall constitute a waiver of notice of such meeting except where a Regular
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless otherwise provided in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, PROVIDED THAT a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.
SECTION 5.06. DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any registration statement or amendment
thereto or other document or schedule filed with the Commission or making any
other governmental filing (including, without limitation, the filings referred
to in Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.07. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee or the Delaware Trustee or
any Regular Trustee that is not a natural person, as the case may be, may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee or the Regular Trustees, as the case may be,
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the Property Trustee or the Delaware Trustee or any
Regular Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee or that Regular Trustee, as the case may be,
hereunder, PROVIDED THAT such Person shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
ARTICLE 6
DISTRIBUTIONS
SECTION 6.01. DISTRIBUTIONS.
Holders shall receive periodic distributions, redemption payments and
liquidation distributions in accordance with the applicable terms of the
relevant Holder's Securities as set forth in Exhibits B and C hereto
("Distributions"). If and to the extent that Pogo makes a payment of
33
interest (including Additional Interest and/or Compounded Interest (as defined
in the Indenture)), premium and/or principal on the Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to promptly make a Distribution of the Payment Amount to Holders
in accordance with the terms of the Securities as set forth in Exhibits B and C
hereto. The record dates and payment dates for Distributions shall be the same
as the record dates and payment dates for the Debentures held by the Property
Trustee.
ARTICLE 7
ISSUANCE OF THE SECURITIES
SECTION 7.01. GENERAL PROVISIONS REGARDING THE SECURITIES.
(a) The Regular Trustees shall issue on behalf of the Trust
Securities in fully registered form representing undivided beneficial
interests in the assets of the Trust in accordance with Section 7.01(b) and
for the consideration specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class
of preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") hereto, which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") hereto, which terms are incorporated by
reference in, and made a part of, this Declaration as if specifically set forth
herein. The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by the
Regular Trustees (or if there are more than two Regular Trustees by any two of
the Regular Trustees). Such signatures may be the manual or facsimile signatures
of the present or any future Regular Trustee. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not
affect the validity of any Certificate. In case any Regular Trustee who shall
have signed any of the Certificates shall cease to be such Regular Trustee
before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Certificate, shall be the Regular Trustees, although at the
date of the execution and delivery of this Declaration any such person was not a
Regular Trustee. Certificates shall be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made
34
pursuant thereto or with any rule or regulation of any stock exchange or
automated quotation system on which Securities may be listed or traded, or with
any rule or regulation of the Clearing Agency, or to conform to usage. Pending
the preparation of definitive Certificates, the Regular Trustees on behalf of
the Trust may execute temporary Certificates (printed, lithographed or
typewritten), in substantially the form of the definitive Certificates in lieu
of which they are issued, but with such omissions, insertions and variations as
may be appropriate for temporary Certificates, all as may be determined by the
Regular Trustees. Each temporary Certificate shall be executed by the Regular
Trustees (or, if there are more than two Regular Trustees, by any two of the
Regular Trustees) on behalf of the Trust upon the same conditions and in
substantially the same manner, and with like effect, as definitive Certificates.
Without unnecessary delay, the Regular Trustees on behalf of the Trust will
execute and furnish definitive Certificates and thereupon any or all temporary
Certificates may be surrendered to the transfer agent and registrar in exchange
therefor (without charge to the Holders). Each Preferred Security Certificate
whether in temporary or definitive form shall be countersigned upon receipt of a
written order of the Trust signed by one Regular Trustee, by the manual
signature of an authorized signatory of the Person acting as registrar and
transfer agent for the Preferred Securities, which shall initially be the
Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration,
the Regular Trustees on behalf of the Trust shall return to Pogo the $10
constituting initial trust assets as set forth in the Original Declaration.
[SECTION 7.02. CONVERSION AGENT.
The Trust shall maintain an office or agency where Preferred Securities
may be presented for conversion ("Conversion Agent"). The Trust may appoint the
Conversion Agent and may appoint one or more additional Conversion Agents in
such other locations as it may determine. The term "Conversion Agent" includes
any additional Conversion Agent. The Trust may change any Conversion Agent
without prior notice to any Holders. If the Trust fails to appoint or maintain
another entity as Conversion Agent, the Property Trustee will act as such. The
Trust or any of its Affiliates may act as Conversion Agent. The Conversion Agent
shall be entitled to the rights and protections extended to the Property Trustee
when acting in such capacity.
The Property Trustee is hereby initially appointed as the Conversion
Agent for the Preferred Securities.]
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ARTICLE 8
DISSOLUTION OF THE TRUST
SECTION 8.01. DISSOLUTION OF THE TRUST.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders of the Securities in accordance with the terms
of the Securities; or
(ii) when all of the Debentures shall have been distributed to the
Holders of the Securities in exchange for all of the Securities in
accordance with the terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in
Section 3.17;
(iv) upon a decree of judicial dissolution [; or
(v) upon the distribution of Common Stock to all Securities
Holders upon conversion of all outstanding Securities.]
Upon dissolution and the completion of the winding up of the affairs of the
Trust, the Trust and this Declaration shall terminate when a certificate of
cancellation is filed by the Trustees with the Secretary of State of the State
of Delaware. The Trustees shall so file such a certificate as soon as
practicable after the occurrence of an event referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall
survive the dissolution and termination of the Trust and this Declaration.
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.01. TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
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(c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws). To the fullest extent permitted by law,
any attempted transfer of the Common Securities other than as set forth in
the immediately preceding sentence shall be null and void.
SECTION 9.02. TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges which may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.03. DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
SECTION 9.04. BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Security Certificates, on original issuance [(including Preferred
Securities, if any, issued on the Option Closing Date pursuant to the exercise
of the overallotment option set forth in the Underwriting Agreement)], will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.07. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.07:
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(i) the provisions of this Section 9.04 shall be in full force and
effect;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and, except
as set forth herein in Section 9.07 or in Rule 3a-7 (if the Trust is
excluded from the definition of an Investment Company solely by reason
of Rule 3a-7) with respect to the Property Trustee, shall have no
obligation to the Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.04
conflict with any other provisions of this Declaration, the provisions
of this Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of Distributions
on the Global Certificates to such Clearing Agency Participants,
PROVIDED, THAT solely for the purposes of determining whether the
Holders of the requisite amount of Preferred Securities have voted on
any matter provided for in this Declaration, so long as definitive
Preferred Security Certificates have not been issued (pursuant to
Section 9.07 hereof), the Trustees may conclusively rely on, and shall
be protected in relying on, any written instrument (including a proxy)
delivered to the Trustees by the Clearing Agency setting forth the
Preferred Security Beneficial Owners' votes or assigning the right to
vote on any matter to any other Persons either in whole or in part.
SECTION 9.05. NOTICES TO HOLDERS OF CERTIFICATES.
Whenever a notice or other communication to the Holders is required
to be given under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued pursuant to Section 9.07, the
relevant Trustees shall give all such notices and communications, specified
herein to be given to Holders of Preferred Securities, to the Clearing Agency
and, with respect to any Preferred Security Certificate registered in the
name of a Clearing Agency or the nominee of a Clearing Agency, the Trustees
shall, except in Rule 3a-7 (if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7) with respect to the
Property Trustee, have no notice obligations to the Preferred Security
Beneficial Owners.
SECTION 9.06. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
the Preferred Securities.
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SECTION 9.07. DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (i) a Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.06 or (ii) the Regular Trustees elect
after consultation with the Sponsor to terminate the book entry system
through the Clearing Agency with respect to the Preferred Securities, then
(x) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Preferred
Securities and (y) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause Definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may conclusively rely
on, and shall be protected in relying on, such instructions.
SECTION 9.08. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity
as may be required by them to keep each of them and the Trust harmless, then
in the absence of notice that such Certificate shall have been acquired by a
bona fide purchaser, the Regular Trustees (or if there are more than two
Regular Trustees by any two of the Regular Trustees) on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under
this Section 9.08, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
ARTICLE 10
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.01. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such
39
Indemnified Person's gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
SECTION 10.02. INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
(b) The provisions of this Section 10.02 shall survive the
termination of this Declaration or the resignation or removal of any Trustee.
