EXHIBIT 4(f)
No. HE-1 $31,546,400
HAWAIIAN ELECTRIC COMPANY, INC.
8.05% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES 1997
Hawaiian Electric Company, Inc., a Hawaii corporation (the "Company",
which term includes any successor corporation under the Junior Indenture
hereinafter referred to), for value received, hereby promises to pay to The Bank
of New York, as Property Trustee (the "Property Trustee") for, and for the
benefit of, HECO Capital Trust I (the "Trust") or registered assigns, the
principal sum of Thirty-One Million Five Hundred Forty-Six Thousand Four Hundred
Dollars ($31,546,400) on March 27, 2027, or on such other date which may be
established by the Company in accordance with the terms of said Junior Indenture
but which may not, in any event, be a date earlier than March 27, 2002 or a date
later than March 27, 2046, and to pay interest on said principal sum from March
27, 1997 or from the most recent Interest Payment Date (as defined below) to
which interest has been paid or duly provided for, quarterly in arrears on March
31, June 30, September 30 and December 31, commencing June 30, 1997 (each, an
"Interest Payment Date"), at the rate of 8.05% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and (to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months, and for any period shorter than a full
calendar month, interest will be computed on the basis of the actual number of
days elapsed in such period. In the event that any Interest Payment Date is not
a Business Day, then interest will be payable 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
(without any reduction in interest or other payment in respect of such early
payment), in each case with the same force and effect as if made on the date
such payment was originally payable. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Junior Indenture, be paid to the Person in whose name this
Debenture is registered at the close of business on the Regular Record Date for
such interest installment, as more fully provided in the Junior Indenture. Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may
be paid to the Person in whose name this Debenture is registered at the close of
business on a Special Record Date to be fixed by the Trustee (as defined below)
for the payment of such defaulted interest, notice whereof shall be given to the
Holders of the Series 1997 Debentures not less than 7 calendar days prior to
such Special Record Date, as more fully provided in the Junior Indenture.
Payment of the principal of and interest on this Debenture will be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. If this
Debenture is not held by a depository or the Property Trustee, payment of any
interest on this Debenture (other than on the Stated Maturity or Redemption
Date) shall be made at the office of the Trustee in the City of New York or at
the office of such Paying Agent or Paying Agents as the Company may designate
from time to time, except that at the option of the Company payment of any
interest may be made (i) by check mailed to the address of the person entitled
thereto as such address shall appear in the Securities Register or (ii) by
transfer to an account maintained by the person entitled thereto as specified in
the Securities Register, provided that proper and timely written transfer
instructions have been received by the Regular Record Date; provided, however,
that at the request of a Holder of at least $10,000,000 aggregate principal
amount of Series 1997 Debentures, interest on such Debentures will be payable by
wire transfer within the continental United States in immediately available
funds to the bank account number specified in writing by such Holder to the
Registrar prior to the Regular Record Date.
If this Debenture is not held by a depository or the Property Trustee,
the principal amount hereof, any premium and any interest due on the Stated
Maturity Date or a Redemption Date (other than an Interest Payment Date) will be
paid only upon surrender of this Debenture at the principal corporate office of
The Bank of New York, Paying Agent, in New York, New York, or at such other
office or agency of the Paying Agent as the Company shall designate by written
notice to the Holder of this Debenture.
As long as this Debenture is held by the Property Trustee or if this
Debenture is held by a depository, any payments of principal of and premium, if
any, and interest on this Debenture will be made pursuant to the terms of the
Junior Indenture.
2
The indebtedness evidenced by this Debenture is, to the extent
provided in the Junior Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness, and this Debenture is
issued subject to the provisions of the Junior Indenture with respect thereto.
