EXHIBIT 4.3
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NUEVO ENERGY COMPANY
To
Wilmington Trust Company
Trustee
________________
FIRST SUPPLEMENTAL SUBORDINATED INDENTURE
________________
Dated as of December 23, 1996
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS.................................................. 2
SECTION 1.1. DEFINITION OF TERMS........................................ 2
ARTICLE II. GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES.. 4
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT........................... 4
SECTION 2.2. MATURITY................................................... 4
SECTION 2.3. FORM AND PAYMENT........................................... 4
SECTION 2.4. GLOBAL DEBENTURE........................................... 4
SECTION 2.5. INTEREST................................................... 5
SECTION 2.6. ENFORCEMENT RIGHTS......................................... 6
ARTICLE III. REDEMPTION OF THE CONVERTIBLE DEBENTURES................... 7
SECTION 3.1. SPECIAL EVENT REDEMPTION................................... 7
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY............................. 7
SECTION 3.3. NO SINKING FUND............................................ 8
ARTICLE IV. EXTENSION OF INTEREST PAYMENT PERIOD........................ 8
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD....................... 8
SECTION 4.2. NOTICE OF EXTENSION........................................ 9
SECTION 4.3. LIMITATION OF TRANSACTION.................................. 10
ARTICLE V. EXPENSES..................................................... 10
SECTION 5.1. PAYMENT OF EXPENSES........................................ 10
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL........................ 11
ARTICLE VI. COVENANT TO LIST ON EXCHANGE................................ 11
SECTION 6.1. LISTING ON AN EXCHANGE..................................... 11
ARTICLE VII. CONVERSION OF CONVERTIBLE DEBENTURES....................... 11
SECTION 7.1. CONVERSION RIGHTS.......................................... 11
SECTION 7.2. CONVERSION PROCEDURES...................................... 12
SECTION 7.3. CONVERSION PRICE........................................... 13
SECTION 7.4. ADJUSTMENT OF CONVERSION PRICE............................. 20
SECTION 7.5. NOTICE OF CERTAIN EVENTS................................... 23
SECTION 7.6. COMPANY TO PROVIDE STOCK................................... 24
SECTION 7.7 EMPLOYEE BENEFIT PLANS....................................... 25
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS.................................. 25
SECTION 7.9. PREFERRED STOCK PURCHASE RIGHTS............................ 26
ARTICLE VIII. FORM OF CONVERTIBLE DEBENTURE............................. 27
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE.............................. 27
ARTICLE IX. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES.................... 36
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES................... 36
ARTICLE X. MISCELLANEOUS................................................ 37
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL INDENTURE... 37
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS...................... 37
SECTION 10.3. GOVERNING LAW............................................. 37
SECTION 10.4. SEPARABILITY............................................... 37
SECTION 10.5. COUNTERPARTS.............................................. 37
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FIRST SUPPLEMENTAL INDENTURE, dated as of December 23, 1996 (the "First
Supplemental Indenture"), between Nuevo Energy Company, a Delaware corporation
(the "Company"), and Wilmington Trust Company, as trustee (the "Trustee") under
the Subordinated Indenture dated as of November 25, 1996 between the Company and
the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Company's unsecured subordinated debt
securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered as provided in the
Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 5.75% Convertible Subordinated Debentures due December 15, 2026 (the
"Convertible Debentures"), the form and substance of such Convertible Debentures
and the terms, provisions and conditions thereof to be set forth as provided in
the Indenture and this First Supplemental Indenture;
WHEREAS, Nuevo Financing I, a Delaware statutory business trust (the
"Trust"), has offered to the public $100,000,000 aggregate liquidation amount
($115,000,000 if the Underwriters' over-allotment option is exercised in full)
of its $2.875 Term Convertible Securities, Series A (the "Trust Preferred
Securities"), representing undivided beneficial interests in the assets of the
Trust and proposes to invest the proceeds from such offering, together with the
proceeds of the issuance and sale by the Trust to the Company of $3,092,780
aggregate liquidation amount ($3,556,700 if the Underwriters' over-allotment
option is exercised in full) of its Common Securities, in $103,092,780 aggregate
principal amount of the Convertible Debentures ($118,556,700 if the
Underwriters' over-allotment option is exercised in full); and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Convertible Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Convertible Debentures by the Holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Convertible
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS.
For all purposes of the First Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms which are defined in the Indenture have the same meanings
when used in this First Supplemental Indenture;
(b) the terms defined in this Article have the meaning assigned to them in
this Article and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust Indenture
Act, whether directly or by reference therein, have the meanings assigned to
them therein;
(d) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States of America, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect to
any computation required or permitted hereunder shall mean such accounting
principles, consistently applied, that are set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States of America which are effective on the date of the Indenture;
(e) a reference to a Section or Article is to a Section or Article of this
First Supplemental Indenture;
(f) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this First Supplemental Indenture as a whole and not to
any particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not affect
interpretation; and
(h) the following terms have the meanings given to them in the
Declaration:
(i) Business Day;
(ii) Clearing Agency;
(iii) Trust Preferred Security Certificate;
(iv) Delaware Trustee;
(v) Dissolution Tax Opinion;
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(vi) Distribution;
(vii) DTC;
(viii) Institutional Trustee:
(ix) Investment Company Event;
(x) No Recognition Opinion;
(xi) Redemption Tax Opinion;
(xii) Regular Trustees;
(xiii) Special Event;
(xiv) Tax Event; and
(xv) Underwriting Agreement.
"Additional Interest" shall have the meaning set forth in Section 2.5.
"Compounded Interest" shall have the meaning specified in Section 4.1.
"Declaration" means the Amended and Restated Declaration of Trust of Nuevo
Financing I, a Delaware statutory business trust, dated as of December [], 1996.
"Deferred Interest" has the meaning specified in Section 4.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Convertible Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"Extended Interest Payment Period" has the meaning specified in Section
4.1.
"Global Debenture" has the meaning specified in Section 2.4.
"Maturity Date" means the date on which the Convertible Debentures mature
and on which the principal shall be due and payable together with all accrued
and unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"Non Book-Entry Trust Preferred Securities" has the meaning set forth in
Section 2.4.
"Optional Redemption Price" has the meaning specified in Section 3.2.
"Trading Day" shall mean a day on which any securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price.
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"Trust Preferred Securities" has the meaning specified in the recitals to
this First Supplemental Indenture.
ARTICLE II.
GENERAL TERMS AND CONDITIONS OF
THE CONVERTIBLE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized a series of Securities designated the "5.75%
Convertible Subordinated Debentures due December 15, 2026," limited in aggregate
principal amount to $103,092,780 (except for such additional principal amounts,
not to exceed $15,463,920, of Convertible Debentures issued to cover over-
allotments in the initial public offering of Convertible Debentures) which
amount shall be as set forth in any written order of the Company for the
authentication and delivery of Convertible Debentures pursuant to Section 303 of
the Indenture.
SECTION 2.2. MATURITY.
The Maturity Date is December 15, 2026.
SECTION 2.3. FORM AND PAYMENT.
Except as provided in Section 2.4, the Convertible Debentures shall be
issued in fully registered certificated form without coupons in denominations of
$50 in principal amount and integral multiples thereof. Principal and interest
on the Convertible Debentures issued in certificated form will be payable, the
transfer of such Convertible Debentures will be registrable and such Convertible
Debentures will be exchangeable for Convertible Debentures of other authorized
denominations of a like aggregate principal amount at the office or agency of
the Trustee; provided, however, that payment of interest may be made at the
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option of the Company by check mailed to the Holder at such address as shall
appear in the Security Register or by wire transfer to an account appropriately
identified by the Holder. Notwithstanding the foregoing, so long as the Holder
of any Convertible Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Convertible Debentures held by the Institutional
Trustee will be made at such place and to such account as may be designated by
the Institutional Trustee.