SECTION 10.03. OUTSIDE BUSINESS.
The Sponsor and any Trustee (in the case of the Property Trustee,
subject to Section 5.01(c)) may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. Neither the Sponsor nor any Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and the Sponsor or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor or may act as
depository for, trustee or agent for,
40
or act on any committee or body of holders of, securities or other obligations
of the Sponsor or any of its Affiliates.
ARTICLE 11
ACCOUNTING
SECTION 11.01. FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.02. CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States Federal income tax purposes.
(b) If required by applicable law, the Regular Trustees shall, as soon
as available after the end of each Fiscal Year of the Trust, cause to be
prepared and mailed to each Holder of Securities unaudited financial statements
of the Trust for such Fiscal Year, prepared in accordance with generally
accepted accounting principles; PROVIDED THAT if the Trust is required to comply
with the periodic reporting requirements of Section 13(a) or 15(d) of the
Exchange Act, such financial statements for such Fiscal Year shall be examined
and reported on by a firm of independent certified public accountants selected
by the Regular Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be duly prepared and mailed to
each Holder of Securities any annual United States Federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States Federal income tax
return, on such form as is required by the Code, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the Trust with
any state or local taxing authority.
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SECTION 11.03. BANKING.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; PROVIDED, HOWEVER, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds from the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; PROVIDED, HOWEVER, that the Property Trustee shall
designate the sole signatories for the Property Account.
SECTION 11.04. WITHHOLDING.
The Trust and the Trustees shall comply with all withholding
requirements under United States Federal, State and local law. The Regular
Trustees shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Regular Trustees to assist them in determining the extent of,
and in fulfilling, the Trust's withholding obligations. The Trust shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount to be withheld was not
withheld from a Distribution, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.01. AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and
only by, a written instrument executed by a majority of the Regular Trustees;
PROVIDED, HOWEVER, that (i) no amendment or modification to this Declaration
shall be made, and any such purported amendment shall be void and
ineffective: (A) unless the Regular Trustees shall have first received: (x)
an Officers' Certificate that such amendment is permitted by, and conforms
to, the terms of this Declaration; and (y) an Opinion of Counsel that such
amendment is permitted by, and conforms to, the terms of this Declaration and
that all conditions precedent, if any, in this Declaration to the execution
and delivery of such amendment have been satisfied; and (B) to the extent the
result of such amendment would be to: (x) cause the Trust to fail to continue
to be classified for purposes of United States Federal income taxation as a
grantor trust; (y) reduce or otherwise adversely affect the rights or powers
of the
42
Property Trustee in contravention of the Trust Indenture Act; or (z) cause
the Trust to be deemed to be an Investment Company required to be registered
under the Investment Company Act; (ii) at such time after the Trust has
issued any Securities which remain outstanding, any amendment which would
adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be
set forth in the terms of such Securities; (iii) Section 4.02, Section
9.01(c) and this Section 12.01 shall not be amended without the consent of
all of the Holders of the Securities; (iv) no amendment which adversely
affects the rights, powers and privileges of the Property Trustee or the
Delaware Trustee shall be made without the consent of the Property Trustee or
the Delaware Trustee, respectively; (v) Article 4 shall not be amended
without the consent of the Sponsor; and (vi) the rights of the Holders of
Common Securities under Article 5 to increase or decrease the number of, and
to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities.
(b) Notwithstanding Section 12.02(a), this Declaration may be
amended without the consent of the Holders of the Securities to (i) cure any
ambiguity, (ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration, (iii) add to the covenants, restrictions or obligations of the
Sponsor, (iv) conform to any changes in Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule 3a-7)
or any change in interpretation or application of Rule 3a-7 (if the Trust is
excluded from the definition of an Investment Company solely by reason of
Rule 3a-7) by the Commission, (v) make any other provisions with respect to
matters or questions arising under this Declaration which shall not be
inconsistent with the other provisions of this Declaration, (vi) modify,
eliminate or add to any provisions of this Declaration to such extent as
shall be necessary to ensure that the Trust will be classified for United
States federal income tax purposes as a grantor trust at all times that any
Securities are outstanding or to ensure that the Trust will not be required
to register as an Investment Company under the Investment Company Act, and
(vii) pursuant to Section 5.02, evidence the acceptance of the appointment of
a successor Trustee or fill a vacancy created by an increase in the number of
Regular Trustees, which amendment does not adversely affect in any material
respect the rights, preferences or privileges of the Holders.
SECTION 12.02. MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT.
(a) Meetings of the Holders of Preferred Securities and/or Common
Securities may be called at any time by the Regular Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which the
Holders of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange or
automated quotation system on which the Preferred Securities are then listed,
traded or quoted. The Regular Trustees shall call a meeting of the Holders of
Preferred Securities or Common Securities, if directed to do so by Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more notices in
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
43
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provision shall apply to meetings of the Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to all the
Holders of Securities having a right to vote thereat not less than
seven (7) days nor more than sixty (60) days prior to the date of such
meeting. Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration or the rules
of any stock exchange or automated quotation system on which the
Preferred Securities are then listed, traded or quoted, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting and without prior notice if a
consent in writing setting forth the action so taken is signed by
Holders of Securities owning not less than the minimum aggregate
liquidation amount of Securities that would be necessary to authorize
or take such action at a meeting at which all Holders of Securities
having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the Holders
of Securities entitled to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot submitted to the
Holders of Securities for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of a Security is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of the Security executing it. Except as otherwise provided
herein or in the terms of the Securities, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act, this
Declaration or the rules of any stock exchange or automated quotation
system on which the Preferred Securities are then listed, traded or
quoted, the Regular Trustees, in their sole discretion, shall establish
all other provisions relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any meeting at which
any matter is to be voted on by any Holders of Securities, waiver of
any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such right to
vote.
44
ARTICLE 13
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 13.01. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE.
The Trustee which acts as the initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as the Property Trustee that:
(i) The Property Trustee is a national banking association or a banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the United States or the laws of the state of its
incorporation, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property Trustee of
this Declaration have been duly authorized by all necessary corporate action on
the part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(iii) The execution, delivery and performance of this Declaration by
the Property Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Property
Trustee is required for the execution, delivery or performance by the Property
Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in
Section 5.01(c).
SECTION 13.02. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE.
The Trustee which acts as the initial Delaware Trustee represents and
warrants to the Trust and the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
the Delaware Trustee, that:
(i) The Delaware Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
with corporate power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration.
45
(ii) The execution, delivery and performance by the Delaware
Trustee of this Declaration have been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration
has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law).
(iii) No consent, approval or authorization of, or registration
with or notice to, any banking authority which supervises or regulates
the Delaware Trustee, if any, is required for the execution, delivery
or performance by the Delaware Trustee of this Declaration.
(iv) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has
its principal place of business in the State of Delaware and is a
Person that satisfies for the Trust Section 3807(a) of the Business
Trust Act.
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Regular
Trustees on behalf of the Trust may give notice of to the Holders of the
Securities):
Pogo Trust I
c/o Pogo Producing Company
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if given to the Property Trustee, at the mailing address of the
Property Trustee set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities):
46
Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if given to the Delaware Trustee, at the mailing address of the
Delaware Trustee set forth below (or such other address as the Delaware Trustee
may give notice of to the Holders of the Securities):
Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
Pogo Producing Company
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee
shall also be sent to the Trust. All notices shall be deemed to have been given,
when received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.02. UNDERTAKING FOR COSTS.
All parties to this Declaration agree, and each Holder of any
Securities by his or her acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Declaration, or in any suit against the Property
Trustee for any action taken or omitted by it as Property Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
47
made by such party litigant; but the provisions of this Section 14.02 shall not
apply to any suit instituted by the Property Trustee, to any suit instituted by
any Holder of Preferred Securities, or group of Holders of Preferred Securities,
holding more than 10% in aggregate liquidation amount of the outstanding
Preferred Securities, or to any suit instituted by any Holder of Preferred
Securities for the enforcement of the payment of the principal of (or premium,
if any) or interest on the Debentures, on or after the respective due dates
expressed in such Debentures.
