EXHIBIT 4.9
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UNOCAL CORPORATION
As Issuer
and
THE BANK OF NEW YORK
As Trustee
___% Junior [CONVERTIBLE] Subordinated Debentures
Second Supplemental Indenture
Dated as of ____________, _____
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TABLE OF CONTENTS PAGE
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ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms. . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.. . . . . . . . . . . . . 9
SECTION 2.2. Maturity.. . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.3. Form and Payment.. . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.4. Global Debenture.. . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.5. Interest.. . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption.. . . . . . . . . . . . . . . . .11
SECTION 3.2. Optional Redemption by Company.. . . . . . . . . . . . . .12
SECTION 3.3. Redemption of Less Than All Debentures.. . . . . . . . . .13
SECTION 3.4. No Sinking Fund. . . . . . . . . . . . . . . . . . . . . .13
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.. . . . . . . . . . .13
SECTION 4.2. Notice of Extension. . . . . . . . . . . . . . . . . . . .14
SECTION 4.3. Limitation of Transactions.. . . . . . . . . . . . . . . .14
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses. . . . . . . . . . . . . . . . . . . .15
SECTION 5.2. Payment Upon Resignation or Removal. . . . . . . . . . . .15
ARTICLE VI
COVENANTS
SECTION 6.1. Covenants as to the Trust. . . . . . . . . . . . . . . . .15
SECTION 6.2. Listing or Quotation of Debentures.. . . . . . . . . . . .16
ARTICLE VII
CONVERSION OF DEBENTURES
SECTION 7.1. Conversion Rights. . . . . . . . . . . . . . . . . . . . .16
SECTION 7.2. Conversion Procedure.. . . . . . . . . . . . . . . . . . .16
SECTION 7.3. Certain Conversion Price Adjustments.. . . . . . . . . . .18
SECTION 7.4. Merger, Consolidation, or Sale of Assets.. . . . . . . . .22
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TABLE OF CONTENTS PAGE
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SECTION 7.5. Spinoff. . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 7.6. Notice of Adjustments of Conversion Price. . . . . . . . .28
SECTION 7.7. Prior Notice of Certain Events.. . . . . . . . . . . . . .28
SECTION 7.8. Certain Plans, Rights or Securities. . . . . . . . . . . .29
SECTION 7.9. Preferred Stock Purchase Rights. . . . . . . . . . . . . .29
SECTION 7.10. Special Provisions Regarding Adjustment of Conversion
Price or Other Provisions. . . . . . . . . . . . . . . . .31
SECTION 7.11. Certain Additional Rights. . . . . . . . . . . . . . . . .31
SECTION 7.12. Trustee Not Responsible for Determining Conversion
Price or Adjustments.. . . . . . . . . . . . . . . . . . .32
ARTICLE
VIII EVENTS OF DEFAULT
SECTION 8.1. Events of Default. . . . . . . . . . . . . . . . . . . . .32
ARTICLE IX
FORM OF DEBENTURE
SECTION 9.1. Form of Debenture. . . . . . . . . . . . . . . . . . . . .32
ARTICLE X
ORIGINAL ISSUE OF DEBENTURES
SECTION 10.1. Original Issue of Debentures.. . . . . . . . . . . . . . .33
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Ratification of Base Indenture: Supplemental
Indenture Controls.. . . . . . . . . . . . . . . . . . . .33
SECTION 11.2. Trustee Not Responsible for Recitals.. . . . . . . . . . .33
SECTION 11.3. Governing Law. . . . . . . . . . . . . . . . . . . . . . .33
SECTION 11.4. Separability.. . . . . . . . . . . . . . . . . . . . . . .33
SECTION 11.5. Counterparts.. . . . . . . . . . . . . . . . . . . . . . .34
SECTION 11.6 List of Holders of Securities. . . . . . . . . . . . . . .33
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THIS SECOND SUPPLEMENTAL INDENTURE, dated as of ___________,_____ (the
"Supplemental Indenture"), is between Unocal Corporation, a Delaware corporation
(the "Company"), and The Bank of New York, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company has executed and delivered the Base Indenture (as
defined herein) to the Trustee to provide for the issuance of the Company's
Securities from time to time in one or more series as might be determined by the
Company under the Base Indenture, in an unlimited aggregate principal amount as
may be authenticated and delivered as provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its "___% Junior [Convertible] Subordinated Debentures" (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Base
Indenture and this Supplemental Indenture;
WHEREAS, Unocal Capital Trust II, a Delaware statutory business trust
(the "Trust"), intends to issue up to $__________ aggregate liquidation amount
of its ___% Trust [Convertible] Preferred Securities (the "Trust Preferred
Securities") and up to $____________ aggregate liquidation amount of its ___ %
Trust Common Securities (the "Trust Common Securities" and, together with the
Trust Preferred Securities, the "Trust Securities"), representing undivided
beneficial interests in the assets of the Trust; and
WHEREAS, the Trust proposes to issue Trust Securities to the Company in
exchange for Debentures in an aggregate principal amount equal to the aggregate
liquidation amount of the Trust Securities issued:
NOW, THEREFORE, in consideration of the issuance to the Company of Trust
Securities by the Trust and the acceptance of the Debentures in exchange
therefor by the Trust, and for the purpose of setting forth, as provided in the
Base Indenture, the form and substance of the 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 this Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) unless otherwise defined herein, the capitalized terms used
herein that are defined in the Base Indenture have the same meanings when used
in this Supplemental Indenture;
(b) the terms defined in this Article I have the meanings assigned to
them in this Article I and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act, either 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 as are generally accepted in the United States of America
at the date of such computation;
(e) a reference to a Section or Article (or subdivision thereof) or
the Recitals is to a Section or Article (or subdivision thereof) or the Recitals
of this Supplemental Indenture;
(f) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this 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;
(h) the following terms have the meanings given to them in the Rights
Agreement:
(i) Distribution Date; (ii) 15% Ownership Date; and (iii) Section 13(a) Event;
(i) the terms defined as follows shall have the meanings assigned to
them as follows:
"ADDITIONAL INTEREST" has the meaning specified in Section 2.5(c).
"ADMINISTRATIVE ACTION" means a judicial decision, official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations.
"APPLICABLE PRICE" means (i) in the event of a Non-Stock Fundamental
Change in which the holders of Common Stock receive only cash, the amount of
cash received by the holder of one share of Common Stock and (ii) in the event
of any other Fundamental Change, the average of the Closing Prices of the Common
Stock for the 10 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, the date upon which the holders of the
Common Stock shall have the right to receive such cash, securities, property or
other assets.
"AVERAGE STOCK PRICE" shall mean the average of the Closing Prices of
the Common Stock for the 10 Trading Days immediately prior to the "ex" dividend
or distribution date of the Common Stock, or absent such a date, the 10 Trading
Days immediately prior to the Spinoff Distribution Date; PROVIDED, HOWEVER, that
if the Spinoff Fair Value is computed with respect to Closing Prices of Spinoff
Company Stock following the Spinoff Distribution Date, the Average
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Stock Price shall be calculated as the average of the sums of the Closing Prices
of the Common Stock and the Spinoff Company Stock for the 10 Trading Days
immediately following the Spinoff Distribution Date.
"BASE INDENTURE" means that Indenture dated as of September 11, 1996
between the Company and the Trustee, as it may be amended, restated,
supplemented and/or modified from time to time.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or any other
day on which banking institutions in New York, New York or Los Angeles,
California are permitted or required by any applicable law to close.
"CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation, that is acting as
depositary for the Debentures and in whose name or in the name of a nominee of
that organization shall be registered a Global Debenture and which shall
undertake to effect book entry transfers and pledges of the Debentures. The
initial Clearing Agency shall be the Depository Trust Company.
"CLOSING PRICE" of any common stock on any day shall mean the last
reported 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 of such common stock, in each case on the New York Stock Exchange composite
tape or, if the common stock is not listed or admitted to trading on such
exchange, on the principal national securities exchange or quotation system on
which such common stock is listed or quoted or admitted to trading, or, if not
listed or quoted or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such common
stock as furnished by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Board of Directors.
"COMMON SECURITY CERTIFICATE" means a definitive certificate in fully
registered form representing a Trust Common Security substantially in the form
of Exhibit A-2 to the Declaration.
"COMMON STOCK" means shares of the common stock, $1.00 par value, of the
Company.
"COMMON STOCK FUNDAMENTAL CHANGE" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors) of the consideration received by the holders of Common Stock consists
of common stock that, for the 10 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 or
approved for quotation subject to notice of issuance on the Nasdaq National
Market System; PROVIDED, HOWEVER, that a Fundamental Change shall not be a
Common Stock Fundamental Change unless either (i) the Company continues to exist
after the occurrence of such Fundamental Change and the outstanding Debentures
continue to exist as outstanding Debentures, or (ii) not later than the
occurrence of such Fundamental Change, the outstanding Debentures are converted
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into or exchanged for [convertible] debentures of a corporation succeeding to
the business of the Company, which [convertible] debentures have terms
substantially similar to those of the Debentures as determined in good faith by
the Board of Directors.
"COMPANY" has the meaning specified in the first paragraph hereof.
"COMPOUNDED INTEREST" has the meaning specified in Section 4.1.
["CONVERSION AGENT" means the Institutional Trustee acting as Conversion
Agent for a Holder.]
["CONVERSION DATE" has the meaning specified in Section 7.2(b).]
["CONVERSION NOTICE" has the meaning specified in Section 7.2(a).]
["CONVERSION PRICE" means $______ as of the date of this Supplemental
Indenture, as may be adjusted from time to time as set forth in Article VII.]
"COUPON RATE" has the meaning specified in Section 2.5.
"CURRENT MARKET PRICE" means, on any date in question, the average of
the Closing Prices of such common stock for the 10 Trading Day period ending on
the earlier of the day in question and, if applicable, the day before the "ex"
date with respect to the issuance or distribution requiring such computation;
PROVIDED, HOWEVER, that if more than one event occurs that would require an
adjustment pursuant to Section 7.3, the Board of Directors may make such
adjustments to the Closing Prices during such 10 Trading Day period as it deems
appropriate to effectuate the intent of the adjustments in Section 7.3, in which
case any such determination by the Board of Directors shall be set forth in a
Board Resolution and shall be conclusive.
"DEBENTURES" has the meaning specified in the Recitals.
"DECLARATION" means the Amended and Restated Declaration of Trust of the
Trust, dated as of ________________, ________, as it may be amended, restated,
supplemented and/or modified from time to time.
"DEFERRED INTEREST" has the meaning specified in Section 4.1.
"DELAWARE TRUSTEE" means the Delaware Trustee, if any, of the Trust.
"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 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.
"DISSOLUTION TAX OPINION" means an opinion of independent tax counsel
experienced in such matters to the effect that on or after ________________,
___, as a result of (a) any amendment to, clarification of, or change (including
any announced prospective change) in the
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laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, (b) any
Administrative Action or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification or change is made known, which amendment, clarification, or change
is effective or such pronouncement or decision is announced, in each case, on or
after, ________, ____, there is more than an insubstantial risk that (i) the
Trust is or will be within 90 days of the date thereof, subject to United States
federal income tax with respect to interest accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a DE MINIMIS amount of taxes, duties or other governmental
charges, or (iii) interest payable in cash by the Company to the Trust on the
Debentures (other than interest attributable to the Trust Common Securities) is
not, or within 90 days of the date thereof will not be, deductible, in whole or
in part, by the Company for United States federal income tax purposes; PROVIDED,
HOWEVER, that such an opinion shall not be deemed to be a "Dissolution Tax
Opinion" if the change in tax law requires the Company for United States
federal income tax purposes to defer taking a deduction for any OID that accrues
with respect to the Debentures until the interest payment related to such OID is
paid by the Company in cash, PROVIDED such change in tax law does not create
more than an insubstantial risk that the Company will be prevented from taking a
deduction for OID accruing with respect to the Debentures as of a date that is
no later than the date the interest payment related to such OID is actually paid
by the Company in cash.
"DISTRIBUTION" means a distribution to the holders of Trust Securities
of the amount of any interest (including Compounded Interest and Additional
Interest), premium and/or principal paid on the Debentures.
"ex date" (1) when used with respect to any issuance or distribution,
means the first date on which such common stock trades regular way on the New
York Stock Exchange or, if not listed on the New York Stock Exchange, on any
securities exchange where such common stock may be listed or in the relevant
market from which the Closing Prices were obtained, without the right to receive
such issuance or distribution, and (2) when used with respect to any tender or
exchange offer means the first date on which such common stock trades regular
way on such securities exchange or in such market after the Expiration Time of
such offer.
"EXPIRATION TIME" has the meaning specified in Section 7.3(e).
"EXTENDED INTEREST PAYMENT PERIOD" has the meaning specified in
Section 4.1.
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event or
series of transactions or events pursuant to which all or substantially all of
the Common Stock is 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 any such series of transactions or events, for purposes
of adjustment of the Conversion Price, a Fundamental Change shall be deemed to
have occurred
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when substantially all of the Common Stock shall have been exchanged for,
converted into or acquired for, or constitute solely the right to receive, such
cash, securities, property or other assets, but the adjustment shall be based
upon the consideration that the holders of Common Stock received in the
transaction or event as a result of which more than 50% of the Common Stock
outstanding shall have been exchanged for, converted into or acquired for, or
shall constitute solely the right to receive, such cash, securities, property or
other assets.
"GLOBAL DEBENTURE" has the meaning specified in Section 2.4.
"GUARANTEE" means that Preferred Securities Guarantee Agreement dated as
of even date hereof between the Company and the Preferred Guarantee Trustee (as
defined therein) for the benefit of the holders of Trust Preferred Securities.
"INTEREST PAYMENT DATE" has the meaning specified in Section 2.5.
"INVESTMENT COMPANY EVENT" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in such matters to the
effect that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulations by any
legislative body, court, governmental agency or regulatory authority on or after
_________________________, _____, there is more than an insubstantial risk that
the Trust is or will be considered an "investment company" which is required to
be registered under the Investment Company Act of 1940, as amended.
"INSTITUTIONAL TRUSTEE" means the Institutional Trustee of the Trust.
"JUNIOR SECURITIES" shall mean (i) shares of any stock of any class of
the Company and (ii) securities of the Company which are subordinated in right
of payment to all Senior Indebtedness that may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Debentures are so subordinated as provided in
Article XI.
"LIST OF HOLDERS" has the meaning specified in Section 11.6.
"MATURITY DATE" means the date on which the 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.
"MINISTERIAL ACTION" has the meaning specified in Section 3.1.
"NEW DEBENTURES" has the meaning specified in Section 7.5(a).
"90-DAY PERIOD" has the meaning specified in Section 3.1.
"NON BOOK-ENTRY PREFERRED SECURITIES" has the meaning specified in
Section 2.4.
"NON-STOCK FUNDAMENTAL CHANGE" means any Fundamental Change other than a
Common Stock Fundamental Change.