The Holder of this Debenture, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. The Holder of this Debenture,
by his acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Junior Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Series 1997 Debentures"),
specified in the Junior Indenture, limited in aggregate principal amount to
$31,546,400, except if the Debenture Exchange has occurred, the aggregate
principal amount may not exceed $51,546,400, issued under and pursuant to a
Junior Indenture dated as of March 1, 1997 (the "Junior Indenture") executed and
delivered between the Company and The Bank of New York, as trustee (the
"Trustee"). The Series 1997 Debentures are initially being issued to the Trust,
to be held on behalf of the Trust by its property trustee (the "Property
Trustee"). Concurrently with the issuance of the Series 1997 Debentures, the
Trust is issuing its trust securities, representing common and preferred
undivided beneficial interests in the assets of the Trust and having an
aggregate liquidation preference equal to the aggregate principal amount of the
Series 1997 Debentures and of the Subsidiary Debentures issued by Hawaii
Electric Light Company, Inc. ("HELCO") and Maui Electric Company, Limited
("MECO"), including the Trust's 8.05% Cumulative Quarterly Income Preferred
Securities, Series 1997 (the "Trust Preferred Securities"). By the terms of the
Junior Indenture, Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the Junior
Indenture provided. Reference is made to the Junior Indenture for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and Holders of the Debentures. Each term
used in this Debenture which is defined in the Junior Indenture and not defined
herein shall have the meaning assigned to it in the Junior Indenture.
3
At the option of the Company, the Series 1997 Debentures are
redeemable prior to maturity (i) at any time on or after March 27, 2002, in
whole or in part, and (ii) if a Special Event shall occur and be continuing, in
whole (but not in part), in each case at 100% of the principal amount thereof
plus accrued and unpaid interest to the Redemption Date. A "Special Event"
shall mean either a "Tax Event" or an "Investment Company Event." A "Tax Event"
shall mean that the Company or the Trust shall have received an opinion of
counsel (which may be regular counsel to the Company or an Affiliate, but not an
employee thereof and which must be acceptable to the Property Trustee of the
Trust), rendered by a law firm having a recognized federal and state tax and
securities practice, to the effect that, as a result of a Tax Action, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date of said opinion, subject to United States federal income tax with
respect to income received or accrued on the Debentures, (ii) interest payable
by the Company to the Trust on the 1997 Series Debentures or by MECO or HELCO to
the Trust on its Subsidiary Debentures is not, or within 90 days of the date of
said opinion will not be, deductible by such company, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of said opinion, subject to more than a de minimis
amount of other taxes, duties, or other governmental charges. A "Tax Action"
includes (a) any amendment to or change (including any announced prospective
change) in the laws (or any regulations thereunder) of the United States, or of
any State or the District of Columbia, or of any political subdivision or taxing
authority thereof or therein, (b) any administrative pronouncement or action
that represents an official position (including a clarification of an official
position) of the governmental authority or regulatory body making such
administrative pronouncement or taking such action or (c) any judicial decision
interpreting, clarifying or applying such laws or regulations, in each case that
occurs or becomes effective on or after the date of original issuance of the
Trust Preferred Securities. An "Investment Company Event" shall mean the receipt
by the Company or the Trust of an opinion of counsel, rendered by a law firm
having a recognized federal securities practice, to the effect that, as a result
of the occurrence of a change in law or regulation or a change (including a
prospective change) in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or
will be considered an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended, which Change in 1940 Act
Law becomes
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effective on or after the date of original issuance of the Trust Preferred
Securities.
At least 30 days but not more than 60 days before the Redemption Date,
the Trustee shall mail or caused to be mailed a notice of redemption by first-
class mail, postage prepaid, to each Holder of Series 1997 Debentures to be
redeemed.
The Series 1997 Debentures shall not be subject to any sinking fund.
Series 1997 Debentures in denominations larger than $25 may be redeemed in part
but only in integral multiples of $25.
In the event of redemption of this Debenture in part only, a new
Series 1997 Debenture or Debentures for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Series 1997 Debentures
occurs and is continuing, the principal of and interest on the Series 1997
Debentures may (and, in certain circumstances, shall) be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Junior Indenture.
The Junior Indenture contains provisions for defeasance within one
year of the Stated Maturity of the entire indebtedness of this Debenture upon
compliance by the Company with certain conditions set forth therein.