SECTION 2.4. GLOBAL DEBENTURE.
(a) In connection with a Dissolution Event,
(i) the Convertible Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee in exchange for a
global Debenture in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Convertible Debentures (a "Global
Debenture"), to be registered in the name of DTC, or its nominee, and
delivered by the Trustee to DTC (or its custodian) for crediting to the
accounts of its participants pursuant to the instructions of the Regular
Trustees. The Company upon any such presentation
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shall execute a Global Debenture in such aggregate principal amount and
deliver the same to the Trustee for authentication and delivery in
accordance with the Indenture and this First Supplemental Indenture.
Payments on the Convertible Debentures issued as a Global Debenture will be
made to DTC or its nominee; and
(ii) if any Trust Preferred Securities are held in non book-entry
certificated form, any Trust Preferred Security Certificate which
represents Trust Preferred Securities other than Trust Preferred Securities
held by the Clearing Agency or its nominee ("Non Book-Entry Trust Preferred
Securities") will be deemed to represent beneficial interests in
Convertible Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Trust Preferred
Securities until such Trust Preferred Security Certificates are presented
to the Security Registrar for transfer or reissuance at which time such
Trust Preferred Security Certificates will be cancelled and a Debenture,
registered in the name of the holder of the Trust Preferred Security
Certificate or the transferee of the holder of such Trust Preferred
Security Certificate, as the case may be, with an aggregate principal
amount equal to the aggregate liquidation amount of the Trust Preferred
Security Certificate cancelled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance with
the Indenture and this First Supplemental Indenture. On issue of such
Convertible Debentures, Convertible Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been cancelled.
(b) A Global Debenture may be transferred, in whole but not in part, only
to another nominee of DTC or to DTC by its nominee, or to a successor depositary
selected or approved by the Company or to a nominee of such successor
depositary.
SECTION 2.5. INTEREST.
(a) Each Convertible Debenture will bear interest at the rate of 5.75% per
annum (the "Coupon Rate") from December 23, 1996 until the principal thereof
becomes 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 Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 15, June
15, September 15 and December 15 of each year (each, an "Interest Payment
Date"), commencing on March 15, 1997, to the Person in whose name such
Convertible Debenture or any predecessor Convertible Debenture is registered, at
the close of business on the Regular Record Date for such interest installment,
which, in respect of (i) Convertible Debentures of which the Institutional
Trustee is the Holder and the related Trust Preferred Securities are in book-
entry only form or (ii) a Global Debenture, shall be the close of business on
the Business Day next preceding that Interest Payment Date; provided, that if
the Interest Payment Date is a Redemption Date, then the record date for the
interest payment shall be as of the opening of business on such day for the
purpose of permitting the Holder of a Convertible Debenture to convert on such
record date while continuing to be the record holder for the interest payment
and therefore entitled to receive the interest payment on the Interest Payment
Date notwithstanding conversion on the record date. Notwithstanding the
foregoing sentence, if (i) the Convertible Debentures are held by the
Institutional Trustee and the Trust Preferred Securities are no longer in book-
entry only form or (ii) the Convertible Debentures are not represented by a
Global Debenture, the Company may
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select a Regular Record Date for such interest installment which shall be any
date at least one Business Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed per 30-day month. In the event that
any date on which interest is payable on the Convertible Debentures is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which 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, then such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(c) If, at any time while the Institutional Trustee is the Holder of any
Convertible Debentures, the Trust or the Institutional Trustee is required to
pay any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as additional interest
("Additional Interest") on the Convertible Debentures held by the Institutional
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Institutional Trustee after paying
such taxes, duties, assessments or other governmental charges will be equal to
the amounts the Trust and the Institutional Trustee would have received had no
such taxes, duties, assessments or other governmental charges been imposed.
SECTION 2.6. ENFORCEMENT RIGHTS.
The holders of a majority in liquidation amount of the Trust Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or exercising any trust or power conferred upon the Institutional Trustee under
the Declaration, including the right to direct the Institutional Trustee to
exercise the remedies available to it as a Holder of the Convertible Debentures.
If the Institutional Trustee fails to enforce its rights under the Convertible
Debentures, a holder of Trust Preferred Securities, to the extent permitted by
law, may institute a legal proceeding directly against the Company to enforce
the Institutional Trustee's rights under the Convertible Debentures without
first instituting any legal proceeding against the Institutional Trustee or any
other Person or entity. Notwithstanding the foregoing, if a Declaration Event
of Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Convertible
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then the registered holder of
the Trust Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
Convertible Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder (a "Direct
Action") on or after the respective due date specified in the Convertible
Debentures. In connection with such Direct Action, the Company shall remain
obligated to pay the principal or interest on such Convertible Debentures, and
the Company shall be subrogated to the rights of such holder of Trust Preferred
Securities under the Declaration to the extent of any payment made by the
Company to such holder of Trust Preferred Securities in such Direct Action. The
holders of Trust Preferred
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Securities will not be able to exercise any other remedy available to the
holders of the Convertible Debentures.
ARTICLE III.
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. SPECIAL EVENT REDEMPTION.
If a Special Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion;
or
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees shall
have been informed by tax counsel rendering the Dissolution Tax Opinion that a
No Recognition Opinion cannot be delivered to the Trust, then, notwithstanding
Section 3.2(a) but subject to Section 3.2(b), the Company shall have the right
upon not less than 30 days nor more than 60 days notice to the Holders of the
Convertible Debentures to redeem the Convertible Debentures, in whole or in
part, for cash within 90 days following the occurrence of such Tax Event (the
"90-Day Period") at a redemption price equal to 100% of the principal amount to
be redeemed plus any accrued and unpaid interest thereon to the date of such
redemption (the "Redemption Price"), provided that if at the time there is
available to the Company or the Trust the opportunity to eliminate, within the
90-Day Period, the Tax Event by taking some ministerial action ("Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure which has no adverse effect on the Company, the Trust
or the Holders of the Trust Securities issued by the Trust, the Company shall
pursue such Ministerial Action in lieu of redemption, and, provided, further,
that the Company shall have no right to redeem the Convertible Debentures while
the Trust is pursuing any Ministerial Action pursuant to its obligations under
the Declaration. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price prior to 10:00 a.m., New York time, on
the Redemption Date.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Section 3.2(b) and to the provisions of
Article Eleven of the Indenture, except as otherwise may be specified in Section
3.1 or elsewhere in this First Supplemental Indenture, the Company shall have
the right to redeem the Convertible Debentures, in whole or in part, from time
to time, on or after December 15, 1999. Any redemption pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice
to the Holders of the Convertible Debentures, at the following prices (expressed
as percentages of the principal amount of the Convertible Debentures) (the
"Optional Redemption Price") together with accrued and unpaid interest,
including Compounded and Additional Interest to, but excluding, the Redemption
Date, if redeemed during the 12-month period beginning December 15:
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Year Redemption Price
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1999.......................... 104.026%
2000.......................... 103.450%
2001.......................... 102.876%
2002.......................... 102.300%
2003.......................... 101.726%
2004.......................... 101.150%
2005.......................... 100.576%
and 100% if redeemed on or after December 15, 2006.
If Convertible Debentures are redeemed on any March 15, June 15, September
15, or December 15, accrued and unpaid interest shall be payable to Holders of
record on the relevant record date.
So long as the corresponding Trust Preferred Securities are outstanding,
the proceeds from the redemption of the Convertible Debentures will be used to
redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Convertible Debentures so redeemed.