SECTION 14.03. GOVERNING LAW.
This Declaration, the Securities and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
SECTION 14.04. HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.05. PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.06. COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
pages and this Declaration may be executed by the affixing of the signature of
the Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
SECTION 14.07. INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or partnership but that the Trust be treated as a
grantor trust for United States federal income tax purposes. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.08. SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this
48
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed.
SECTION 14.09. NO RECOURSE.
The Trust's obligations hereunder are intended to be the obligations of
the Trust and no recourse for the payment of Distributions, or for any claim
upon the Securities or otherwise in respect thereof, shall be had against any
Holder of Securities or any Affiliate of a Holder of Securities, solely by
reason of such Person's being a Holder of Securities or an Affiliate of a Holder
of Securities, it being understood that the Holder of Securities, solely by
reason of being a Holder of Securities, has limited liability (in accordance
with the provisions of the Business Trust Act) for the liabilities and
obligations of the Trust. Nothing contained in this Section 14.09 shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Declaration, the Preferred Guarantee and the Indenture, of the rights and
remedies against the Trust or the Sponsor.
49
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
POGO PRODUCING COMPANY,
as Sponsor
By:
--------------------------------
Name:
Title:
-----------------------------------
[Name],
as Regular Trustee
-----------------------------------
[Name],
as Regular Trustee
-----------------------------------
[Name],
as Regular Trustee
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
--------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
--------------------------------
Name:
Title:
50
EXHIBIT A
CERTIFICATE OF TRUST
OF
POGO TRUST I
THIS CERTIFICATE OF TRUST of Pogo Trust I (the "Trust"), dated as of
March 17, 1999, is being duly executed and filed by the undersigned, as
trustees, with the Secretary of State of the State of Delaware to form a
business trust under the Delaware Business Trust Act (12 DEL. CODE Section 3801
ET SEQ.).
1. NAME. The name of the business trust being formed hereby is Pogo
Trust I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are Wilmington
Trust Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective at the
time of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust at the time of filing this Certificate of Trust, have executed this
Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
-----------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
-----------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
as Regular Trustee
By:
-----------------------------------------
A-1
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of
Trust of Pogo Trust I dated as of [____________, ____] (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER.[ _________ (_______)] Preferred Securities
of the Trust with an aggregate liquidation amount at any time outstanding
with respect to the assets of the Trust of [_________________________________]
Dollars ($[___________]) (including up to[__________________________________]
Dollars ($[___________]) issuable upon exercise of the overallotment option
set forth in the Underwriting Agreement), and each with a liquidation amount
with respect to the assets of the Trust of $[______] per Preferred Security,
are hereby designated as "[____]% [Convertible] Preferred Trust Securities,
Series [___]". The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form attached hereto as Annex I,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules of
any stock exchange or automated quotation system on which the Preferred
Securities are then listed, traded or quoted. In connection with the
issuance and sale of the Preferred Securities and the Common Securities, the
Trust will purchase as trust assets Debentures of Pogo having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and the Common Securities so issued and bearing interest at an
annual rate equal to the annual Distribution rate on the Preferred Securities
and the Common Securities and having payment and redemption provisions which
correspond to the payment and redemption provisions of the Preferred
Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Preferred Security
will be fixed at a rate per annum of [____]% (the "Coupon Rate") of the stated
liquidation amount of $[______] per Preferred Security, such rate being the rate
of interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Preferred Securities will accumulate from
[___________], [_____] and will be payable quarterly in arrears, on
[______], [______], [_____] and [_____] of each year, commencing on
[________________, ____], except as otherwise described
below, but only if and to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee. So long as Pogo
shall not be in default in the payment of interest on the Debentures, Pogo
has the right under the Indenture for the Debentures to defer payments of
interest on the Debentures by extending the interest payment period at any
time and from time to time on the Debentures for a period not exceeding 20
consecutive quarterly interest periods (each, an "Extension Period"),
during which Extension Period no interest shall be due and payable on the
Debentures. As a consequence of such deferral, Distributions shall also be
deferred. Despite such deferral, Distributions will continue to accumulate
with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is
then accruing on the Debentures) at the Coupon Rate compounded quarterly
during any such Extension Period; PROVIDED THAT no Extension Period shall
extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Pogo may further extend such
Extension Period; PROVIDED THAT such Extension Period together with all
such previous and further extensions thereof may not exceed 20 consecutive
quarterly interest periods. Upon the termination of any Extension Period
and the payment of all amounts then due, Pogo may commence a new Extension
Period, subject to the above requirements. On the Distribution payment
date at the end of an Extension Period, payments of accumulated
Distributions will be payable to Holders of Preferred Securities as they
appear on the books and records of the Trust (regardless of who the Holders
may have been on other dates during the Extension Period) on the record
date for such Distribution payment date.
(c) Distributions on the Preferred Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the
books and records of the Trust on the relevant record dates. While the
Preferred Securities remain in book-entry only form, the relevant record
dates shall be one business day prior to the relevant Distribution date,
and if the Preferred Securities are no longer in book-entry only form, the
relevant record dates will be the fifteenth (15th) day of the month prior
to the relevant Distribution date, which record and payment dates
correspond to the record and interest payment dates on the Debentures.
Distributions payable on any Preferred Securities that are not punctually
paid on any Distribution payment date as a result of Pogo's having failed
to make the corresponding interest payment on the Debentures will forthwith
cease to be payable to the person in whose name such Preferred Security is
registered on the relevant record date, and such defaulted Distribution
will instead be payable to the person in whose name such Preferred Security
is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date or
other specified date determined in accordance with the Indenture; PROVIDED,
HOWEVER, that Distributions shall not be considered payable on any
Distribution payment date falling within an Extension Period unless Pogo
has elected to make a full or partial payment of interest accrued on the
Debentures on such Distribution payment date. Subject to any applicable
laws and regulations and the provisions of the Declaration, each payment in
respect of the Preferred Securities will be made as described in section 9
hereof. If any date on which Distributions are payable on the Preferred
Securities is not a Business Day, then payment of the Distribution payable
on such date will be made on the next succeeding day that is a Business Day
(and without any interest or other
B-2
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on the date such payment was originally payable.
Notwithstanding anything herein to the contrary, the record dates and
payment dates for Distributions shall be the same as the record dates and
payment dates for the Debentures.
(d) All Distributions paid with respect to the Preferred Securities
and the Common Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and
is continuing, the Preferred Securities shall have a priority over the
Common Securities with respect to Distributions.
[(e) In the event of an election by the Holder to convert its
Preferred Securities through the Conversion Agent into Common Stock
pursuant to the terms of the Preferred Securities as set forth in this
Exhibit B to the Declaration, no payment, allowance or adjustment shall be
made with respect to accumulated and unpaid Distributions on such Preferred
Securities, or be required to be made; PROVIDED, HOWEVER, that if a
Preferred Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and
before the opening of business on the corresponding Distribution date,
then, notwithstanding such conversion, the Distribution payable on such
Distribution date will be paid in cash to the person in whose name the
Preferred Security is registered at the close of business on such record
date, and (other than a Preferred Security or a portion of a Preferred
Security called for redemption on a redemption date occurring after such
record date and on or prior to such Distribution date) when so surrendered
for conversion, the Preferred Security must be accompanied by payment of an
amount equal to the Distribution payable on such Distribution date.]
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money
or property shall be distributed Pro Rata among the Holders of the
Preferred Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution of the Trust, the Holders of the Preferred
Securities and the Common Securities will be entitled to receive Pro Rata solely
out of the assets of the Trust legally available for distribution to Holders of
Preferred Securities and Common Securities after satisfaction of liabilities to
the creditors of the Trust, an amount equal to the aggregate of the stated
liquidation amount of $______ per Preferred Security and Common Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution and after satisfaction of liabilities to the creditors of the Trust,
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities and the Common Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on, such Preferred Securities and the Common Securities,
shall be distributed Pro Rata to the Holders of the Preferred Securities and the
Common Securities in exchange for such Securities.