Subject to certain exceptions in the Junior Indenture which require
the consent of every Holder, the Company and the Trustee may amend the Junior
Indenture or may waive future compliance by the Company with any provisions of
the Junior Indenture, with the consent of the Holders of at least a majority in
aggregate principal amount of the Series 1997 Debentures if affected thereby,
provided that if the Series 1997 Debentures are held by the Trust, no such
amendment or waiver that adversely affects the holders of the Trust Preferred
Securities shall be effective without the prior consent of the holders of at
least a majority in aggregate liquidation preference of the outstanding Trust
Preferred Securities. Subject to certain exceptions in the Junior Indenture,
without the consent of any Debentureholder, the Company and the Trustee may
amend the Junior Indenture to cure any ambiguity, defect or inconsistency, to
bind a successor to the obligations of the Junior Indenture, to provide for
uncertificated Debentures in addition to certificated Debentures, or to comply
with any requirements of the
5
Debentures and the Securities and Exchange Commission in connection with the
qualification of the Junior Indenture under the TIA, provided that any such
action does not adversely affect the rights of any Debentureholder and, in the
case of Series 1997 Debentures held by the Trust, the rights of any holder of
Trust Preferred Securities. Amendments bind all Holders and subsequent Holders.
No reference herein to the Junior Indenture and no provision of this
Debenture or the Junior Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as no Event of Default with respect to the Series 1997
Debentures has occurred and is continuing, the Company shall have the right at
any time and from time to time to extend the interest payment period of the
Series 1997 Debentures for up to 20 consecutive quarters (the "Extension
Period"), provided that no Extension Period shall extend beyond the Stated
Maturity Date or Redemption Date of any Series 1997 Debenture. At the end of
the Extension Period, the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Series 1997
Debentures, compounded quarterly, to the extent that payment of such interest is
enforceable under applicable law). During such Extension Period and during any
Extension Period with respect to the Subsidiary Debentures, subject to certain
exceptions contained in the Junior Indenture, the Company may not, either
directly or indirectly through a subsidiary, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to any of its Capital Stock, (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any of its debt
securities (including other Debentures) that rank pari passu with or junior in
interest to the Series 1997 Debentures, or (iii) make any guarantee payments
with respect to any guarantee issued by the Company if such guarantee ranks pari
passu with or junior in interest to the Series 1997 Debentures. Prior to the
termination of any such Extension Period, the Company may further extend such
Extension Period, provided that such Extension Period, together with all such
previous and further extensions, shall not exceed 20 consecutive quarters and
shall not extend beyond the Stated Maturity Date or Redemption Date of any
Series 1997 Debenture. At the termination of any such Extension Period and upon
the payment of all amounts then due, the Company may elect to begin a new
Extension Period, subject to the foregoing restrictions.
6
Series 1997 Debentures are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Junior Indenture and subject to certain limitations therein set forth,
this Debenture is exchangeable for a like aggregate principal amount of Series
1997 Debentures of a different authorized denomination, as requested by the
Holder surrendering the same.
As provided in the Junior Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the Holder hereof upon
surrender of this Debenture for registration of transfer at the office or agency
of the Registrar accompanied by a written instrument or instruments of transfer
in form satisfactory to the Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Series 1997
Debentures of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Paying Agent and any Registrar may deem and treat
the Holder hereof as the absolute owner hereof (whether or not this Debenture
shall be overdue and notwithstanding any notice of ownership or writing hereon
made by anyone other than the Registrar) for the purpose of receiving payment of
or on account of the principal hereof and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any Paying Agent nor any
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Junior Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
This Debenture shall not be valid until an authorized signatory of the
Trustee manually signs and dates the Trustee's Certificate of Authentication
below.
7
This Debenture will be governed by and construed under the internal
laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
manually or by facsimile by its duly authorized officers and its corporate seal
or a facsimile thereof to be affixed hereto or imprinted hereon.
HAWAIIAN ELECTRIC COMPANY, INC.
(SEAL) By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇
Financial Vice President
and Treasurer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Assistant Treasurer
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THIS IS ONE OF THE DEBENTURES, OF THE SERIES
DESIGNATED, REFERRED TO IN THE WITHIN-MENTIONED JUNIOR
INDENTURE.
THE BANK OF NEW YORK, as Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Authorized Signatory
Dated: March 27, 1997
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8
ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or (we) assign
and transfer this Debenture to:
_______________________________________________________________
(Insert assignee's social security or tax I.D. number)
_______________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________ agent to transfer this Debenture on
the books of the Securities Register. The agent may substitute another to act
for him.
Dated: __________________ Signature: ______________________
(Sign exactly as your name appears on the other
side of this Debenture)
Signature Guaranty: ____________________