If the Convertible Debentures are only partially redeemed pursuant to this
Section 3.2, the Convertible Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee. The Optional Redemption Price
shall be paid prior to 12:00 noon, New York time, on the Redemption Date or at
such earlier time as the Company determines; provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional Redemption
Price by 10:00 a.m., New York time, on the date such Optional Redemption Price
is to be paid.
(b) If a partial redemption of the Convertible Debentures would result in
the delisting of the Trust Preferred Securities issued by the Trust from any
national securities exchange or other organization on which the Trust Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Convertible Debentures in whole.
SECTION 3.3. NO SINKING FUND.
The Convertible Debentures are not entitled to the benefit of any sinking
fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.
So long as an Event of Default under Section 501(1) of the Indenture shall
not have occurred and be continuing, the Company shall have the right, at any
time and from time to time during the term of the Convertible Debentures, to
defer payments of interest by extending the interest payment period of such
Convertible Debentures for a period not exceeding 20 consecutive quarters (the
"Extended Interest Payment Period"), during which Extended Interest Payment
Period no interest shall be due and payable; provided that no Extended Interest
Payment Period may extend beyond the Maturity Date or any earlier
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Redemption Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all accrued and unpaid interest on the
Convertible Debentures, including any Additional Interest and Compounded
Interest (together, "Deferred Interest") that shall be payable to the Holders
of the Convertible Debentures in whose names the Convertible Debentures are
registered in the Security Register on the first record date after the end of
the Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further extend such period, provided
that such period together with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters, or extend beyond the Maturity Date or
any earlier Redemption Date of the Convertible Debentures. Upon the termination
of any Extended Interest Payment Period and upon the payment of all Deferred
Interest then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof,
but the Company may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Institutional Trustee is the only registered Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to the Regular Trustees,
the Institutional Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by the
Trust are payable, or (ii) the date the Trust is required to give notice of the
record date, or the date such Distributions are payable, to the New York Stock
Exchange (or other applicable self-regulatory organization) or to holders of the
Trust Preferred Securities issued by the Trust, but in any event at least one
Business Day before such record date.
(b) If the Institutional Trustee is not the only Holder of the Convertible
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Convertible Debentures and the Trustee
written notice of its selection of such Extended Interest Payment Period at
least 10 Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give notice of the
record or payment date of such interest payment to the New York Stock Exchange
or other applicable self-regulatory organization or to Holders of the
Convertible Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs (a) or
(b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in
the maximum Extended Interest Payment Period permitted under Section 4.1.
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SECTION 4.3. LIMITATION OF TRANSACTIONS.
If the Company shall exercise its right to defer payment of interest as
provided in Section 4.1, then (i) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (A) purchases or acquisitions of shares of its common stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans, (B) as a result of a reclassification of its capital
stock or the exchange or conversion of one class or series of its capital stock
for another class or series of its capital stock or (C) the purchase of
fractional interests in shares of its capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (ii) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company which rank pari passu with or junior to the Convertible Debentures
and (iii) the Company shall not make any guarantee payment with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee).
ARTICLE V.
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the Convertible
Debentures to the Institutional Trustee and in connection with the sale of the
Trust Securities by the Trust, the Company, in its capacity as borrower with
respect to the Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Convertible Debentures and the sale of the Trust
Securities, including commissions to the underwriters payable pursuant to
the Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 607 of the
Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the fees and expenses of the Institutional Trustee and the Delaware
Trustee, 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 acquisition, financing, and disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by the
Institutional Trustee of the rights of the holders of the Trust Preferred
Securities;
(d) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
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(e) 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.
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL.
Upon termination of this First Supplemental Indenture or the Indenture or
the removal or resignation of the Trustee pursuant to Section 610 of the
Indenture, the Company shall pay to the Trustee all amounts accrued to the date
of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section 5.07 of the
Declaration, the Company shall pay to the Delaware Trustee or the Institutional
Trustee, and their respective counsel, as the case may be, all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE VI.
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. LISTING ON AN EXCHANGE.
If the Convertible Debentures are to be distributed to the holders of the
Trust Preferred Securities issued by the Trust upon a Dissolution Event, the
Company will use its best efforts to list such Convertible Debentures on the New
York Stock Exchange, Inc. or on such other exchange as the Trust Preferred
Securities are then listed.
ARTICLE VII.
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article VII, the
Convertible Debentures are convertible, at the option of the Holder, at any time
through the close of business on December 15, 2026 (or, in the case of
Convertible Debentures called for redemption, prior to the close of business on
the Business Day prior to the corresponding redemption date) into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
rate of 0.8421 shares of Common Stock for each $50 in aggregate principal amount
of Convertible Debentures (equal to a conversion price (as adjusted from time to
time, the "Conversion Price") of $59.375 per share of Common Stock), subject to
adjustment as described in this Article VII. A Holder of Convertible Debentures
may convert any portion of the principal amount of the Convertible Debentures
into that number of fully paid and nonassessable shares of Common Stock obtained
by dividing the principal amount of the Convertible Debentures to be converted
by the Conversion Price in effect at the close of business on the Conversion
Date. All calculations under this Article VII shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be.
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SECTION 7.2. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Convertible Debentures,
the Holder thereof shall deliver to the Conversion Agent an irrevocable Notice
of Conversion setting forth the principal amount of Convertible Debentures to be
converted, together with the name or names, if other than the Holder, in which
the shares of Common Stock should be issued upon conversion and, if such
Convertible Debentures are definitive Convertible Debentures, surrender to the
Conversion Agent the Convertible Debentures to be converted, duly endorsed or
assigned to the Company or in blank. In addition, a holder of Trust Preferred
Securities may exercise its right under the Declaration to convert such Trust
Preferred Securities into Common Stock by delivering to the Conversion Agent an
irrevocable Notice of Conversion setting forth the information called for by the
preceding sentence and directing the Conversion Agent (i) to exchange such Trust
Preferred Security for a portion of the Convertible Debentures held by the Trust
(at an exchange rate of $50 principal amount of Convertible Debentures for each
Trust Preferred Security) and (ii) to immediately convert such Convertible
Debentures, on behalf of such holder, into Common Stock of the Company pursuant
to this Article VII and, if such Trust Preferred Securities are in definitive
form, surrendering such Trust Preferred Securities, duly endorsed or assigned to
the Company or in blank. So long as any Trust Preferred Securities are
outstanding, the Trust shall not convert any Convertible Debentures except
pursuant to a Notice of Conversion delivered to the Conversion Agent by a holder
of Trust Preferred Securities.
If a Trust 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 Convertible
Debenture is registered at the close of business on such record date, and (other
than a Convertible Debenture or a portion of a Convertible Debenture 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
Convertible Debenture must be accompanied by payment of an amount equal to the
Distribution payable on such Distribution payment date. Except as otherwise
provided in the immediately preceding sentence, in the case of any Convertible
Debenture which is converted, interest whose Maturity Date is after the date of
conversion of such Convertible Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Convertible
Debentures being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date") by the Conversion Agent from the Holder or from a holder of
the Trust Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Notice of
Conversion, 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. The Conversion Agent shall deliver such certificate or
certificates to such Person or Persons.
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(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Convertible Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Convertible Debentures so converted and any unpaid interest
(including Compounded Interest) accrued on such Convertible Debentures at the
time of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Convertible Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a Trading Day, on the next Trading Day, and the Conversion Agent in turn will
make such payment, if any, to the Holder of the Convertible Debentures or the
holder of the Trust Preferred Securities so converted.
(d) In the event of the conversion of any Convertible Debenture in part
only, a new Convertible Debenture or Convertible Debentures for the unconverted
portion thereof will be issued in the name of the Holder thereof upon the
cancellation thereof in accordance with Section 1402 of the Indenture.