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"NO RECOGNITION OPINION" means an opinion of independent tax counsel
experienced in such matters (which opinion may rely on published revenue rulings
of the Internal Revenue Service) to the effect that the holders of the Trust
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution of
Debentures.
"OID" means original issue discount.
"OPTIONAL REDEMPTION PRICE" has the meaning specified in Section 3.2.
"PREFERRED SECURITY CERTIFICATE" means a certificate representing a
Trust Preferred Security substantially in the form of Exhibit A-1 to the
Declaration.
"PRINCIPAL AMOUNT OF ONE DEBENTURE" means $___ as of the date of this
Supplemental Indenture, as may be adjusted from time to time as set forth in
Section 7.5.
"PURCHASED SHARES" has the meaning specified in Section 7.3(e).
"PURCHASER STOCK PRICE" means, 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 for the 10 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, the date upon which the
holders of Common Stock shall have the right to receive such common stock.
"REDEMPTION TAX OPINION" means an opinion of independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Debentures for United States federal income tax purposes even
after the Debentures were distributed to the holders of Trust Securities in
liquidation of such holders' interests in the Trust as described in the
Declaration.
"REFERENCE DATE" has the meaning specified in Section 7.3(c).
"REFERENCE MARKET PRICE" initially means $______, and, in the event of
any adjustment to the Conversion Price other than as a result of a Fundamental
Change or a Spinoff, the amount as adjusted so that the ratio of the Reference
Market Price to the Conversion Price after giving effect to any such adjustment
of the Conversion Price shall always be the same as the ratio of $_____ to the
initial Conversion Price of $_____.
"REGULAR RECORD DATE" has the meaning specified in Section 2.5(a).
"REGULAR TRUSTEE" means the Regular Trustee of the Trust.
"RIGHTS" has the meaning specified in Section 7.9.
"RIGHTS AGREEMENT" shall mean that certain Rights Agreement dated as or
January 29, 1990 by and between the Company and the Rights Agent (as defined
therein).
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"RIGHTS EXPIRATION DATE" shall mean the "Expiration Date" as defined in
the Rights Agreement.
"RIGHTS RECORD DATE" has the meaning specified in Section 7.3.
"RIGHTS REDEMPTION DATE" shall mean the "Redemption Date" as defined in
the Rights Agreement.
"SERIES A STOCK" has the meaning specified in Section 7.9(b).
"SPECIAL EVENT" means a Tax Event or an Investment Company Event.
"SPECIAL EVENT REDEMPTION PRICE" has the meaning specified in
Section 3.1.
"SPINOFF" has the meaning specified in Section 7.5(a).
"SPINOFF COMPANY" has the meaning specified in Section 7.5(a).
"SPINOFF COMPANY DEBENTURE" has the meaning specified in Section 7.5(a).
"SPINOFF COMPANY STOCK" has the meaning specified in Section 7.5(a).
"SPINOFF COMPANY TRUST" has the meaning specified in Section 7.5(c).
"SPINOFF DISTRIBUTION DATE" has the meaning specified in Section 7.5(a).
"SPINOFF EXCHANGE DATE" has the meaning specified in Section 7.5(c).
"SPINOFF FAIR VALUE" shall mean the product of (a) the average of the
Closing Prices for one share of Spinoff Company Stock as reported on a "when
issued" basis for the 10 Trading Days immediately prior to the Spinoff
Distribution Date or in the absence of "when issued" trading, for the 10 Trading
Days immediately following the Spinoff Distribution Date, multiplied by (b) the
number of shares of Spinoff Company Stock distributed to a holder of one share
of Common Stock in the Spinoff; PROVIDED, HOWEVER, in the absence of an active
trading market for the Spinoff Company Stock, the fair value of the shares of
Spinoff Company Stock distributed to a holder of one share of Common Stock in
the Spinoff shall be determined by the Board of Directors in good faith.
"SPINOFF RATIO" shall mean a fraction, the numerator of which is the
Spinoff Fair Value, and the denominator of which is the Average Stock Price.
"SUPPLEMENTAL INDENTURE" has the meaning specified in the first
paragraph hereof.
"TAX EVENT" means that the Regular Trustees have received a Dissolution
Tax Opinion.
"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" has the meaning specified in the first paragraph hereof.
"TRUST COMMON SECURITIES" has the meaning specified in the Recitals.
"TRUST PREFERRED SECURITIES" has the meaning specified in the Recitals.
"TRUSTEE" has the meaning specified in the Recitals.
"TRUST SECURITIES" has the meaning specified in the Recitals.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized a series of Debentures designated the "___%
Junior Subordinated Debentures," limited in aggregate principal amount to
$__________, which amount shall be as set forth in a Company Order for the
authentication and delivery of Debentures pursuant to Section 2.03 of the Base
Indenture.
SECTION 2.2. MATURITY.
The Maturity Date is _____________1, 20__.
SECTION 2.3. FORM AND PAYMENT.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without Coupons, in denominations of the
Principal Amount of One Debenture and integral multiples thereof. Principal and
interest on the Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable, and such Debentures will be
exchangeable for Debentures bearing identical terms and provisions, at the
office or agency of the Trustee; PROVIDED, HOWEVER, that payment of interest may
be made at the option of the Company by check mailed to the Holder at such
address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of any Debentures is the Institutional Trustee,
the payment of the principal of and interest (including Compounded Interest and
Additional Interest, if any) on such 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 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 Debentures (a "Global Debenture"), to be registered
in the name of the Clearing Agency, or its nominee, and delivered by the
Trustee to the Clearing Agency for crediting to the accounts of its
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participants pursuant to the instructions of the Regular Trustees. The
Company upon any such presentation 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 Base Indenture.
Payments on the Debentures issued as a Global Debenture will be made to
the Clearing Agency; and
(ii) any Preferred Security Certificate which represents Trust
Preferred Securities other than Trust Preferred Securities held by the
Clearing Agency or its nominee ("Non Book-Entry Preferred Securities")
will be deemed to represent beneficial interests in Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued
and unpaid interest (including Compounded Interest) equal to accumulated
and unpaid distribution on the Non Book-Entry Preferred Securities until
such Preferred Security Certificates are presented to the Security
Registrar for transfer or reissuance at which time such Preferred
Security Certificates will be canceled and a Debenture, registered in
the name of the Holder of the Preferred Security Certificate or the
transferee of the Holder of such Preferred Security Certificate, as the
case may be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate canceled, will
be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Base Indenture. On
issue of such Debentures, Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been canceled.
(b) A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Clearing Agency, or to a successor Clearing
Agency selected or approved by the Company or to a nominee of such successor
Clearing Agency.
SECTION 2.5. INTEREST.
(a) Each Debenture will bear interest at the rate of ____% per annum
(the "Coupon Rate") from _____________, _____, or the most recent date on which
interest has been paid in full, 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 1, June 1, September 1
and December 1 of each year (each, an "Interest Payment Date"), commencing on
____________, _____, to the Holder of such Debenture or any Predecessor
Debenture, at the close of business on the record date for such Interest Payment
Date, which record date (the "Regular Record Date"), (i) in respect of
(A) Debentures of which the Institutional Trustee is the only Holder and the
related Trust Preferred Securities are in book-entry only form or (B) a Global
Debenture, shall be the close of business on the Business Day next preceding
that Interest Payment Date; and (ii) in respect of Debentures other than as set
forth in (i), the Company may select a Regular Record Date for such interest
installment which shall be any date at least one Business Day before an Interest
Payment Date.