B-3
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct the
Property Trustee in writing at any time to dissolve the Trust and to distribute
Debentures to Holders in exchange for Securities (which direction is optional
and wholly within the discretion of the Holder of the Common Securities). Upon
the receipt of any such written direction, the Property Trustee shall promptly
(i) distribute Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities and the Common
Securities held by each Holder, which Debentures bear accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on the
Preferred Securities and the Common Securities of such Holder, in exchange for
the Preferred Securities and Common Securities of such Holder and (ii) dissolve
the Trust.
(c) On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Preferred Securities will no longer be deemed to be
outstanding and may be canceled by the Regular Trustees, and (ii) Certificates
representing Preferred Securities will be deemed to represent beneficial
interests in the Debentures having an aggregate principal amount equal to the
stated liquidation amount of, and bearing accrued and unpaid interest equal to
accumulated and unpaid Distributions on, such Preferred Securities until such
Certificates are presented to Pogo or its agent for transfer or reissuance.
(d) If Debentures are distributed to Holders of the Preferred
Securities, Pogo, pursuant to the terms of the Indenture, will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on
such other exchange as the Preferred Securities were listed immediately prior
to the distribution of the Debentures.
4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed
only if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity, upon redemption at any time or from time to time on or
after [_________, ____], the proceeds of such repayment will be promptly
applied to redeem Pro Rata Preferred Securities and Common Securities
having an aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so repaid or redeemed, upon not less than 30 nor
more than 60 days' notice, at a redemption price of $[______] per Preferred
Security and Common Security plus an amount equal to accumulated and unpaid
Distributions thereon to, but excluding, the date of redemption, payable in
cash (the "Redemption Price"). The date of
B-4
any such repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities will be
redeemed as described in section 4(f)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Pogo pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the
Preferred Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, Pogo shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of Default has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price.
"Tax Event" means that the Sponsor and the Regular Trustees shall have
received an Opinion of Counsel experienced in such matters to the effect that on
or after [____________, ____] as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority (including the
enactment of any legislation and the publication of any judicial decision or
regulatory determination), (c) any interpretation or pronouncement by any
legislative body, court, governmental agency or regulatory authority that
provides for a position with respect to such laws or regulations that differs
from the theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after [_________, ____], there is more than an insubstantial risk that (i)
the Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Pogo to the Trust on the Debentures is not,
or within 90 days of the date thereof will not be, deductible by Pogo for United
States Federal income tax purposes.
"Investment Company Event" means that the Sponsor received an Opinion of
Counsel experienced in practice under the Investment Company Act that, as a
result of the occurrence of a
B-5
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in Investment Company Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment Company
which is required to be registered under the Investment Company Act, which
Change in Investment Company Act Law becomes effective on or after [_________,
____].
(d) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been paid
on all Preferred Securities for all quarterly Distribution periods
terminating on or prior to the date of redemption.
(e) [Intentionally omitted.]
(f) (i)Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this section
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed
will be redeemed Pro Rata from each Holder of Preferred Securities, it
being understood that, in respect of Preferred Securities registered
in the name of and held of record by DTC (or successor Clearing
Agency) or any other nominee, the Preferred Securities will be
redeemed from, and the distribution of the proceeds of such redemption
will be made to, DTC (or successor Clearing Agency).
(iii) Subject to section 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this section 4 then (A) while the Preferred
Securities are in book-entry only form, with respect to the Preferred
Securities, by 12:00 noon, New York City time, on the redemption date,
PROVIDED THAT Pogo has paid the Property Trustee, in immediately
available funds, a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Property Trustee
will deposit irrevocably with DTC (or successor Clearing Agency) funds
sufficient to pay the applicable Redemption Price with respect to the
Preferred Securities and will give DTC (or successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price
B-6
to the Holders of the Preferred Securities and (B) if the Preferred
Securities are issued in definitive form, with respect to the
Preferred Securities and PROVIDED THAT Pogo has paid the Property
Trustee, in immediately available funds, a sufficient amount of cash
in connection with the related redemption or maturity of the
Debentures, the Property Trustee will pay the relevant Redemption
Price to the Holders of such Preferred Securities by check mailed to
the address of the relevant Holder appearing on the books and records
of the Trust on the redemption date. If a Redemption/Distribution
Notice shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business on the
redemption date, Distributions will cease to accumulate on the
Preferred Securities called for redemption, such Preferred Securities
will no longer be deemed to be outstanding and all rights of Holders
of such Preferred Securities so called for redemption will cease,
except the right of the Holders of such Preferred Securities to
receive the Redemption Price, but without interest on such Redemption
Price. Neither the Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Preferred
Securities which have been so called for redemption. If any date
fixed for redemption of Preferred Securities is not a Business Day,
then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that,
if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of
Preferred Securities is improperly withheld or refused and not paid
either by the Property Trustee or by Pogo pursuant to the Preferred
Securities Guarantee, Distributions on such Preferred Securities will
continue to accumulate, from the original redemption date to the date
of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to DTC or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates
have been issued or, if Definitive Preferred Security Certificates
have been issued, to the Holders of the Preferred Securities.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States Federal securities laws), Pogo or
any of its Affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
[5. CONVERSION RIGHTS. The Holders of Preferred Securities shall have the
right at any time prior to the close of business on [___________, ____] or, in
the case of Preferred Securities called for redemption, prior to the close of
business on the Business Day prior to the redemption date, at their option, to
cause the Conversion Agent to convert Preferred Securities, on behalf of the
converting Holders, into shares of Common Stock in the manner described herein
on and subject to the following terms and conditions:
B-7
(a) The Preferred Securities will be convertible at the office of the
Conversion Agent maintained for such purpose in the Borough of Manhattan,
The City of New York, into fully paid and nonassessable shares of Common
Stock pursuant to the Holder's direction to the Conversion Agent to
exchange such Preferred Securities for a portion of the Debentures
theretofore held by the Trust on the basis of one Preferred Security per
$[______] principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common
Stock at an initial rate of [__] shares of Common Stock per $[_______]
principal amount of Debentures (which is equivalent to a conversion price
of $[___] per share of Common Stock, subject to certain adjustments set
forth in Sections [_] and [_] of the Supplemental Indenture (as so
adjusted, "Conversion Price")).
(b) In order to convert Preferred Securities into Common Stock, the
Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Preferred Securities on behalf of such
Holder (the "Conversion Request"), together, if the Preferred Securities
are in certificated form, with such Preferred Security Certificates. The
Conversion Request shall (i) set forth the number of Preferred Securities
to be converted and the name or names, if other than the Holder, in which
the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Preferred Securities for a portion of the
Debentures held by the Trust (at the rate of exchange specified in the
preceding paragraph) and (b) to immediately convert such Debentures on
behalf of such Holder into Common Stock, subject to certain adjustments set
forth in the Supplemental Indenture (at the conversion rate specified in
the preceding paragraph). The Conversion Agent shall notify the Trust of
the Holder's election to exchange Preferred Securities for a portion of the
Debentures held by the Trust and the Trust shall, upon receipt of such
notice, deliver to the Conversion Agent the appropriate principal amount of
Debentures for exchange in accordance with this Section. The Conversion
Agent shall thereupon notify the Sponsor of the Holder's election to
convert such Debentures into shares of Common Stock. If a Preferred
Security is surrendered for conversion after the close of business on any
regular record date for payment of a Distribution and before the opening of
business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose name
the Preferred Security is registered at the close of business on such
record date, and (other than a Preferred Security or a portion of a
Preferred Security called for redemption on a redemption date occurring
after such record date and on or prior to such Distribution payment date)
when so surrendered for conversion, the Preferred Security must be
accompanied by payment of an amount equal to the Distribution payable on
such Distribution payment date. Except as provided above, neither the
Trust nor the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any accumulated
and unpaid Distributions accumulated on the Preferred Securities
surrendered for conversion, or on account of any accumulated and unpaid
dividends on the shares of Common Stock issued upon such conversion, and
the delivery of Common Stock upon conversion of the Preferred Securities
shall be deemed to constitute full payment for all accumulated and unpaid
Distributions on the Preferred Securities. Preferred Securities
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shall be deemed to have been converted immediately prior to the close of
business on the day on which a Notice of Conversion relating to such
Preferred Securities is received by the Trust in accordance with the
foregoing provision (the "Conversion Date"). The Person or Persons
entitled to receive Common Stock issuable upon conversion of the
Debentures shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as practicable
on or after the Conversion Date, the Sponsor shall issue and deliver at
the office of the Conversion Agent a certificate or certificates for
the number of full shares of Common Stock issuable upon such
conversion, together with the cash payment, if any, in lieu of any
fraction of any share to the Person or Persons entitled to receive the
same, unless otherwise directed by the Holder in the Notice of
Conversion, and the Conversion Agent shall distribute such certificate
or certificates, together with the applicable cash payment, if any, to
such Person or Persons.