(e) In effecting the conversion transactions described in this Section
7.2, the Conversion Agent is acting as agent of the holders of Trust Preferred
Securities (in the exchange of Trust Preferred Securities for Convertible
Debentures) and as agent of the Holders of Convertible Debentures (in the
conversion of Convertible Debentures into Common Stock), as the case may be.
The Conversion Agent is hereby authorized (i) to exchange Convertible Debentures
held by the Trust from time to time for Trust Preferred Securities in connection
with the conversion of such Trust Preferred Securities in accordance with this
Article VII and (ii) to convert all or a portion of the Convertible Debentures
into Common Stock and thereupon to deliver such shares of Common Stock in
accordance with the provisions of this Article VII and to deliver to the Trust a
new Convertible Debenture or Convertible Debentures for any resulting
unconverted principal amount.
SECTION 7.3. CONVERSION PRICE ADJUSTMENTS.
(a) The Conversion Price shall be adjusted from time to time as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on Common Stock in shares of Common Stock, then the Conversion
Price in effect at the opening of business on the day following the date
fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator of which shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (i),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the
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treasury of the Company (except to the extent such dividend or distribution
is being made with respect to such shares) but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock.
(ii) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller amount of shares of Common
Stock, then the Conversion Price in effect at the opening of business on
the day following the day upon which such combination becomes effective
shall be proportionately increased, such reduction or increase, as the case
may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination
becomes effective.
(iii) In case the Company shall issue rights or warrants to all
holders of Common Stock entitling them (for a period expiring within 45
days after the record date fixed for a distribution of such rights or
warrants) to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price (as hereinafter defined) per
share (determined as provided in subparagraph (vii) below) of Common Stock
on the date fixed for the determination of shareholders entitled to receive
such rights or warrants (other than pursuant to a dividend reinvestment
plan), then the Conversion Price in effect at the opening of business on
the day following the date fixed for such determination shall be reduced by
multiplying such Conversion Price by a fraction the numerator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase
would purchase at such Current Market Price and the denominator shall be
the number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subparagraph (iii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock. The Company agrees not to
issue any rights or warrants in respect of shares of Common Stock held in
the treasury of the Company. To the extent that shares of Common Stock are
not delivered after the expiration or redemption by the Company of such
rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made in
respect of the issuance of such rights or warrants been made on the basis
of delivery of only the number of shares of Common Stock actually
delivered.
(iv) Subject to the second sentence of this subparagraph (iv), in
case the Company shall, by dividend or otherwise, distribute to all holders
of Common Stock (A) shares of capital stock of the Company (other than
Common Stock), (B) evidence of indebtedness of the Company and/or (C) other
assets (including securities, but excluding (1) any rights or warrants
referred to in subparagraph (iii)
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above, (2) any rights or warrants to obtain capital stock of a company
other than the Company or any subsidiary of the Company (including any
rights offerings of the Company with respect to capital stock of companies
in which the Company has an investment (a "Rights Offering")), (3)
dividends or distributions in connection with the liquidation, dissolution
or winding-up of the Company, (4) dividends payable solely in cash that may
from time to time be fixed by the Board of Directors of the Company and (5)
dividends or distributions referred to in subparagraph (i) above), then in
each case (unless the Company makes the election referred to in the next
sentence) the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on such record date by a
fraction the numerator of which shall be the Current Market Price per share
(determined as provided in subparagraph (vii) below) of the Common Stock on
such record date (the "Reference Date") less the then fair market value on
the Reference Date (as determined in good faith by the Board of Directors
of the Company, whose determination shall be conclusive and shall be
described in a statement filed with the Depositary and the Trustee) of the
portion of the shares of capital stock of the Company, evidences of
indebtedness or other assets so distributed (and for which an adjustment to
the Conversion Price has not been made previously pursuant to the terms of
this Article VII) applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening
of business on the day following the Reference Date. However, the Company
may elect, in its sole discretion, in lieu of the foregoing adjustment, to
make adequate provision so that each holder of Securities shall have the
right to receive upon conversion thereof the amount and kind of shares of
capital stock, evidences of indebtedness or other assets such holder would
have received had such holder converted such shares on such record date. If
the Board of Directors of the Company determines the fair market value of
any distribution for purposes of this subparagraph (iv) by reference to the
actual or when issued trading market for any securities (including shares
of capital stock or evidence of indebtedness of the Company) comprising a
distribution of securities, it must in doing so consider the price in such
market over the period used in computing the Current Market Price of the
Common Stock. For purposes of this subparagraph (iv), any dividend or
distribution that includes both (x) any of the items described in clauses
(A), (B) or (C) of the first sentence of this subparagraph (iv) and (y)
Common Stock or rights or warrants to subscribe for or purchase Common
Stock of the type referred to in subparagraph (iii) shall be deemed to be
(1) a dividend or distribution of shares of capital stock of the Company
(other than Common Stock), evidences of indebtedness of the Company or
other assets of the type referred to in clause (C) of the first sentence of
this subparagraph (iv) (making any Conversion Price reduction required by
this subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such Common Stock or rights or warrants to purchase Common
Stock of the type referred to in subparagraph (iii) (making any further
Conversion Price reduction required by subparagraph (i) or (iii) of this
Section 7.3(a)), except (A) the Reference Date of such dividend or
distribution as defined in this subparagraph (iv) shall be substituted as
"the date fixed for the determination of shareholders entitled to receive
such rights or warrants" and "the date fixed for such determination" within
the meaning of subparagraphs (i) and (iii) of this Section 7.3(a) and (B)
any shares of Common Stock included in such dividend or distribution shall
not be deemed "outstanding at the close of business on the date fixed for
such
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determination" within the meaning of subparagraph (i) of this Section
7.3(a). The occurrence of a distribution or the occurrence of any other
event as a result of which holders of Convertible Debentures converting
such notes into Common Stock hereunder will not be entitled to receive
rights issued pursuant to any shareholder protective rights agreement now
or hereafter in effect (the "Other Rights") in the same amount and manner
as if such holders had converted such shares immediately prior to the
occurrence of such distribution or other event shall be deemed a
distribution of Other Rights for the purposes of conversion adjustments
pursuant to this subparagraph (iv). In lieu of making any adjustment to the
Conversion Price under this subparagraph (iv) as a result of such a
distribution of Other Rights, the Company may elect, in its sole
discretion, to provide that Other Rights shall be issuable in the same
amount and manner upon conversion of the Convertible Debentures without
regard to whether the shares of Common Stock issuable upon conversion of
the Convertible Debentures were issued before or after such distribution or
other event.
(v) In case the Company shall, by dividend or otherwise, at any
time distribute cash to all holders of Common Stock, excluding (A) any cash
dividends on Common Stock to the extent that the aggregate cash dividends
per share of Common Stock in any consecutive 12-month period do not exceed
the greater of (x) the amount per share of Common Stock of the cash
dividends paid on the Common Stock in the immediately preceding 12-month
period, to the extent that such dividends for the immediately preceding 12-
month period did not require an adjustment to the Conversion Price pursuant
to this subparagraph (v) (as adjusted to reflect subdivisions or
combinations of the Common Stock) and (y) 15% of the average of the daily
Closing Prices (as hereinafter defined) of the Common Stock for the ten
consecutive Trading Days immediately prior to the date of declaration of
such dividend and (B) any dividend or distribution in connection with the
liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary, or any redemption of the Rights or Other Rights; provided,
however, that no adjustment shall be made pursuant to this subparagraph (v)
if such distribution would otherwise constitute a Fundamental Change (as
hereinafter defined) and be reflected in a resulting adjustment to the
Conversion Price as provided in this Article VII) then, in each case
(unless the Company makes the election referred to in the proviso following
this clause), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect at
the close of business on such record date by a fraction the numerator of
which shall be the Closing Price of a share of Common Stock on such record
date less the amount of cash so distributed (to the extent not excluded as
provided above) applicable to one share of Common Stock, and the
denominator shall be the Closing Price of a share of Common Stock, such
reduction to become effective immediately prior to the opening of business
on the day following such record date; provided, however, that the Company
may elect, in its sole discretion, in lieu of the foregoing adjustment, to
make adequate provision so that each holder of Securities shall thereafter
have the right to receive upon conversion the amount of cash such holder
would have received had such holder converted each Security on such record
date. If any adjustment is required to be made as set forth in this
subparagraph (v) as a result of a distribution which is a dividend
described in clause (A) of this subparagraph (v), such adjustment will be
based upon the amount by which such distribution exceeds the amount of the
dividend permitted to be excluded pursuant to such clause (A) of this
subparagraph (v). If an adjustment is
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required to be made pursuant to this subparagraph (v) as a result of a
distribution which is not such a dividend, such adjustment would be based
upon the full amount of such distribution.