10
(b) The amount of interest payable for any full quarterly period
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,
shall be computed on the basis of 30-day months and, for periods of less than a
month, the actual number of days elapsed per 30-day month. In the event that
any date on which interest is payable on the Debentures is not a Business Day,
then payment of interest payable on such date shall 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.
(c) If, at any time while the Institutional Trustee is the Holder of
any Debentures, the Trust or the Institutional Trustee shall be 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 shall pay as additional interest
("Additional Interest") on the 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 government charges been imposed.
ARTICLE III
REDEMPTION OF THE 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) the Regular Trustees shall have been informed by independent tax
counsel experienced in such matters that, for substantive reasons, it cannot
deliver a No Recognition Opinion to the Trust,
then, notwithstanding Section 3.2 but subject to Section 3.3, the Company shall
have the right upon not less than 30 days nor more than 60 days notice to the
Holders of the Debentures to redeem the Debentures, in whole or in part, for
cash within 90 days following the occurrence of such Special Event (the "90-Day
Period") at a redemption price equal to 100% of the principal amount to be
redeemed (the "Special Event Redemption Price") plus any accrued and unpaid
interest (including Compounded and Additional Interest) thereon to but excluding
the date of such redemption, PROVIDED that, if at the time there is available to
the Company the opportunity to eliminate, which elimination shall be complete
within the 90-Day Period, such Special Event by taking some ministerial action
(such as filing a form or making an election, or pursuing some other similar
reasonable measure) that has no adverse effect on the Company, the Trust or the
Holders of the Trust Securities, or does not subject any of them to more than DE
MINIMIS regulatory requirements ("Ministerial Action"), the Company shall pursue
such Ministerial Action in lieu of
11
redemption, and, PROVIDED, FURTHER, that the Company shall have no right to
redeem the Debentures while the Trust is pursuing any Ministerial Action
pursuant to its obligations under the Declaration; PROVIDED such Ministerial
Action can eliminate such Special Event during the 90-Day Period. The Special
Event Redemption Price, plus such accrued and unpaid interest, shall be paid
prior to 12:00 noon, New York time, on the date fixed by the Company for such
redemption or at such earlier time as the Company determines, PROVIDED that the
Company shall deposit with the Trustee an amount sufficient to pay the Special
Event Redemption Price plus such accrued and unpaid interest thereon by 10:00
a.m., New York time, on the date such Special Event Redemption Price is to be
paid.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
Subject to the provisions of Section 3.3 and to the provisions of
Article 3 of the Base Indenture, the Company shall have the right to redeem the
Debentures, in whole or in part at any time on or after ____________, ______.
Any redemption pursuant to this Section 3.2 will be made upon not less than 30
days nor more than 60 days notice to the Holders of the Debentures, at the
following prices (expressed as percentages of the principal amount of the
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 on
____________1 (other than the first period, which will begin on ___________,
_______) of the following years:
Year Redemption Price
---- ----------------
_____ ______%
_____ ______%
_____ ______%
_____ ______%
_____ ______%
_____ ______%
and 100% if redeemed on or after __________ 1, ______.
The Company may not redeem any Debentures unless all accrued and unpaid
interest has been paid on all outstanding Debentures for all quarterly interest
payment periods terminating on or prior to the last Interest Payment Date before
the date of redemption. If Debentures are redeemed on any March 1, June 1,
September 1, or December 1, accrued and unpaid interest shall be payable to
Holders on the relevant record date. The Company shall issue a press release
announcing any redemption pursuant to this Section 3.2.
The Optional Redemption Price plus such accrued and unpaid interest
thereon shall be paid prior to 12:00 noon, New York time, on the date fixed by
the Company for such redemption 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, plus accrued and unpaid
interest thereon, by 10:00 a.m., New York time, on the date such Optional
Redemption Price is to be paid.
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In addition to the foregoing, the Company shall have the right to redeem
the Debentures, in whole or in part, at any time in exchange for Spinoff Company
Debentures or New Debentures in accordance with Section 7.5.
SECTION 3.3. REDEMPTION OF LESS THAN ALL DEBENTURES.
If the Debentures are only partially redeemed, the Debentures will be
redeemed PRO RATA or by lot or by any other method utilized by the Trustee. The
Company may not redeem any Debentures unless all accrued and unpaid interest has
been paid on all of the outstanding Debentures for all quarterly interest
periods terminating on or prior to the last Interest Payment Date before the
date of redemption.
SECTION 3.4. NO SINKING FUND.
The 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.
As long as an Event of Default under Section 6.01(a) of the Base
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 Debentures, to
defer payments of interest by extending the interest payment period of such
Debentures for a period not exceeding 20 consecutive quarters (an "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable on the Debentures; PROVIDED that no Extended
Interest Payment Period may extend beyond the Maturity Date. To the extent
permitted by applicable law, interest, the payment of which has been deferred
during an Extended Interest Payment Period, shall bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). 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, or extend beyond the Maturity Date. At the end of the
Extended Interest Payment Period, the Company shall pay all interest accrued and
unpaid on the Debentures, including any Additional Interest and Compounded
Interest (together, "Deferred Interest") that shall be payable to the Holders of
Debentures in whose names the Debentures are registered in the Security Register
on the first record date after the termination of the Extended Interest Payment
Period. 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 pay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.
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SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Institutional Trustee shall be the only Holder of the
Debentures at the time the Company elects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its election of such Extended Interest Payment Period
one Business Day before the earlier of (i) the date on which Distributions on
the Trust Securities are payable for the first quarter of such Extended Interest
Payment Period, or (ii) the date the Regular Trustees are required to give
notice of the record date or the date such Distributions are payable for the
first quarter of such Extended Interest Payment Period to any national stock
exchange or other organization on which the Trust Preferred Securities are
listed or quoted or to holders of Trust Preferred Securities, but in any event
at least one Business Day before such record date or such payment date.
(b) If the Institutional Trustee shall not be the only Holder of the
Debentures at the time the Company elects an Extended Interest Payment Period,
the Company shall give the Holders of Debentures written notice of its election
of such Extended Interest Payment Period at least 10 Business Days before the
earlier of (i) the Interest Payment Date for the first quarter of such Extended
Interest Payment Period, or (ii) the date the Company is required to give notice
of the record date or the date of such interest payment for the first quarter of
such Extended Interest Payment Period to any national stock exchange or other
organization on which the Debentures are listed or quoted or to Holders of
Debentures.
(c) The quarter in which any notice is given pursuant to
subsections (a) or (b) of this Section 4.2 shall be, and shall be counted as,
one of the 20 quarters permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.
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 during such Extended Interest Payment Period
(a) 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 (i) purchases or
acquisitions of shares of capital stock in connection with any employee benefit
plan or program, director plan or program, dividend reinvestment, stock
repurchase, or other similar plans available to stockholders of the Company, or
any option, warrant, right, or exercisable, exchangeable, or convertible
security outstanding as of __________ __, _____, (ii) as a result of a
reclassification of the Company's capital stock pursuant to the exchange or
conversion provisions of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of its capital stock or the capital securities of a subsidiary
(including a trust such as the Trust), or (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or security being converted or
exchanged), and (b) the Company shall not make any payment of interest,
principal or premium, if any, on, or repay, repurchase or redeem or make any
guarantee payment (other than pursuant to the Guarantee) with respect to, any
debt securities issued by the Company that rank PARI PASSU with or junior to the
Debentures.
14
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES.