(c) Each Holder of a Preferred Security by his acceptance thereof
appoints Wilmington Trust Company as the "Conversion Agent" for the purpose
of effecting the conversion of Preferred Securities in accordance with this
Section. In effecting the conversion and transactions described in this
Section, the Conversion Agent shall be acting as agent of the Holders of
Preferred Securities directing it to effect such conversion transactions.
The Conversion Agent is hereby authorized (i) to exchange Preferred
Securities from time to time for Debentures held by the Trust in connection
with the conversion of such Preferred Securities in accordance with this
Section and (ii) to convert all or a portion of the Debentures into Common
Stock and thereupon to deliver such shares of Common Stock in accordance
with the provisions of this Section and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result
of conversion, but in lieu thereof, such fractional interest will be paid
by the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Preferred Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Preferred
Securities so converted, or, if such day is not a Trading Day (as defined
in the Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver
upon conversion of Debentures, shares of Common Stock reacquired and held
in the treasury of the Sponsor (in lieu of the issuance of authorized and
unissued shares of Common Stock), so long as any such treasury shares are
free and clear of all liens, charges, security interests or encumbrances.
Any shares of Common Stock issued upon conversion of the Debentures shall
be duly authorized, validly issued and fully paid and nonassessable. The
Trust shall deliver the shares of Common Stock received upon conversion of
the Debentures to the converting Holder of Preferred Securities free and
clear of all liens, charges, security interests and encumbrances, except
for United States withholding taxes. Each of the Sponsor and the
B-9
Trust shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as
may be required by law, and shall comply with all applicable requirements
as to registration or qualification of Common Stock (and all requirements
to list Common Stock issuable upon conversion of Debentures that are at the
time applicable), in order to enable the Sponsor to lawfully issue Common
Stock to the Trust upon conversion of the Debentures and the Trust to
lawfully deliver Common Stock to each Holder of Preferred Securities upon
conversion of the Preferred Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Preferred Securities. The Sponsor shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name
other than that in which the Preferred Securities so converted were
registered, and no such issue or delivery shall be made unless and until
the Person requesting such issue has paid to the Trust the amount of any
such tax, or has established to the satisfaction of the Trust that such tax
has been paid.
(g) Nothing in the preceding paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Preferred Securities or set forth in this Exhibit B to the Declaration or
to the Declaration itself or otherwise require the Property Trustee or the
Trust to pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and
as otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration, other than as
described in Section 12.01(b) of the Declaration or section 3 of Exhibit B,
or otherwise, or (ii) the dissolution, winding-up or termination of the
Trust, other than as described in Section 8.01 of the Declaration, then the
Holders of outstanding Securities will be entitled to vote on such
amendment or proposal as a single class and such amendment or proposal
shall not be effective except with the approval of the Holders of
Securities of at least a Majority in liquidation amount of the Securities,
voting together as a single class; PROVIDED, HOWEVER, that (A) if any
amendment or proposal referred to in clause (i) above would adversely
affect only the Preferred Securities or the Common Securities, then only
the affected class of Securities will be entitled to vote on such amendment
or proposal and such amendment or proposal shall not be effective except
with the approval of at least a Majority in liquidation amount of such
class of Securities and (B) amendments to the Declaration shall be subject
to such further requirements as are set forth in Sections 12.01 and 12.02
of the Declaration.
B-10
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; PROVIDED, HOWEVER, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and PROVIDED, FURTHER, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States Federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee of the Indenture (the "Debenture
Trustee"), or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures,(ii) waive any past default that is
waivable under Section 6.06 of the Indenture or (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of the
principal of the Debentures, without, in each case, obtaining the prior
approval of the Holders of a Majority in liquidation amount of all
outstanding Preferred Securities and Common Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities except by subsequent vote of such
Holders. The Property Trustee shall notify each Holder of Preferred
Securities of any notice of default with respect to the Debentures.
If an Event of Default has occurred and is continuing, then the Holders
of a Majority in liquidation amount of the Preferred Securities will have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Property Trustee or to direct the exercise of any
trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures. If the Property Trustee fails
to enforce its rights under the Debentures, a Holder of Preferred Securities,
to the extent permitted by applicable law, may, after a period of 30 days has
elapsed since such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly against the
Sponsor to enforce the Property Trustee's rights under the Debentures without
first instituting any legal proceeding against the Property Trustee or any
other Person; PROVIDED FURTHER, that, if an Event of Default has occurred and
is continuing and such event is attributed to the failure of the Sponsor to
pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
B-11
the aggregate liquidation amount of the Preferred Securities of such Holder (a
"Holder Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Holder Direct Action, the Sponsor will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Sponsor to such Holders of Preferred Securities in such
Holder Direct Action. Except as provided in the preceding sentences, the
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the Holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Preferred Securities may
be given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Preferred Securities are entitled to vote to be mailed to each
Holder of record of Preferred Securities. Each such notice will include a
statement setting forth (i) the date of such meeting, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or to distribute the
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by Pogo or by any Affiliate of Pogo shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
Holders of the Preferred Securities have no rights to increase or decrease
the number of Trustees or to appoint, remove or replace a Trustee, which voting
rights are vested exclusively in the Holders of the Common Securities.
7. PRO RATA TREATMENT. A reference in these terms of the Preferred
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
B-12
8. RANKING. The Preferred Securities rank PARI PASSU and payment thereon
will be made Pro Rata with the Common Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Preferred Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise rank in priority to the rights of Holders of the Common Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the corporate trust office of the Property
Trustee in The City of New York; PROVIDED THAT payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Preferred Security will be made only upon surrender of such
Preferred Security to the Property Trustee.
10. ACCEPTANCE OF INDENTURE AND PREFERRED SECURITIES GUARANTEE. Each
Holder of Preferred Securities, by the acceptance thereof, agrees to the
provisions of (i) the Preferred Securities Guarantee, including the
subordination provisions therein, and (ii) the Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall have
no preemptive or similar rights to subscribe to any additional Preferred
Securities or Common Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder of Preferred Securities without charge on written request to the
Trust at its principal place of business.
B-13
Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - THIS
PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE
FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND
NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR
ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇) TO POGO TRUST I OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
Certificate Number Number of Preferred Securities: [____________]
[___________]
Aggregate Liquidation Amount: $[____________]
CUSIP NO. [____________]
Certificate Evidencing Preferred Securities
of
Pogo Trust I
[____]% [Convertible] Preferred Trust Securities, Series [___]
(liquidation amount $[______] per Preferred Security)
Pogo Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that [_________] (the
"Holder") is the registered owner of [_____ (______)] preferred securities of
the Trust representing preferred undivided beneficial interests in
B-14
the assets of the Trust and designated the [____]% [Convertible] Preferred Trust
Securities, Series [___] (liquidation amount $[______] per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer.
The designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities are set forth in, and this
Certificate and the Preferred Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Declaration of Trust of the Trust dated as of [___________, ____], as
the same may be amended from time to time (the "Declaration") including the
designation of the terms of Preferred Securities as set forth in Exhibit B
thereto. The Preferred Securities and the Common Securities issued by the Trust
pursuant to the Declaration represent undivided beneficial interests in the
assets of the Trust, including the Debentures (as defined in the Declaration)
issued by Pogo Producing Company, a Delaware corporation ("Pogo"), to the Trust
pursuant to the Indenture referred to in the Declaration. The Holder is
entitled to the benefits of the Guarantee Agreement of Pogo dated as of
[__________, ____] (the "Guarantee") to the extent provided therein. The Trust
will furnish a copy of the Declaration, the Guarantee and the Indenture to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have (i) agreed to the terms of the Indenture and the Debentures, including that
the Debentures are subordinate and junior in right of payment to all Senior Debt
(as defined in the Indenture or Supplemental Indenture thereto) as and to the
extent provided in the Indenture or Supplemental Indenture thereto, and (ii)
agreed to the terms of the Guarantee, including that the Guarantee is
subordinate and junior in right of payment to all other liabilities of Pogo,
including the Debentures, except those made PARI PASSU or subordinate by their
terms, and senior to all capital stock (other than the most senior preferred
stock issued, from time to time, if any, by Pogo, which preferred stock will
rank PARI PASSU with the Guarantee) now or hereafter issued by Pogo and to any
guarantee now or hereafter entered into by Pogo in respect of any of its capital
stock (other than the most senior preferred stock issued, from time to time, if
any, by Pogo).
Upon receipt of this Certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
B-15
IN WITNESS WHEREOF, Trustees of the Trust have executed this Certificate.
POGO TRUST I
By:[____________________], as Regular Trustee
Name:
Title: Regular Trustee
By:[____________________], as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signatory
B-16
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of [___] % (the "Coupon Rate") of the stated liquidation amount of
$[______] per Preferred Security, such rate being the rate of interest payable
on the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one quarter will accumulate additional distributions thereon at
the Coupon Rate per annum (to the extent permitted by applicable law),
compounded quarterly. The term "Distributions" as used herein means such
periodic cash distributions and any such additional distributions payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Trust has funds on hand legally available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
Distributions on the Preferred Securities will accumulate from [_________,
____], and will be payable quarterly in arrears, on [______, ______, ______] and
[______] of each year, commencing on [________, ____], but only if and to the
extent that interest payments are made in respect of the Debentures held by the
Property Trustee. So long as Pogo shall not be in default in the payment of
interest on the Debentures, Pogo has the right under the Indenture for the
Debentures to defer payments of interest on the Debentures by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions
shall also be deferred. Despite such deferral, Distributions will continue to
accumulate with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly during any
such Extension Period; PROVIDED THAT no Extension Period shall extend beyond the
stated maturity of the Debentures. Prior to the termination of any such
Extension Period, Pogo may further extend such Extension Period; PROVIDED THAT
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Extension Period and the payment of all amounts then due,
Pogo may commence a new Extension Period, subject to the above requirements. On
the Distribution payment date at the end of the Extension Period, payments of
accumulated Distributions will be payable to Holders of Preferred Securities as
they appear on the books and records of the Trust (regardless of who the Holders
may have been on other dates during the Extension Period) on the record date for
such Distribution payment date.
The Preferred Securities shall be redeemable as provided in the
Declaration.
[The Preferred Securities shall be convertible into shares of Common Stock
(as defined in the Declaration), through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock, in the manner and according to the terms set
forth in the Declaration.]
B-17
[CONVERSION REQUEST
To: Wilmington Trust Company, as Property Trustee of Pogo Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust, dated as of [______, ____] (as amended from time
to time, the "Declaration"), by [_________, ________] and [__________] as
Regular Trustees, Wilmington Trust Company, as the Delaware Trustee, Wilmington
Trust Company, as the Property Trustee, Pogo Producing Company, as Sponsor, and
by the Holders, from time to time, of undivided beneficial interests in the
assets of the Trust to be issued pursuant to the Declaration) in accordance with
and subject to the terms and conditions of the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Preferred Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by Pogo Trust I (at
the rate of exchange specified in the terms of the Preferred Securities set
forth as Exhibit B to the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned into Common Stock (at the conversion
rate specified in the terms of the Preferred Securities set forth as Exhibit B
to the Declaration, subject to certain adjustments set forth in the Supplemental
Indenture (as that term is defined in the Declaration)).
The undersigned does also hereby direct the Conversion Agent that the
shares of Common Stock issuable and deliverable upon conversion, together with
any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned, unless a different name has been indicated in the
assignment below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto.
B-18
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
_______________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are to
be issued, along with the address or addresses of
such person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:** _________
___________________________
**(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
B-19
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S)
AS WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
B-20
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of
Trust of Pogo Trust I dated as of [____________, ____] (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. [_________ (_______)] Common Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of [ ___________________________________________]
Dollars ($[___________]), and each with a liquidation amount with respect to the
assets of the Trust of $[______] per Common Security, are hereby designated as
"[____]% [Convertible] Common Trust Securities, Series [___]". The Common
Security Certificates evidencing the Common Securities shall be substantially in
the form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
The Common Securities are to be issued and sold to Pogo in consideration of
$[_____________] in cash. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as trust
assets Debentures of Pogo having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Common Security will
be fixed at a rate per annum of [____]% (the "Coupon Rate") of the stated
liquidation amount of $[______] per Common Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Common Securities will accumulate from
[___________, ____] and will be payable quarterly in arrears, on [______,
______, _____] and [_____] of
each year commencing on [________________, ____], except as otherwise
described below, but only if and to the extent that interest payments are
made in respect of the Debentures held by the Property Trustee. So long as
Pogo shall not be in default in the payment of interest on the Debentures,
Pogo has the right under the Indenture for the Debentures to defer payments
of interest on the Debentures by extending the interest payment period at
any time and from time to time on the Debentures for a period not exceeding
20 consecutive quarterly interest periods (each, an "Extension Period"),
during which Extension Period no interest shall be due and payable on the
Debentures. As a consequence of such deferral, Distributions shall also be
deferred. Despite such deferral, Distributions will continue to accumulate
with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is
then accruing on the Debentures) at the Coupon Rate compounded quarterly
during any such Extension Period; PROVIDED THAT no Extension Period shall
extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Pogo may further extend such
Extension Period; PROVIDED THAT such Extension Period together with all
such previous and further extensions thereof may not exceed 20 consecutive
quarterly interest periods. Upon the termination of any Extension Period
and the payment of all amounts then due, Pogo may commence a new Extension
Period, subject to the above requirements. On the Distribution payment
date at the end of the Extension Period, payments of accumulated
Distributions will be payable to Holders of Common Securities as they
appear on the books and records of the Trust (regardless of who the Holders
may have been on other dates during the Extension Period) on the record
date for such Distribution payment date.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the
books and records of the Trust on the relevant record dates. While the
Preferred Securities remain in book-entry only form, the relevant record
dates for the Common Securities shall be one business day prior to the
relevant Distribution date, and if the Preferred Securities are no
longer in book-entry only form, the relevant record dates for the Common
Securities will be the fifteenth (15th) day of the month prior to the
relevant Distribution date, which record and payment dates correspond to
the record and interest payment dates on the Debentures. Distributions
payable on any Common Securities that are not punctually paid on any
Distribution payment date as a result of Pogo's having failed to make
the corresponding interest payment on the Debentures will forthwith
cease to be payable to the person in whose name such Common Security is
registered on the relevant record date, and such defaulted Distribution
will instead be payable to the person in whose name such Common Security
is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date
or other specified date determined in accordance with the Indenture;
PROVIDED, HOWEVER, that Distributions shall not be considered payable on
any Distribution payment date falling within an Extension Period unless
Pogo has elected to make a full or partial payment of interest accrued
on the Debentures on such Distribution payment date. Subject to any
applicable laws and regulations and the provisions of the Declaration,
each payment in respect of the Common Securities will be made as
described in section 9 hereof. If any date on which Distributions are
payable on the Common Securities is not a Business Day, then payment of
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the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on the date such payment was originally payable. Notwithstanding
anything herein to the contrary, the record dates and payment dates for
Distributions shall be the same as the record dates and payment dates for
the Debentures.