(vi) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Company or any subsidiary
of the Company for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination
shall be conclusive and shall be described in a resolution of such Board)
of any other consideration included in such payment per share of Common
Stock at the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as amended) exceed by more
than 10%, with any smaller excess being disregarded in computing the
adjustment to the Conversion Price provided in this subparagraph (vi), the
first reported sale price per share of Common Stock on the Trading Day next
succeeding the Expiration Time, then the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction the numerator of which shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the first reported sale price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to shareholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) on the Expiration Time and the first reported sale price
of the Common Stock on the Trading Day next succeeding the Expiration Time,
such reduction to become effective immediately prior to the opening of
business on the day following the Expiration Time.
(vii) For the purpose of any computation under this Article VII, the
"Current Market Price per share" of Common Stock on any day shall be deemed
to be the average of the daily Closing Prices (as hereinafter defined) per
share of Common Stock for the ten consecutive Trading Days prior to and
including the date in question; provided, however, that (1) if the "ex"
date (as hereinafter defined) for any event (other than the issuance,
distribution or Fundamental Change requiring such computation) that
requires an adjustment to the Conversion Price pursuant to this Article VII
(the "Other Event") occurs during such ten consecutive Trading Days and
prior to the "ex" date for the issuance, distribution or Fundamental Change
requiring such computation (the "Current Event"), the Closing Price for
each Trading Day prior to the "ex" date for such Other Event shall be
adjusted by multiplying such Closing Price by the same fraction by which
the Conversion Price is so required to be adjusted as a result of such
Other Event, (2) if the "ex" date for any Other Event occurs on or after
the "ex" date for the Current Event and on or prior to the date in
question, the Closing Price for each Trading Day on and after the "ex" date
for such Other Event shall be adjusted by multiplying such Closing Price by
the reciprocal of the fraction by which the Conversion Price is so required
to be adjusted as a result of such Other Event
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(provided that in the event that such fraction is required to be determined
at a date subsequent to the date in question and with reference to events
taking place subsequent to the date in question, the Board of Directors of
the Company or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive and
described in a resolution of the Board of Directors of the Company or such
duly authorized committee thereof, as the case may be, shall in good faith
estimate such fraction based on assumptions it deems reasonable regarding
such events taking place subsequent to the date in question, and such
estimated fraction shall be used for purposes of such adjustment until such
time as the actual fraction by which the Conversion Price is so required to
be adjusted as a result of such Other Event is determined), and (3) if the
"ex" date for the Current Event is on or prior to the date in question,
after taking into account any adjustment required pursuant to clause (1) or
(2) of this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash
and the fair market value (as determined in good faith by the Board of
Directors of the Company or, to the extent permitted by applicable law, a
duly authorized committee thereof in a manner consistent with any
determination of such value for purposes of this Article VII, whose
determination shall be conclusive and described in a resolution of the
Board of Directors of the Company or such duly authorized committee
thereof, as the case may be) of the shares of capital stock, evidences of
indebtedness or other assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such "ex" date.
For purposes of this subparagraph (vii), the term "ex" date, (1) when used
with respect to any issuance, distribution or Fundamental Change, means the
first date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance, such distribution or
the cash, securities, property or other assets distributable in such
Fundamental Change to holders of the Common Stock, (2) when used with
respect to any subdivision or combination of shares of Common Stock, means
the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective and (3) when used with respect to any tender
or exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration Time of
such offer.
(viii) No adjustment in the Conversion Price shall be required
pursuant to this Section 7.3(a) unless the adjustment would require a
change of at least 1% of such price; provided, however, that any
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adjustments which by reason of this subparagraph (viii) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest cent (with .005
being rounded upward) or to the nearest 1/100th of a share (with .005 of a
share being rounded upward), as the case may be. Notwithstanding anything
to the contrary in this Article VII, the Company from time to time may, to
the extent permitted by law, reduce the Conversion Price by any amount for
any period of at least 20 Business Days, in which case the Company shall
give at least 15 days' notice of such reduction to the holders of
Securities and the Trustee. In addition, the Company may, at its option,
make such reductions in the Conversion Price in addition to those set forth
in this Article VII, as it considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of Common Stock resulting
from any dividend or distribution of stock or issuance of rights or
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warrants to purchase or subscribe for stock or from any event treated as
such for income tax purposes or for any other reasons.
(ix) In any case in which this Article VII provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (A) issuing
to the holder of any Convertible Debentures converted after such record
date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such
holder any amount in cash in lieu of any fractional shares pursuant to this
Article VII.
(x) For purposes of this Article VII, "Common Stock" includes any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which
is not subject to redemption by the Company. However, subject to the
provisions of this Article VII, shares issuable on conversion of
Convertible Debentures shall include only shares of the class designated as
the Company Common Stock on the date of the initial issuance of Convertible
Debentures by the Company or shares of any class or classes resulting from
any reclassification or reclassification thereof and which have no
preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
(b) Whenever the Conversion Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee and the
transfer agent for the Trust Preferred Securities and the Convertible
Debentures; and
(ii) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Trust Preferred Securities
and the Convertible Debentures at their last addresses as they appear upon
the stock transfer books of the Company and the Trust.
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SECTION 7.4. ADJUSTMENT OF CONVERSION PRICE - FUNDAMENTAL CHANGE.
(a) In the event that the Company shall be a party to any transaction or
series of transactions constituting a Fundamental Change, including, without
limitation, (i) any recapitalization or reclassification of shares of Common
Stock (other than a change in the par value or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with, or
merger of the Company into, any other corporation or any merger of another
corporation into the Company as a result of which holders of Common Stock shall
be entitled to receive securities or other property or assets (including cash)
with respect to or in exchange for Common Stock (other than a merger which does
not result in a reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock), (iii) any sale or transfer of all or
substantially all of the assets of the Company, or (iv) any compulsory share
exchange, pursuant to any of which the holders of Common Stock shall be entitled
to receive other securities, cash or other property, then appropriate provision
shall be made as part of the terms of such transaction or series of transactions
so that the holder of each Convertible Debenture then outstanding shall have the
right thereafter to convert such Convertible Debenture only into (A) if any such
transaction does not constitute a Common Stock Fundamental Change (as
hereinafter defined), the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock into which such Convertible
Debenture might have been converted immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after, in the case of a Non-Stock Fundamental Change (as hereinafter defined),
giving effect to any adjustment in the Conversion Price required by the
provisions which follow in subparagraph (i) of Section 7.4(c), and (B) in the
case of a Common Stock Fundamental Change (as hereinafter defined), common stock
of the kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions which
follow in subparagraph (ii) of Section 7.4(c). The company formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires the Common Stock, as the case may be, shall enter into a
supplemental indenture with the Trustee, satisfactory in form to the Trustee,
the provisions of which provide for adjustments which, for events subsequent to
the effective date of such supplemental indenture, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article VII. The
above provisions shall similarly apply to successive recapitalizations,
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article VII to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 7.4(c). In addition, in the
event of a Common Stock Fundamental Change, each Convertible Debenture shall be
convertible solely into common stock of the kind received by holders of Common
Stock as the result of such Common Stock Fundamental Change as more specifically
provided below in Section 7.4(c).