In connection with the issuance of the Debentures to the Institutional
Trustee in exchange for the Trust Securities and in connection with the issuance
of the Trust Securities by the Trust to the Company, the Company, in its
capacity as borrower with respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures and the Trust Securities, including fees payable
pursuant to the Underwriting Agreements by and among the Company, the Trust and
the Underwriters named in Schedule I thereto, and compensation of the Trustee
under the Base Indenture in accordance with the provisions of Section 7.06 of
the Base Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization, maintenance and
dissolution 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 its rights as a Holder of Debentures;
(d) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(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 Supplemental Indenture or the Base Indenture or
the removal or resignation of the Trustee pursuant to Section 7.10 of the Base
Indenture, the Company shall pay to the Trustee all amounts accrued to the date
of such termination, removal or resignation.
ARTICLE VI
COVENANTS
SECTION 6.1. COVENANTS AS TO THE TRUST.
If the Institutional Trustee is the Holder of the Debentures, the
Company shall (a) maintain 100% direct or indirect ownership of the Trust Common
Securities; PROVIDED, HOWEVER, that any
15
permitted successor of the Company under the Base Indenture may succeed to the
Company's ownership of the Common Securities, (b) use its reasonable efforts to
cause the Trust (i) to remain a statutory business trust, except in connection
with a distribution of Debentures to the holders of Trust Securities, the
redemption of all of the Trust Securities, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration, and (ii) to continue to be
classified as a grantor trust for United States federal income tax purposes, and
(c) use its reasonable efforts to cause each holder of Trust Securities to be
treated as owning an undivided beneficial interest in the Debentures.
SECTION 6.2. LISTING OR QUOTATION OF DEBENTURES.
If the Debentures are to be distributed to the holders of Trust
Securities upon a Dissolution Event, the Company shall use its reasonable
efforts to arrange to list, or seek approval for quotation of, such Debentures
on any stock exchange or other organization on which the Trust Preferred
Securities are then listed or quoted, if any.
[ARTICLE VII
CONVERSION OF DEBENTURES
SECTION 7.1. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article VII,
the Debentures are convertible, at the option of the Holder thereof, at any time
beginning _________ ___, _____ and prior to the close of business (New York
time) on __________ 1, 20__, (or, in the case of Debentures called for
redemption, prior to the close of business (New York time) on the Business Day
prior to the corresponding redemption date) into that number of fully paid and
nonassessable shares of Common Stock obtained by dividing the principal amount
of the Debentures to be converted by the Conversion Price. For example, the
initial Conversion Price is $________ and thus each Debenture is initially
convertible into ______________ shares of Common Stock (calculated by dividing
the Principal Amount of One Debenture as of the date of this Supplemental
Indenture by the initial Conversion Price). The Conversion Price is subject to
adjustment as described in this Article VII. All calculations under this
Article VII shall be made to the nearest cent or to the nearest 1/l00th of a
share, as the case may be.
SECTION 7.2. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Debentures, the
Holder thereof shall (i) sign and deliver to the Conversion Agent an irrevocable
notice of election to convert ("Conversion Notice") setting forth the principal
amount of Debentures to be converted (which shall equal the Principal Amount of
One Debenture or integral multiples thereof), together with the name or names,
if other than the Holder, in which the shares of Common Stock should be issued
upon conversion, (ii) if such Debentures are definitive Debentures, surrender to
the Conversion Agent the Debentures to be converted, with such endorsements or
transfer documents as requested by the Conversion Agent, and (iii) pay any
transfer or similar tax, if required. In addition, a holder of Trust Securities
may exercise its right under the Declaration to convert such Trust Securities
into Common Stock by delivering to the Conversion Agent an irrevocable
16
conversion request setting forth the information called for by the preceding
sentence and directing the Conversion Agent (i) to exchange such Trust
Securities for a portion of the Debentures held by the Trust (at an exchange
rate of $1 of principal amount of Debentures for each $1 liquidation amount of
Trust Securities) and (ii) to immediately convert such Debentures, on behalf of
such holder, into Common Stock pursuant to this Article VII and, if such Trust
Securities are in definitive form, surrendering such Preferred Security
Certificates or Common Security Certificates, as the case may be, duly endorsed
or assigned to the Trust or in blank. So long as any Trust Preferred Securities
are outstanding, the Trust shall not convert any Debentures except pursuant to a
conversion request delivered to the Conversion Agent by a holder of Trust
Securities.
Accrued but unpaid interest will not be paid in cash on Debentures that
are converted, nor will such accrued interest be converted into additional
shares of Common Stock upon conversion of the Debentures, but such accrued
interest shall be deemed to be paid in full and then returned by the Holder to
the Company as partial consideration for Common Stock received on conversion,
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
Debentures being converted, which shall be deemed to be paid in full.
If any Debentures are converted into shares of Common Stock during the
period from (but excluding) a record date to (and including) the next succeeding
interest payment date, then either (i) if such Debentures have been called for
redemption on a redemption date that occurs during such period, or are to be
redeemed in connection with a Special Event which occurs during such period, the
Company shall not be required to pay interest on such Interest Payment Date in
respect of such Debentures or (ii) if otherwise converted during such period,
such Debentures shall be accompanied by funds equal to the interest payable on
such succeeding Interest Payment Date on the principal amount so converted.
(b) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the day on which the Conversion Notice was
received (the "Conversion Date") by the Conversion Agent from the Holder or from
a holder of the Trust 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 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 Conversion Notice, 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.
(c) The Company's delivery upon conversion of the fixed number of
shares of Common Stock into which the 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 the Maturity
Date of the portion of Debentures so converted and any unpaid
17
interest (including Compounded Interest) accrued on such Debentures at the time
of such conversion.
(d) No fractional shares of Common Stock will be issued as a result
of conversion, but in lieu thereof, the Company shall pay in cash an amount
equal to the same fraction of the Closing Price of such fractional interest on
the Conversion Date, or, if such day is not a Trading Day, on the next Trading
Day. The Company shall pay such cash amount, if any, to the Conversion Agent
and the Conversion Agent in turn will pay such cash amount, if any, to the
Holder of the Debentures or the holder of the Trust Securities so converted, as
appropriate.
(e) In the event of the conversion of any Debenture in part only, a
new Debenture or Debentures for the unconverted portion thereof will be issued
in the name of the Holder thereof upon the cancellation thereof in accordance
with Section 2.08 of the Base Indenture.
(f) In effecting the conversion transactions described in this
Section 7.2, the Conversion Agent is acting as agent of the holders of Trust
Securities (in the exchange of Trust Securities for Debentures) and as agent of
the Holders of Debentures (in the conversion of Debentures into Common Stock),
as the case may be. The Conversion Agent is hereby authorized (i) to exchange
Debentures held by the Trust from time to time for Trust Securities in
connection with the conversion of such Trust Securities in accordance with this
Article VII and (ii) to convert all or a portion of the Debentures into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Article VII and to deliver to the Trust a new Debenture
or Debentures for any resulting unconverted principal amount.
SECTION 7.3. CERTAIN CONVERSION PRICE ADJUSTMENTS.
The Conversion Price shall be adjusted from time to time as follows:
(a) In case the Company shall, while any of the Debentures are
outstanding, (i) pay a dividend or make a distribution with respect to Common
Stock in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, (iii) combine outstanding shares of Common Stock into a smaller number of
shares or (iv) issue by reclassification of shares of Common Stock any shares of
capital stock of the Company, the conversion privilege and the Conversion Price
for the Debentures shall be adjusted so that the Holder of any Debenture
thereafter surrendered for conversion shall be entitled to receive the number of
shares of capital stock of the Company which such Holder would have owned
immediately following such action had such Debenture been converted immediately
prior thereto. An adjustment made pursuant to this subsection (a) shall become
effective immediately after the record date in the case of a dividend or other
distribution and shall become effective immediately after the effective date in
case of a subdivision, combination or reclassification (or immediately after the
record date if a record date shall have been established for such event). If,
as a result of an adjustment made pursuant to this subsection (a), the Holder of
any Debenture thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes or series of capital stock of the Company,
the Board of Directors (whose determination shall be conclusive and shall be
described in a Board Resolution filed with the Trustee) shall determine in good
faith the allocation of the adjusted Conversion Price for the Debentures between
or among shares of such classes or series of capital stock.