(d) All Distributions paid with respect to the Common Securities and
the Preferred Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and
is continuing, the Preferred Securities shall have a priority over the
Common Securities with respect to Distributions.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money
or property shall be distributed Pro Rata among the Holders of the
Preferred Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution of the Trust, the Holders of the Preferred
Securities and the Common Securities will be entitled to receive Pro Rata solely
out of the assets of the Trust legally available for distribution to Holders of
Preferred Securities and Common Securities after satisfaction of liabilities to
the creditors of the Trust, an amount equal to the aggregate of the stated
liquidation amount of $[______] per Preferred Security and Common Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities and the Common Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on, such Preferred Securities and the Common Securities,
shall be distributed Pro Rata to the Holders of the Preferred Securities and the
Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction is
optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee
C-3
shall promptly (i) distribute Debentures in an aggregate principal amount equal
to the aggregate stated liquidation amount of the Preferred Securities and the
Common Securities held by each Holder, which Debentures bear accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on the
Preferred Securities and the Common Securities of such Holder, in exchange for
the Preferred Securities and Common Securities of such Holder and (ii) dissolve
the Trust.
(c) On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Common Securities will no longer be deemed to be
outstanding and may be canceled by the Regular Trustees and (ii) Certificates
representing Common Securities will be deemed to represent beneficial interests
in the Debentures having an aggregate principal amount equal to the stated
liquidation amount of, and bearing accrued and unpaid interest equal to
accumulated and unpaid Distributions on, such Common Securities until such
Certificates are presented to Pogo or its agent for transfer or reissuance.
4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity, upon redemption at any time or from time to time on or
after [_________, ____], the proceeds of such repayment will be promptly
applied to redeem Pro Rata Preferred Securities and Common Securities
having an aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so repaid or redeemed, upon not less than 30 nor
more than 60 days' notice, at a redemption price of $[______] per Preferred
Security and Common Security plus an amount equal to accumulated and unpaid
Distributions thereon to, but excluding, the date of redemption, payable in
cash (the "Redemption Price"). The date of any such repayment or
redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities will be
redeemed as described in section 4(e)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Pogo pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the Common
Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each, a "Special Event") shall occur and be
continuing, Pogo shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at
C-4
the Redemption Price on a Pro Rata basis. The Common Securities will be
redeemed Pro Rata with the Preferred Securities, except that if an Event of
Default has occurred and is continuing, the Preferred Securities will have
a priority over the Common Securities with respect to payment of the
Redemption Price.
"Tax Event" means that the Sponsor and the Regular Trustees shall have
received an Opinion of Counsel experienced in such matters to the effect that on
or after [____________, ____] as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority (including the
enactment of any legislation and the publication of any judicial decision or
regulatory determination), (c) any interpretation or pronouncement that provides
for a position with respect to such laws or regulations that differs from the
theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement by any legislative body, court, governmental agency or regulatory
authority is issued or announced or which action is taken, in each case on or
after [_________, ____], there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Pogo to the Trust on the Debentures is not,
or within 90 days of the date thereof will not be, deductible by Pogo for United
States Federal income tax purposes.
"Investment Company Event" means that the Sponsor and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in Investment Company Act Law"), there is more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in
Investment Company Act Law becomes effective on or after [_________, ____].
(d) The Trust may not redeem fewer than all the outstanding Common
Securities unless all accumulated and unpaid Distributions have been paid
on all Common Securities for all quarterly Distribution periods terminating
on or prior to the date of redemption.
(e) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this section
4(e)(i) a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first
C-5
mailed by first-class mail, postage prepaid, to Holders of Preferred Securities
and Common Securities. Each Redemption/Distribution Notice shall be addressed
to the Holders of Preferred Securities and Common Securities at the address of
each such Holder appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed will be
redeemed Pro Rata from each Holder of Common Securities (subject to
adjustment to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in respect
of a redemption of Common Securities as provided in this section 4 (which
notice will be irrevocable), then immediately prior to the close of
business on the redemption date, PROVIDED THAT Pogo has paid to the
Property Trustee in immediately available funds a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures,
Distributions will cease to accumulate on the Common Securities called for
redemption, such Common Securities will no longer be deemed to be
outstanding and all rights of Holders of such Common Securities so called
for redemption will cease, except the right of the Holders of such Common
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Common Securities
which have been so called for redemption. If any date fixed for redemption
of Common Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of Common
Securities is improperly withheld or refused and not paid by the Property
Trustee, Distributions on such Common Securities will continue to
accumulate, from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to Holders of the Common Securities.
[5. CONVERSION RIGHTS.
The Holders of Common Securities shall have the right at any time prior to
the close of business on [__________, ____] or, in the case of Common Securities
called for redemption, prior to the close of business on the Business Day prior
to the redemption date, at their option, to cause
C-6
the Conversion Agent to convert Common Securities, on behalf of the converting
Holders, into shares of Common Stock in the manner described herein on and
subject to the following terms and conditions:
(a) The Common Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Common Securities for a portion of the Debentures theretofore held by the
Trust on the basis of one Common Security per $[______] principal amount of
Debentures, and immediately convert such amount of Debentures into fully
paid and nonassessable shares of Common Stock at an initial rate of [_]
shares of Common Stock per $[______] principal amount of Debentures (which
is equivalent to a conversion price of $[__] per share of Common Stock,
subject to certain adjustments set forth in Sections [_] and [_] of the
Supplemental Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Common Securities into Common Stock, the
Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Common Securities on behalf of such
Holder (the "Conversion Request"), together, if the Common Securities are
in certificated form, with such Common Security Certificates. The
Conversion Request shall (i) set forth the number of Common Securities to
be converted and the name or names, if other than the Holder, in which the
shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Common Securities for a portion of the
Debentures held by the Trust (at the rate of exchange specified in the
preceding paragraph) and (b) to immediately convert such Debentures on
behalf of such Holder, into Common Stock, subject to certain adjustments
set forth in the Supplemental Indenture (at the conversion rate specified
in the preceding paragraph). The Conversion Agent shall notify the Trust
of the Holder's election to exchange Common Securities for a portion of the
Debentures held by the Trust, and the Trust shall, upon receipt of such
notice, deliver to the Conversion Agent the appropriate principal amount of
Debentures for exchange in accordance with this Section. The Conversion
Agent shall thereupon notify the Sponsor of the Holder's election to
convert such Debentures into shares of Common Stock. If a Common Security
is surrendered for conversion after the close of business on any regular
record date for payment of a Distribution and before the opening of
business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose name
the Common Security is registered at the close of business on such record
date, and (other than a Common Security or a portion of a Common Security
called for redemption on a redemption date occurring after such record date
and on or prior to such Distribution payment date) when so surrendered for
conversion, the Common Security must be accompanied by payment of an amount
equal to the Distribution payable on such Distribution payment date.
Except as provided above, neither the Trust nor the Sponsor will make, or
be required to make, any payment, allowance or adjustment upon any
conversion on account of any accumulated and unpaid Distributions
accumulated on the Common Securities surrendered for conversion, or on
account of any accumulated and unpaid dividends on the shares of Common
Stock issued upon such conversion, and the
C-7
delivery of Common Stock upon conversion of the Common Securities shall be
deemed to constitute full payment for all accumulated and unpaid
Distributions on the Common Securities. Common Securities shall be deemed
to have been converted immediately prior to the close of business on the
day on which a Notice of Conversion relating to such Common Securities is
received by the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive Common Stock
issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such Common Stock at such time.
As promptly as practicable on or after the Conversion Date, the Sponsor
shall issue and deliver at the office of the Conversion Agent a certificate
or certificates for the number of full shares of Common Stock issuable upon
such conversion, together with the cash payment, if any, in lieu of any
fraction of any share to the Person or Persons entitled to receive the
same, unless otherwise directed by the Holder in the Notice of Conversion,
and the Conversion Agent shall distribute such certificate or certificates,
together with the applicable cash payment, if any, to such Person or
Persons.
(c) Each Holder of a Common Security by his acceptance thereof
appoints Wilmington Trust Company as the "Conversion Agent" for the purpose
of effecting the conversion of Common Securities in accordance with this
Section. In effecting the conversion and transactions described in this
Section, the Conversion Agent shall be acting as agent of the Holders of
Common Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Common Securities
from time to time for Debentures held by the Trust in connection with the
conversion of such Common Securities in accordance with this Section and
(ii) to convert all or a portion of the Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result
of conversion, but in lieu thereof, such fractional interest will be paid
by the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Common Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Common Securities
so converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver
upon conversion of Debentures, shares of Common Stock reacquired and held
in the treasury of the Sponsor (in lieu of the issuance of authorized and
unissued shares of Common Stock), so long as any such treasury shares are
free and clear of all liens, charges, security interests or encumbrances.