(c) For purposes of calculating any adjustment to be made pursuant to this
Article VII in the event of a Fundamental Change, immediately following such
Fundamental Change (and for such purposes a Fundamental Change shall be deemed
to occur on the earlier of (a) the occurrence of such Fundamental Change and (b)
the date, if any, fixed for determination of shareholders entitled to receive
the cash, securities,
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property or other assets distributable in such Fundamental Change to holders of
the Common Stock):
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price per share of Common Stock shall be the lower of (A) the Conversion
Price in effect immediately prior to such Non-Stock Fundamental Change, but
after giving effect to any other adjustments effected pursuant to this
Article VII, and (B) the product of (1) the greater of the Applicable Price
(as hereinafter defined) or the then applicable Reference Market Price (as
hereinafter defined) and (2) a fraction the numerator of which shall be
$100 and the denominator of which shall be the amount set forth below
(based on the date on which such Non-Stock Fundamental Change occurs). For
the twelve month period beginning December 15:
Year Denominator
---- -----------
1996................. 105.750
1997................. 105.175
1998................. 104.600
1999................. 104.025
2000................. 103.450
2001................. 102.875
2002................. 102.300
2003................. 101.725
2004................. 101.150
2005................. 100.575
2006 and thereafter.. 100.00;
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price per share of Common Stock shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to this Article
VII, multiplied by a fraction, the numerator of which is the Purchaser
Stock Price (as hereinafter defined) and the denominator of which is the
Applicable Price; provided, however, that in the event of a Common Stock
-------- -------
Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of Common Stock is common stock of the successor,
acquiror or other third party (and cash, if any, paid with respect to any
fractional interests in such common stock resulting from such Common Stock
Fundamental Change) and (B) all of the Common Stock shall have been
exchanged for, converted into or acquired for common stock (and cash, if
any, with respect to fractional interests) of the successor, acquiror or
other third party, the Conversion Price per share of Common Stock
immediately following such Common Stock Fundamental Change shall be the
Conversion Price in effect immediately prior to such Common Stock
Fundamental Change divided by the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of one share
of Common Stock as a result of such Common Stock Fundamental Change.
(d) The following definitions shall apply to terms used in this Article
VII:
(i) "Applicable Price" shall mean (A) in the event of a Non-Stock
Fundamental Change in which the holders of Common Stock receive only cash,
the
-21-
amount of cash receivable by a holder of one share of Common Stock and (B)
in the event of any other Fundamental Change, the average of the Closing
Prices for one share of Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the holders
of Common Stock entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of Common Stock shall
have the right to receive such cash, securities, property or other assets.
(ii) "Closing Price" with respect to any securities on any day shall
mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the New York Stock Exchange or,
if such security is not listed or admitted to trading on such Exchange, on
the principal national securities exchange or quotation system on which
such security is quoted or listed or admitted to trading or, if not quoted
or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the date in question as reported
by the National Quotation Bureau Incorporated, or a similarly generally
accepted reporting service or, if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time to
time by the Board of Directors of the Company for that purpose or a price
determined in good faith by the Board of Directors of the Company.
(iii) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors of the Company) of the consideration received by the
holders of Common Stock pursuant to such transactions consists of shares of
common stock that, for the ten consecutive Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the Nasdaq National Market; provided, however, that a Fundamental
-------- -------
Change shall not be a Common Stock Fundamental Change unless either (A) the
Company continues to exist after the occurrence of such Fundamental Change
and the outstanding Convertible Debentures continue to exist as outstanding
Convertible Debentures, or (B) the outstanding Convertible Debentures
continue to exist as Convertible Debentures and are convertible into common
stock of the successor to the Company.
(iv) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to which
all or substantially all of the Common Stock shall be exchanged for,
converted into, acquired for or constitutes solely the right to receive
cash, securities, property or other assets (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in the
-------- -------
case of a plan involving more than one such transaction or event, for
purposes of adjustment of the Conversion Price, such Fundamental Change
shall be deemed to have occurred when substantially all of the Common Stock
has been exchanged for, converted into, or acquired for or constitutes
solely the right to receive cash, securities, property or other assets, but
the adjustment shall be based upon the consideration which the holders of
Common Stock received in such transaction or event as a result of which
more than 50% of the Common Stock shall
-22-
have been exchanged for, converted into, or acquired for or shall
constitute solely the right to receive cash, securities, property or other
assets.
(v) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the Closing Prices for one share
of the common stock received by holders of Common Stock in such Common
Stock Fundamental Change during the ten Trading Days immediately prior to
the record date for the determination of the holders of Common Stock
entitled to receive such common stock or, if there is no such record date,
prior to the date upon which the holders of Common Stock shall have the
right to receive such common stock.
(vii) "Reference Market Price" shall initially mean $31.67 (which is
an amount equal to 66-2/3% of the last reported sale price for the Common
Stock on the New York Stock Exchange on December 18, 1996) and, in the
event of any adjustment to the Conversion Price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so
that the ratio of the Reference Market Price to the Conversion Price after
giving effect to any such adjustment shall always be the same as the ratio
of $31.67 to the initial Conversion Price set forth in this Article VII.
(e) In determining the amount and type of consideration received by a
holder of Common Stock in the event of a Fundamental Change, consideration
received by a holder of Common Stock pursuant to a statutory right of appraisal
will be disregarded.
SECTION 7.5. NOTICE OF CERTAIN EVENTS.
In case:
(i) the Company shall declare a dividend (or any other
distribution) on Common Stock that would cause an adjustment to the
Conversion Price of the Convertible Debentures pursuant to the terms of any
of the subparagraphs above (including such an adjustment that would occur
but for the terms of the first sentence of Section 7.3(a)(viii) above); or
(ii) the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock or combined into a smaller
number of shares of Common Stock; or
(iii) the Company shall authorize the granting to the holders of
Common Stock generally of rights or warrants (for a period expiring within
45 days after the record date fixed for a distribution of such rights and
warrants) to subscribe for or purchase any shares of the Company's capital
stock or other capital stock of any class or of any other rights (including
any Rights Offerings); or
(iv) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval
-23-
of any shareholders of the Company is required, or of the sale or transfer
of all or substantially all of the assets of the Company or a compulsory
share exchange; or
(v) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall (i) if any Trust Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Trust Preferred Securities,
and shall cause to be mailed to the holders of record of the Trust Preferred
Securities, at their last addresses as they shall appear upon the stock transfer
books of the Trust or (ii) shall cause to be mailed to all Holders at their last
addresses as they shall appear in the Security Register, at least 15 days prior
to the applicable record or effective date hereinafter specified, a notice
stating (A) the date on which a record (if any) is to be taken for the purpose
of such dividend, distribution, rights or warrants or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution, rights or warrants are to be determined or (B)
the date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
SECTION 7.6. COMPANY TO PROVIDE STOCK.
The Company shall reserve, free from pre-emptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Convertible Debentures from time to time as such Convertible Debentures
are presented for conversion, provided, that nothing contained herein shall be
construed to preclude the Company from satisfying its obligations in respect of
the conversion of Convertible Debentures by delivery of repurchased shares of
Common Stock which are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Convertible Debentures hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, provided, however, that nothing in
this Section 7.6 shall be deemed to affect in any way the obligations of the
Company to convert Convertible Debentures into Common Stock as provided in this
Article VII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
-24-
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Convertible Debentures will upon issue be fully paid and non-
assessable by the Company and free of pre-emptive rights.