18
(b) In case the Company shall, while any of the Debentures are
outstanding, issue rights or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 days after the record date for the
determination of stockholders entitled to receive such rights or warrants (the
"Rights Record Date")) to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of Common Stock on
the Rights Record Date, the Conversion Price for the Debentures shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase would purchase at
such current market price, and of which the denominator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall become effective immediately
after the Rights Record Date. To the extent that shares of Common Stock are not
so delivered after the expiration of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in effect
if such date fixed for the determination of stockholders entitled to receive
such rights or warrants had not been fixed. For the purposes of this
subsection, the number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Company. The Company shall not
issue any rights or warrants in respect of shares of Common Stock held in the
treasury of the Company. In case any rights or warrants referred to in this
subsection in respect of which an adjustment shall have been made shall expire
unexercised within 45 days after the same shall have been distributed or issued
by the Company, the Conversion Price shall be readjusted at the time of such
expiration to the Conversion Price that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.
(c) Subject to the last sentence of this subsection (c), in case the
Company shall, by dividend or otherwise, distribute to all holders of Common
Stock evidences of its indebtedness, shares of any class or series of capital
stock (other than Common Stock), cash or assets or rights or warrants to
subscribe for or purchase any of its securities (excluding any rights or
warrants referred to in subsection (b), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in subsection
(a) of this Section 7.3), 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 effectiveness of the Conversion Price reduction
contemplated by this subsection (c) by a fraction of which the numerator shall
be the Current Market Price per share of the Common Stock on the date fixed for
the payment of such distribution (the "Reference Date") less the fair market
value (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), on the Reference Date, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed or of such
subscription rights or warrants applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common Stock,
such reduction to become effective immediately prior to the opening of business
on the day following the Reference Date; PROVIDED, HOWEVER, that in the event
the numerator shall be less than one, in lieu of the foregoing adjustment,
adequate provision shall be made so that each
19
Holder of Debentures shall have the right to receive upon conversion the amount
of such distribution such Holder would have received had such Holder converted
each Debenture immediately prior to the Reference Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not occurred. If the Board of Directors
determines the fair market value of any distribution for purposes of this
subsection (c) by reference to the actual or when issued trading market for any
securities comprising such distribution, it must in doing so consider the prices
in such market over the same period used in computing the Current Market Price
per share of Common Stock. For purposes of this subsection (c), any dividend or
distribution that includes shares of Common Stock or rights or warrants to
subscribe for or purchase shares of Common Stock shall be deemed instead to be
(i) a dividend or distribution of the evidences of indebtedness, shares of
capital stock, cash or assets other than such shares of Common Stock or such
rights or warrants (making any Conversion Price reduction required by this
subsection (c) immediately followed by (ii) a dividend or distribution of such
shares of Common Stock or such rights or warrants (making any further Conversion
Price reduction required by subsection (a) or (b)), except (A) the Reference
Date of such dividend or distribution as defined in this subsection (c) shall be
substituted as (1) "the record date in the case of a dividend or other
distribution," and (2) "the record date for the determination of stockholders
entitled to receive such rights or warrants" and (3) "the date fixed for such
determination" within the meaning of subsections (a) and (b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
outstanding for purposes of computing any adjustment of the Conversion Price in
subsection (a).
(d) In case the Company shall pay or make a dividend or other
distribution on the Common Stock exclusively in cash (excluding any quarterly
cash dividend on Common Stock to the extent that the aggregate cash dividend per
share of Common Stock in any quarter does not exceed the greater of (i) the
amount per share of Common Stock of the next preceding quarterly dividend on
Common Stock to the extent such preceding quarterly dividend did not require an
adjustment of the Conversion Price pursuant to this subsection (d) (as adjusted
to reflect subdivisions or combinations of Common Stock), and (ii) ____ % of the
Current Market Price per share, and excluding any dividend or distribution in
connection with the liquidation, dissolution or winding-up of the Company), 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 effectiveness of the Conversion Price reduction contemplated by this
subsection (d) by a fraction of which the numerator shall be the Current Market
Price per share of Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed (and not excluded as
provided above) applicable to one share of Common Stock and the denominator
shall be such Current Market Price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; PROVIDED,
HOWEVER, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market Price
per share of Common Stock on the record date mentioned above, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder of
Debentures shall have the right to receive upon conversion the amount of cash
such Holder would have received had such Holder converted each Debenture
immediately prior to the record date for the distribution of the cash. If an
20
adjustment is required to be made pursuant to this subsection (d) as a result of
a distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded as provided above. If an adjustment is
required to be made pursuant to this subsection (d) as a result of a
distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such record
date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary of the Company for all or any portion of
the Common Stock shall expire and such tender or exchange offer shall involve
the payment by the Company or such Subsidiary of consideration per share of
Common Stock having a fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution) at the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended) that exceeds the Closing Price of the Common Stock on the Trading Day
next succeeding the Expiration Time, 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 effectiveness of the Conversion Price
reduction contemplated by this subsection (e) by a fraction (which shall not be
greater than one) of which the numerator shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) at the Expiration
Time multiplied by the Closing Price of Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the sum of (i) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders 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 (ii) the product of the number of shares of the Common Stock outstanding
(less any Purchased Shares) at the Expiration Time and the Closing Price of
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become retroactively effective immediately prior to the opening of
business on the day following the Expiration Time.
(f) In case a tender or exchange offer made by a Person other than
the Company or any Subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer shall involve the
payment by a Person other than the Company or any Subsidiary of the Company of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) at the applicable Expiration
Time that exceeds the Closing Price of the Common Stock on the Trading Day next
succeeding the applicable Expiration Time in which as of the closing date of the
offer the Board of Directors of the Company is not recommending rejection of the
offer, 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 effectiveness of the Conversion Price reduction contemplated by this
subsection (f) by a fraction (which shall not be greater than one) of which the
numerator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares)
21
at the Expiration Time multiplied by the Closing Price of the Common Stock on
the Trading Day next succeeding the Expiration Time and the denominator shall be
the sum of (i) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the Purchased Shares and (ii) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
retroactively effective immediately prior to the opening of business on the day
following the Expiration Time; PROVIDED, HOWEVER, that the reduction of the
Conversion Price contemplated by this subsection (f) will only be made if the
tender offer or exchange offer is made for an amount that increases that
Person's ownership of Common Stock to more than 25% of the total shares of
Common Stock outstanding and PROVIDED, FURTHER, that the reduction of the
Conversion Price contemplated by this subsection (f) will not be made if as of
the close of the offer, the offering documents with respect to such offer
disclose a plan or an intention to cause the Company to engage in a
consolidation or merger of the Company or a sale of all or substantially all of
the assets of the Company.
(g) The Company may make such reductions in the Conversion Price, in
addition to those required by subsections (a) through (f), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. The Company, at its option, may from
time to time reduce the Conversion Price by any amount for any period of time if
the period is at least 20 days, the reduction is irrevocable during the period,
and the Board of Directors shall have made a determination in good faith that
such reduction would be in the best interest of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to Holders of record of the
Debentures a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period it will be in effect.