Any shares of Common Stock issued upon conversion of the Debentures shall
be duly authorized, validly issued and fully paid and nonassessable. The
Trust shall deliver the shares of Common Stock received upon conversion of
the Debentures to the
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converting Holder of Common Securities free and clear of all liens,
charges, security interests and encumbrances, except for United States
withholding taxes. Each of the Sponsor and the Trust shall prepare and
shall use its best efforts to obtain and keep in force such governmental or
regulatory permits or other authorizations as may be required by law, and
shall comply with all applicable requirements as to registration or
qualification of Common Stock (and all requirements to list Common Stock
issuable upon conversion of Debentures that are at the time applicable), in
order to enable the Sponsor to lawfully issue Common Stock to the Trust
upon conversion of the Debentures and the Trust to lawfully deliver Common
Stock to each Holder of Common Securities upon conversion of the
Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Common Securities. The Sponsor shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name
other than that in which the Common Securities so converted were
registered, and no such issue or delivery shall be made unless and until
the Person requesting such issue has paid to the Trust the amount of any
such tax, or has established to the satisfaction of the Trust that such tax
has been paid.
(g) Nothing in the preceding section 5(f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Common
Securities or set forth in this Exhibit C to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust
to pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under section 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment,
removal or replacement to be approved by Holders of Common Securities
representing a Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration, other than as described in Section 12.01(b) of the
Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than as described in Section 8.01 of the Declaration or section
3 of this Exhibit C, then the Holders of outstanding Securities will be entitled
to vote on such amendment or proposal as a single class and such amendment or
proposal shall not be effective except with the approval of the Holders of
Securities of at least a Majority in liquidation amount of the Securities,
voting together as a single class; PROVIDED, HOWEVER, that (A) if any amendment
or proposal referred to in clause (i) above would adversely affect only the
Preferred Securities or the Common Securities, then only the affected class of
Securities will be entitled to vote on such amendment or proposal and
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such amendment or proposal shall not be effective except with the approval of at
least a Majority in liquidation amount of such class of Securities, (B) the
rights of Holders of Common Securities under Section 5.02 of the Declaration to
increase or decrease the number of, and to appoint, replace or remove, Trustees
shall not be amended without the consent of each Holder of Common Securities,
and (C) amendments to the Declaration shall be subject to such further
requirements as are set forth in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; PROVIDED, HOWEVER, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and PROVIDED, FURTHER, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States Federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures,(ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Common Securities and Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures.
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived by the Holders of
Preferred Securities as provided in the Declaration or otherwise eliminated, and
until all Events of Default with respect to the Preferred Securities have been
so cured, waived by the Holders of Preferred Securities or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms
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of the Declaration or of the Securities. In the event that any Event of Default
with respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote to be mailed to each Holder of
record of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Common Securities will be required for
the Trust to redeem and cancel Common Securities or to distribute the Debentures
in accordance with the Declaration.
7. PRO RATA TREATMENT. A reference in these terms of the Common
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Common Securities rank PARI PASSU and payment thereon
will be made Pro Rata with the Preferred Securities, except that when an Event
of Default occurs and is continuing, the rights of Holders of Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise are subordinate to the rights of Holders of the Preferred
Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of a like aggregate
liquidation amount, at the principal corporate trust office of the Property
Trustee in [__________________]; PROVIDED THAT payment of Distributions may be
made
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at the option of the Regular Trustees on behalf of the Trust by check mailed to
the address of the persons entitled thereto and that the payment on redemption
of any Common Security will be made only upon surrender of such Common Security
to the Property Trustee. Notwithstanding the foregoing, transfers of Common
Securities are subject to conditions set forth in Section 9.01(c) of the
Declaration.
10. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have no
preemptive or similar rights to subscribe to any additional Common Securities or
Preferred Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder of Common Securities without charge on written request to the Trust
at its principal place of business.
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Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
________ __________
Certificate Evidencing Common Securities
of
Pogo Trust I
[____]% [Convertible] Common Trust Securities, Series [___]
(liquidation amount $[______] per Common Security)
Pogo Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of ____________________________ (_________)
common securities of the Trust representing common undivided beneficial
interests in the assets of the Trust and designated the "[____]% [Convertible]
Common Trust Securities, Series [___]" (liquidation amount $[______] per Common
Security) (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this Certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below) including, without limitation, Section 9.01(c) thereof. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this Certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of [__________, ____], as the same may be amended
from time to time (the "Declaration") including the designation of the terms of
Common Securities as set forth in Exhibit C thereto. The Common Securities and
the Preferred Securities issued by the Trust pursuant to the Declaration
represent undivided beneficial interests in the assets of the Trust, including
the Debentures (as defined in the Declaration) issued by Pogo Producing Company,
a Delaware corporation ("Pogo"), to the Trust pursuant to the Indenture referred
to in the Declaration. The Trust will furnish a copy of the Declaration and the
Indenture
C-13
to the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have agreed to the terms of the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right of payment to all Senior Debt (as
defined in the Indenture or the Supplemental Indenture) as and to the extent
provided in the Indenture or the Supplemental Indenture.
Upon receipt of this Certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
Certificate this ___ day of _____________, ____.
POGO TRUST I
By________________________, as Regular Trustee
Name:
Title: Regular Trustee
By_________________________, as Regular Trustee
Name:
Title: Regular Trustee
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of [___]% (the "Coupon Rate") of the stated liquidation amount of
$[______] per Common Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in arrears for
more than one calendar quarter will accumulate additional distributions thereon
at the Coupon Rate per annum (to the extent permitted by applicable law)
compounded quarterly. The term "Distributions" as used herein means such
periodic cash distributions and any such additional distributions payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Trust has funds on hand legally available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
Distributions on the Common Securities will accumulate from [_________,
____] and will be payable quarterly in arrears, on [_____________, ____________,
_____________] and [_____________] of each year, commencing on [________, ____],
but only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as Pogo shall not be in
default in the payment of interest on the Debentures, Pogo has the right under
the Indenture for the Debentures to defer payments of interest on the Debentures
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures. As a consequence of such deferral,
Distributions shall also be deferred. Despite such deferral, Distributions will
continue to accumulate with additional distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
quarterly during any such Extension Period; PROVIDED THAT no Extension Period
shall extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Pogo may further extend such Extension
Period; PROVIDED THAT such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarterly interest
periods. Upon the termination of any Extension Period and the payment of all
amounts then due, Pogo may commence a new Extension Period, subject to the above
requirements. On the Distribution payment date at the end of the Extension
Period, payments of accumulated Distributions will be payable to Holders of
Common Securities as they appear on the books and records of the Trust
(regardless of who the Holders may have been on other dates during the Extension
Period) on the record date for such Distribution payment date.
The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock
(as defined in the Declaration), through (i) the exchange of Common Securities
for a portion of the Debentures and (ii) the immediate conversion of such
Debentures into Common Stock, in the manner and according to the terms set forth
in the Declaration.]
C-15
[CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of Pogo Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust dated as of [____________, ____] (as amended from
time to time, the "Declaration"), by [__________, __________] and
_____________, as Regular Trustees, Wilmington Trust Company, as the Delaware
Trustee, Wilmington Trust Company, as the Property Trustee, Pogo Producing
Company, as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to the
Declaration) in accordance with and subject to the terms and conditions of the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by Pogo Trust I (at the rate of exchange specified in the terms of the
Common Securities set forth as Exhibit C to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Exhibit C to the Declaration), subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares of Common Stock issuable and deliverable upon conversion, together with
any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned, unless a different name has been indicated in the
assignment below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto.
Date: _____________, _____
in whole ___ in part ___
Number of Common Securities to be converted:
_______________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are to
be issued, along with the address or addresses of
such person or persons:
__________________________________
__________________________________
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__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:* __________________
____________________
*(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
C-17
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
C-18