SECTION 7.7. EMPLOYEE BENEFIT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Company or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of December 23, 1996, shall not be deemed to constitute an issuance of Common
Stock or exercisable, exchangeable or convertible securities by the Company to
which any of the adjustment provisions described above applies. There shall
also be no adjustment of the Conversion Price (i) in case of the issuance of any
stock (or securities convertible into or exchangeable for stock) of the Company
except as specifically described in this Article VII, (ii) as the result of the
issuance of Common Stock upon conversion of the Trust Preferred Securities or
the Convertible Debentures or (iii) as the result of the issuance of Rights.
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on the Common Stock referred to in Section 7.3 (c) or 7.3(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 7.3(e)), the Holder of the Convertible Debentures, upon
the conversion thereof subsequent to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution and
prior to the effectiveness of the Conversion Price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which the Convertible Debentures are converted, the portion of the shares
of Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Company (whose election shall be
evidenced by a resolution of the Board of Directors) with respect to all Holders
so converting, the Company may, in lieu of distributing to such Holder any
portion of such distribution not consisting of cash or securities of the
Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Convertible Debentures described in the
immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due ββββ for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled, provided, that such due ββββ (a) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (b) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
-25-
SECTION 7.9. PREFERRED STOCK PURCHASE RIGHTS.
(a) So long as Rights of a kind similar to those anticipated to be
declared in the first quarter of 1997 by the Board of Directors pursuant to the
Rights Agreement between the Company and the Person named therein as Rights
Agent (the "Rights Agreement"), as the same may hereafter be amended or reissued
("Rights"), are attached to the outstanding shares of Common Stock, each share
of Common Stock issued upon conversion of the Convertible Debentures prior to
the earliest of any Distribution Date (as defined in the Rights Agreement), the
date of redemption of the Rights or the date of expiration of the Rights shall
be issued with Rights in a number equal to the number of Rights then attached to
each such outstanding share of Common Stock.
(b) For the purposes of Section 7.3(a)(iii), upon the earlier to occur of
(i) the eleventh day following a Section 11(a)(ii) Event and (ii) an event
described in Section 13(a)(x), (y) or (z) of the Rights Agreement, then an
issuance of rights to purchase shares of Common Stock during a period not
exceeding 45 days from the date of such dividend or other distribution shall be
deemed to have occurred, unless the Rights were redeemed or expired prior to
such eleventh day or such Section 13(a) Event, as the case may be, unless the
Company has taken action pursuant to Section 11(a)(iii) or Section 13 of the
Rights Agreement to substitute other consideration for all or any portion of the
Series C Preferred Stock ("Series C Stock") otherwise issuable upon exercise of
a Right. For purposes of the reduction of the conversion price provided for in
Section 7.3(a)(iii) upon such deemed issuance of rights, each share of Series C
Stock shall be deemed to constitute 100 shares of Common Stock (subject to
adjustment as provided in the Rights Plan), and the date fixed for determination
of stockholders entitled to receive such rights shall be the close of business
on the tenth such day following such Section 11(a)(ii) Event or the date of such
Section 13(a) Event, as the case may be; provided, however, that the current
market price per share of the Common Stock shall be determined based on the 10
consecutive Trading Days prior to and including the Distribution Date.
(c) For the purposes of Section 7.3(a)(iv), if the Company has taken
action pursuant to Section 11(a)(iii) or Section 13 of the Rights Agreement to
substitute other consideration for all or any portion of the Series C Stock
otherwise issuable upon exercise of a Right, upon the earlier to occur of (x)
the eleventh day following a Stock Acquisition Date and (y) a Section 13(a)
Event, then an issuance of Securities shall be deemed to have occurred, unless
the Rights have been redeemed or have expired prior to such eleventh Business
Day or such Section 13(a) Event, as the case may be. For purposes of this
reduction of the conversion price provided for in Section 7.3(a)(iv) upon such
deemed issuance of Securities, the date fixed for determination of stockholders
entitled to receive such rights shall be the close of business on the tenth such
day following such Section 11(a)(ii) Event or the date of such Section 13(a)
Event, as the case may be; provided, however, that the current market price per
share of the Common Stock shall be determined based on the 10 consecutive
Trading Days prior to and including the Distribution Date.
(d) For purposes of Section 7.3(a)(iii) and Section 7.3(a)(iv), the
redemption by the Company of Rights shall be deemed to be an expiration of such
Rights.
(e) If any Convertible Debenture has been converted on or after the
Distribution Date and on or before the tenth day following such Section
11(a)(ii) Event or the date of such Section 13(a) Event, as the case may be,
then as soon as practicable following the date on which the adjustment required
by subsections (a)(iii) and (a)(iv) of Section 7.3 is
-26-
made, the Company shall issue to the holder of the Convertible Debenture so
converted a number of additional shares of Common Stock (and cash in lieu of any
fraction share) that would have been issuable upon such conversion had such
adjustment been made immediately prior to such conversion.
ARTICLE VIII.
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE.
The Convertible Debentures and the Trustee's Certificate of Authentication
to be endorsed thereon are to be substantially in the following forms:
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE CONVERTIBLE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE
FOLLOWING - -
This Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Convertible Debenture is exchangeable for
Convertible Debentures registered in the name of a Person other than the
Depositary or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Convertible Debenture (other than a transfer
of this Convertible Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or to a successor Depositary or its nominee) may be
registered except in limited circumstances.
Unless this Convertible Debenture is presented by an authorized
representative of The Depository Trust Company (55 βββββ ββββββ, βββ ββββ, βββ
ββββ) to the Company or its agent for registration of transfer, exchange or
payment, and any Convertible Debenture 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.]
No.________
NUEVO ENERGY COMPANY
5.75% CONVERTIBLE SUBORDINATED DEBENTURE DUE DECEMBER 15, 2026
Nuevo Energy Company, a Delaware corporation (the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _____________________ or registered
assigns, the principal sum of Dollars ($____) on December 15, 2026, and to pay
interest on said principal sum from December 23, 1996, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly
-27-
(subject to deferral as set forth herein) in arrears on March 15, June 15,
September 15, and December 15 of each year commencing March 15, 1997, at the
rate of 5.75% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and (without
duplication 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 compounded quarterly. 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. Except as provided in the following sentence, the amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on
this Convertible Debenture is not a Business Day, then payment of interest
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 such date. The interest installment
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture (referred to on the reverse hereof) be
paid to the Person in whose name this Convertible Debenture (or one or more
Predecessor Securities, as defined in said Indenture) is registered on the
Regular Record Date for such interest installment, which shall be the close of
business on the Business Day next preceding such Interest Payment Date unless
otherwise provided in the Indenture. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holder on such Regular Record Date and may be paid to the Person in
whose name this Convertible Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of the Convertible Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Convertible Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Convertible
Debenture shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered Holder at such address as shall appear
in the Security Register or by wire transfer to an account appropriately
identified by the Holder. Notwithstanding the foregoing, so long as the Holder
of this Convertible Debenture is the Institutional Trustee, the payment of the
principal of (and premium, if any) and interest on this Convertible Debenture
will be made at such place and to such account as may be designated by the
Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Convertible Debenture
is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Convertible Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her 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 or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance
-28-
of the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
This Convertible Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
under its corporate seal.
NUEVO ENERGY COMPANY
By:_________________________________________
Name:
Title:
[Seal]
Attest:
________________________
Name:
Title:
-29-
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series designated therein
referred to in the within-mentioned Indenture.