(h) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1 % in the
Conversion Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this subsection (h) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
(i) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of Debentures.
SECTION 7.4. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
(a) In the event that the Company shall be a party to (i) any
recapitalization or reclassification of the Common Stock (other than a change in
par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination of the
22
Common Stock), (ii) any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger that 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, (iv) any
compulsory share exchange, or (v) any other transaction, in any such case
pursuant to which shares of Common Stock shall be converted into the right to
receive other securities, cash or other property, then lawful provision shall be
made as part of the terms of such transaction whereby the Holder of each
Debenture then outstanding shall have the right thereafter to convert such
Debenture only into:
(A) in the case of any such transaction that does not
constitute a Common Stock Fundamental Change and subject to funds being legally
available for such purpose under applicable law at the time of such conversion,
the kind and amount of the securities, cash and/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 issuable upon conversion of such Debenture
immediately prior to such recapitalization, reclassification, consolidation,
merger, sale, transfer or share exchange, after giving effect, in the case of
any such transaction that is a Non-Stock Fundamental Change, to any adjustment
in the Conversion Price in accordance with clause (i) of subsection (c) of this
Section 7.4; and
(B) in the case of any such transaction that constitutes a
Common Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an amount of
shares of common stock of such kind equal to the Principal Amount of One
Debenture divided by the Conversion Price as adjusted in accordance with clause
(ii) of subsection (c) of this Section 7.4.
(b) The company or the Person (i) formed by such consolidation,
(ii) resulting from such merger, (iii) that acquired such assets or the shares
of the Common Stock or (iv) that is the issuer of the securities into which the
Common Stock was converted into the right to receive, as the case may be, shall
make provision in its certificate or articles of incorporation or other
constituent document to establish the rights set forth in this Section 7.4.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments that, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document
(or the amendment thereto), 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 transactions of the foregoing type.
(c) Notwithstanding any other provision of this Section 7.4 to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
will be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price immediately following such Non-Stock Fundamental Change
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 prior adjustments effected pursuant to Section 7.3, and
23
(B) the product of (1) the greater of the Applicable Price or the then
applicable Reference Market Price and (2) a fraction, the numerator of
which shall be the Principal Amount of One Debenture and the denominator
of which shall be (x) the amount of the Optional Redemption Price set
forth in Section 3.2 for the Debentures if the redemption date were the
date of such Non-Stock Fundamental Change (or, for the period from the
date of this Supplemental Indenture through _________, ____, the
twelve-month periods commencing on ___________ 1, _____ and
__________ 1, _____ and the period from __________ 1, ____ to
__________ 1, ______, the product of ______, _______, _____ and _______,
respectively, multiplied by the Principal Amount of One Debenture) plus
(y) any then-accrued and unpaid interest on the Principal Amount of One
Debenture to but excluding the date of such Non-Stock Fundamental
Change; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price immediately following such Common Stock Fundamental
Change shall be the Conversion Price in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to Section 7.3, multiplied by a
fraction, the numerator of which is the Purchaser Stock Price 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 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), the Conversion Price 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.
SECTION 7.5. SPINOFF.
(a) In the event that the Company shall distribute, by dividend or
otherwise (the date of which is hereinafter referred to as the "Spinoff
Distribution Date") to all holders of the Common Stock shares of capital stock
("Spinoff Company Stock") of any subsidiary of the Company or any other
corporation controlled by the Company and formed for the purpose of facilitating
the transaction described in this paragraph (the "Spinoff Company") (such
transaction, a "Spinoff"), then at the option of the Company, subject to
Section 7.5(b), the Company shall:
(i) exchange all, but not less than all, of the Debentures
for new Debentures of the Spinoff Company ("Spinoff Company Debentures")
having the same Principal Amount of One Debenture, interest rate,
accrued and unpaid interest, redemption provisions, and conversion
provisions of the Debentures and other terms substantially similar to
those of the Debentures except that (A) upon conversion the Spinoff
Company Debentures shall convert into Spinoff Company Stock, (B) the
conversion price applicable to the Spinoff
24
Company Debentures immediately following such exchange shall be equal to
the product of the Conversion Price in effect immediately prior to such
Spinoff and the Spinoff Ratio, and (C) the reference market price with
respect to such Spinoff Company Debentures shall be equal to the
Reference Market Price in effect immediately prior to such Spinoff
multiplied by the Spinoff Ratio; or
(ii) exchange all, but not less than all, of the Debentures
for:
(A) Spinoff Company Debentures having the same interest rate,
redemption provisions, and conversion provisions of the Debentures and other
terms substantially similar to those of the Debentures except that (1) upon
conversion the Spinoff Company Debentures shall convert into Spinoff Company
Stock, (2) the principal amount of each Spinoff Company Debenture shall be equal
to the product of the Principal Amount of One Debenture immediately prior to
such Spinoff multiplied by the Spinoff Ratio, (3) the conversion price
applicable to the Spinoff Company Debentures immediately following such exchange
shall be equal to the product of the Conversion Price in effect immediately
prior to such Spinoff and the Spinoff Ratio, (4) the reference market price with
respect to such Spinoff Company Debentures shall be equal to the product of the
Reference Market Price in effect immediately prior to such Spinoff and the
Spinoff Ratio, and (5) the accrued and unpaid interest on such Spinoff Company
Debentures immediately following such exchange shall be equal to the amount of
the accrued and unpaid interest, if any, on the Debentures through such date of
exchange multiplied by the Spinoff Ratio; and
(B) new convertible debentures of the Company (the "New
Debentures") having the same interest rate; redemption provisions, and
conversion provisions of the Debentures and other terms substantially similar to
those of the Debentures except that (1) the principal amount of each New
Debenture shall be equal to the product of (x) the Principal Amount of One
Debenture immediately prior to such Spinoff and (y) one minus the Spinoff Ratio,
(2) the conversion price applicable to the New Debentures immediately following
such exchange shall be equal to the product of (x) the Conversion Price in
effect immediately prior to such Spinoff and (y) one minus the Spinoff Ratio,
(3) the reference market price with respect to such New Debentures shall be
equal to the product of (x) the Reference Market Price in effect immediately
prior to such Spinoff and (y) one minus the Spinoff Ratio, and (4) the accrued
and unpaid interest on such New Debentures immediately following such exchange
shall be equal to the product of (x) the amount the accrued and unpaid interest,
if any, on the Debentures through such date of exchange and (y) one minus the
Spinoff Ratio; or
(iii) with respect to all, but not less than all, of the Debentures:
(A) distribute to the Holders thereof Spinoff Company
Debentures having the same interest rate, redemption provisions, and conversion
provisions of the Debentures and other terms substantially similar to those of
the Debentures except that (1) such Spinoff Company Debentures shall be
convertible into Spinoff Company Stock instead of Common Stock, (2) the
principal amount of each Spinoff Company Debenture shall be equal to the product
of the Principal Amount of One Debenture immediately prior to such Spinoff and
the Spinoff Ratio, (3) the conversion price applicable to the Spinoff Company
Debentures immediately following such distribution shall be equal to the product
of the Conversion Price in effect immediately prior
25
to such Spinoff and the Spinoff Ratio, and (4) the reference market price with
respect to such Spinoff Company Debentures shall be equal to the product of the
Reference Market Price in effect immediately prior to such Spinoff and the