Dated:______________________ WILMINGTON TRUST COMPANY,
as Trustee
By:___________________________________
Authorized Signatory
-30-
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series of Securities
of the Company (herein sometimes referred to as the "Debentures"), specified in
the Indenture, all issued or to be issued in one or more series under and
pursuant to a Subordinated Indenture dated as of November 25, 1996, duly
executed and delivered between the Company and Wilmington Trust Company, a
Delaware banking corporation, as Trustee (the "Trustee"), as supplemented by the
First Supplemental Indenture dated as of December 23, 1996, between the Company
and the Trustee (the Indenture as so supplemented, the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Debentures. By the terms of the Indenture, the Debentures are issuable
thereunder in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Debentures is limited in aggregate principal amount as specified in said First
Supplemental Indenture and herein sometimes referred to as the "Convertible
Debentures."
Because of the occurrence and continuation of a Special Event, in certain
circumstances, this Convertible Debenture may become due and payable at the
principal amount (the "Redemption Price") together with any accrued and unpaid
interest thereon. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the Company
determines. The Company shall have the right to redeem this Convertible
Debenture at the option of the Company, upon not less than 30 nor more than 60
days notice, without premium or penalty, in whole or in part at any time on or
after December 15, 1999 (an "Optional Redemption") at the following prices
(expressed as percentages of the principal amount of the Convertible Debentures)
(the "Optional Redemption Price") together with accrued and unpaid interest,
including Additional Interest and Compounded Interest to, but excluding, the
redemption date, if redeemed during the 12-month period beginning December 15:
Year Redemption Price
---- -----------------
1999............... 104.026%
2000............... 103.450%
2001............... 102.876%
2002............... 102.300%
2003............... 101.726%
2004............... 101.150%
2005............... 100.576%
and 100% if redeemed on
or after December 15, 2006.
If Convertible Debentures are redeemed on any March 15, June 15, September
15, or December 15, accrued and unpaid interest shall be payable to holders of
record on the relevant record date.
So long as the corresponding Trust Preferred Securities are outstanding,
the proceeds from the redemption of any of the Convertible Debentures will be
used to redeem Trust Preferred Securities.
-31-
If the Convertible Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Convertible Debentures will be redeemed
pro rata or by lot or by any other method utilized by the Trustee.
In the event of redemption of this Convertible Debenture in part only, a
new Convertible Debenture or Convertible Debentures of this series 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, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
may 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 Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures of such
series; provided, however, that no such supplemental indenture shall (a) change
the fixed maturity of any Debenture of any series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, or make any
change that adversely affects the right to convert any Debenture of any series
or make any change in the subordination provisions that adversely affects the
rights of any Holders of any Debenture of any series, without the consent of the
Holder of each Debenture so affected, or (b) reduce the aforesaid percentage of
Debentures of such series, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debenture of any series then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Debentures of any series at the time outstanding
affected thereby, on behalf of all of the Holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any Debentures of such
series or in respect of a covenant that cannot be amended without the consent of
the Holder of each Debenture affected. Any such consent or waiver by the
registered Holder of this Convertible Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Convertible Debenture and of any Convertible
Debenture issued in exchange therefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Convertible Debenture.
No reference herein to the Indenture and no provision of this Convertible
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
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As long as an Event of Default under Section 501(1) of the Indenture shall
not have occurred and be continuing, the Company shall have the right at any
time during the term of the Convertible Debentures and from time to time to
extend the interest payment period of such Convertible Debentures for up to 20
consecutive quarters (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Convertible
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
previous and further extensions thereof shall not exceed 20 consecutive
quarters. At the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any additional amounts
then due, the Company may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount and series
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 due presentment for registration of transfer of this Convertible
Debenture, the Company, the Trustee, any paying agent and the Security Registrar
may deem and treat the registered Holder hereof as the absolute owner hereof
(whether or not this Convertible Debenture shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security 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 Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the 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.
The Holder of any Convertible Debenture has the right, exercisable at any
time through the close of business (New York time) on December 15, 2026 (or, in
the case of a Convertible Debenture called for redemption, prior to the close of
business on the Business Day prior to the corresponding redemption date), to
convert the principal amount
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thereof (or any portion thereof that is an integral multiple of $50) into shares
of Common Stock at the initial conversion rate of 0.8421 shares of Common Stock
for each Convertible Debenture (equivalent to a Conversion Price of $59.375 per
share of Common Stock), subject to adjustment under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete and sign a
conversion notice substantially in the form attached hereto, (b) surrender the
Convertible Debenture to a Conversion Agent, (c) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. If a Convertible Debenture 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 Convertible Debenture is registered at the close
of business on such record date, and (other than a Convertible Debenture or a
portion of a Convertible Debenture 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 Convertible Debenture must be
accompanied by payment of an amount equal to the Distribution payable on such
Distribution payment date. The number of shares issuable upon conversion of a
Convertible Debenture is determined by dividing the principal amount of the
Convertible Debenture converted by the Conversion Price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest. The outstanding principal
amount of any Convertible Debenture shall be reduced by the portion of the
principal amount thereof converted into shares of Common Stock.
[The Convertible Debentures of this series are issuable only in registered
form without Coupons in denominations of $50 and any integral multiple thereof.]
[This Global Debenture is exchangeable for Convertible Debentures in definitive
form only under certain limited circumstances set forth in the Indenture.
Convertible Debentures of this series so issued are issuable only in registered
form without Coupons in denominations of $50 and any integral multiple thereof.]
As provided in the Indenture and subject to certain limitations therein set
forth, Convertible Debentures of this series are exchange able for a like
aggregate principal amount of Convertible Debentures of this series of a
different authorized denomination, as requested by the Holder surrendering the
same.
All terms used in this Convertible Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE
CONVERTIBLE DEBENTURES.
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[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Nuevo Energy Company:
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Stock of NUEVO ENERGY COMPANY in accordance with the
terms of the Indenture referred to in this Convertible Debenture, and directs
that the shares 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 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 Portion of Convertible Debenture to be
converted ($50 or integral multiple
thereof)
$_______________
------------------------------------
Signature (for conversion only)
Please print or typewrite 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 of
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 and Exchange Act of 1934, as amended.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
Debenture to:
----------------------------------------
----------------------------------------
----------------------------------------
(Insert assignee's social security or tax identification number)
----------------------------------------
----------------------------------------
----------------------------------------
(Insert address and zip code of assignee)
----------------------------------------
----------------------------------------
----------------------------------------
and irrevocably appoints______________________________________________
__________________________________________ agent to transfer this Convertible
Debenture 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 Convertible
Debenture)
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 of
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 and Exchange Act of 1934, as amended.
ARTICLE IX.
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES.
Convertible Debentures in the aggregate principal amount of $103,092,780
($118,556,700 if the Underwriters' over-allotment option is exercised in full)
may, upon execution of this First Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Convertible
Debentures to or upon the written order of the Company, signed by its Chairman,
any Vice Chairman, its President, or any Vice
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President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL INDENTURE
CONTROLS.
The Indenture, as supplemented by this First Supplemental Indenture, is in
all respects ratified and confirmed, and this First Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided. The provisions of this First Supplemental Indenture shall
supersede the provisions of the Indenture to the extent the Indenture is
inconsistent herewith.
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 10.3. GOVERNING LAW.
This First Supplemental Indenture and each Convertible Debenture shall be
deemed to be a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of said
State.
SECTION 10.4. SEPARABILITY.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Convertible Debentures shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture or of the Convertible Debentures, but this First
Supplemental Indenture and the Convertible Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 10.5. COUNTERPARTS.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year first above written.
NUEVO ENERGY COMPANY
By:_________________________________________
ββββββ β. ββββ
Senior Vice President and
Chief Financial Officer
WILMINGTON TRUST COMPANY
By:_________________________________________
Name:_____________________________________
Title:____________________________________
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