Spinoff Ratio, and (5) the accrued and unpaid interest on such Spinoff Company
Debentures immediately following such distribution shall be equal to the amount
the accrued and unpaid interest, if any, on the Debentures through such date of
exchange multiplied by the Spinoff Ratio; and
(B) adjust the terms of the Debentures such that (1) the
Principal Amount of One Debenture shall be equal to the product of (x) the
Principal Amount of One Debenture immediately prior to such Spinoff and (y) one
minus the Spinoff Ratio, (2) the Conversion Price shall be equal to the product
of (x) the Conversion Price in effect immediately prior to such Spinoff and (y)
one minus the Spinoff Ratio, (3) the Reference Market Price shall be equal to
(x) the Reference Market Price in effect immediately prior to such Spinoff
multiplied by (y) one minus the Spinoff Ratio, and (4) the accrued and unpaid
interest thereon shall be equal to (x) the amount the accrued and unpaid
interest, if any, through such date of adjustment multiplied by (y) one minus
the Spinoff Ratio; or
(iv) adjust the Conversion Price by multiplying the Conversion Price
prior to the Spinoff by a fraction, the numerator of which is the Average Stock
Price less the Spinoff Fair Value, and the denominator of which is such Average
Stock Price;
(b) The options of the Company in the event of a Spinoff as set forth
in subsection (a) of this Section 7.5, shall be subject to the following
provisions:
(i) The Company shall have the option described in
subsection (a)(i) of this Section 7.5 only if the Spinoff Company will,
as determined in good faith by the Board of Directors prior to the
Spinoff Distribution Date, have consolidated net assets in an amount
greater than 40% of the consolidated net assets of the Company as of the
day immediately prior to the Spinoff Distribution Date;
(ii) the Company shall have the options described in
subsections (a)(ii) and (a)(iii) of this Section 7.5 only if the Spinoff
Company will, as determined in good faith by the Board of Directors
prior to the Spinoff Distribution Date, have consolidated net assets in
an amount greater than 20% of the consolidated net assets of the Company
as of the day immediately prior to the Spinoff Distribution Date; and
(iii) the Company shall have the options described in
subsections (a)(i), (a)(ii) and (a)(iii) of this Section 7.5 only if
(A) the Spinoff Distribution Date is on or prior to September 1, 20___
and (B) the Company and the Regular Trustees shall have received an
opinion of independent tax counsel experienced in such matters to the
effect that the holders of the Trust Preferred Securities will not be
subject, at the time of such transaction or subsequently thereafter, to
more than a DE MINIMIS amount of taxes, duties or other governmental
charges in connection with the exchange or distribution and adjustment
described therein.
26
(c) In the event the Company shall choose (subject to subsection (b)
of this Section 7.5) to effect an exchange described in subsections (a)(i),
(a)(ii) or (a)(iii) of this Section 7.5:
(i) no less than 20 Business Days prior to the date on which
an exchange of the Debentures or a distribution and adjustment as
contemplated by subsection (a)(iii) above has been completed (the
"Spinoff Exchange Date"), the Company must provide notice to the Holders
of the Debentures of the Spinoff Exchange Date, reasonable detail
concerning relevant adjustments to interest rate, redemption provisions
and conversion provisions, and the kind and amount of the securities
into which such Debentures will be exchanged as a result of the Spinoff;
(ii) the Company shall make provisions, as part of the
Spinoff, to establish the right of the holders of the Debentures to the
securities to be issued in such exchange or a distribution and
adjustment as contemplated by subsection (a)(iii), including, but not
limited to, causing the Spinoff Company to create a trust (the "Spinoff
Company Trust") similar to the Trust for the purpose of issuing the
Spinoff Company Trust Preferred Securities;
(iii) following the Spinoff Exchange Date, except in the case
of the distribution and adjustment described in subsection (a)(iii) of
this Section 7.5, all rights of Holders of Debentures (including, but
not limited to, the right to accrue interest) shall cease, and the
Debentures will no longer be deemed to be outstanding and will only
represent the right to receive the securities to be issued to the
Holders of Debentures in exchange therefor pursuant to the Spinoff;
(iv) following the Spinoff Exchange Date, the Holders of the
Debentures shall be considered the holders of record of any Spinoff
Company Debentures and New Debentures (or in the case of
subsection (a)(iii) of this Section 7.5, the Debentures) for the
purposes of the governing instruments with respect to such securities,
including, but not limited to, any indenture, declaration or certificate
of designations and the Base Indenture, this Supplemental Indenture,
including for the purposes of giving of notice or voting thereunder; and
(v) each Holder of Debentures, by such Holder's acceptance
thereof, agrees to such exchange (or distribution and adjustment) and
the effects thereof as set forth in this Section 7.5(c).
(d) For the purposes of this Section 7.5, the determination of
whether after the Spinoff, the Spinoff Company Debentures or the New Debentures
have terms substantially similar to those of the Debentures prior to the Spinoff
shall be determined in good faith by the Board of Directors (or its successor).
(e) In the event of a Spinoff, the provisions set forth in this
Section 7.5 shall exclusively govern such transaction, and no other adjustment
or change shall be made with respect to the Conversion Price or the securities
to be received by a Holder of Debentures upon
27
conversion due solely to such Spinoff; PROVIDED, HOWEVER, that notice of a
conversion price adjustment pursuant to subsection (a)(iv) of this Section 7.5
shall be given in accordance with Section 7.6, and notice of a Spinoff shall be
given in accordance with Section 7.7. The implementation of any of the
provisions set forth in this Section 7.5 shall not require the approval of
Holders of Debentures.
SECTION 7.6. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Conversion Price or other conversion provisions of the
Debentures are adjusted as provided in this Article VII (other than pursuant to
subsections (a)(i), (a)(ii) or a(iii) of Section 7.5):
(a) 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 Debentures; and
(b) 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
Holders of the Debentures at their last addresses as they appear upon the
securities transfer books of the Company and the Trust.
SECTION 7.7. PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in shares
of Common Stock or (B) a dividend payable in cash that would not require an
adjustment pursuant to Section 7.3(c) or (d) or (ii) authorize a tender or
exchange offer that would require an adjustment pursuant to Section 7.3(e);
(b) the Company shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of
any class or series or of any other rights or warrants;
(c) of any reclassification of Common Stock (other than a subdivision
or combination of the outstanding Common Stock, or a change in par value, or
from par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company shall be required, or of the sale or transfer
of all or substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Stock is converted into other securities, cash
or other property;
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
28
(e) any Spinoff;
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 securities
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 distribution of
Spinoff Company Stock, 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 or distribution of Spinoff Company Stock 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 7.8. CERTAIN PLANS, RIGHTS OR SECURITIES.
Notwithstanding the foregoing provisions, no adjustment of the
Conversion Price shall be made upon (a) the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under any such plan, (b) the issuance
of any shares of Common Stock, or options or rights to purchase shares of Common
Stock pursuant to any present or future employee benefit plan or program, or
present or future director plan or program of the Company or (c) the issuance of
any shares of Common Stock pursuant to any option, warrant, right or
exercisable, exchangeable or convertible security outstanding as of __________,
_____. There shall also be no adjustment of the Conversion Price 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.
SECTION 7.9. PREFERRED STOCK PURCHASE RIGHTS.
(a) So long as Rights of a kind similar to those declared and
distributed by the Board of Directors in January 1990 pursuant to 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 Debentures prior to the earliest of any
Distribution Date, 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(b), upon the earlier to occur of
(i) the eleventh Business Day (as such term is defined in the Rights Agreement)
following a 15% Ownership Date
29
and (ii) a Section 13(a) Event, 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 a Rights
Redemption Date or a Rights Expiration Date has occurred prior to such eleventh
Business Day (as defined in the Rights Agreement) or such Section 13(a) Event,
as the case may be, or unless the Company has taken action pursuant to
Section 7(e) of the Rights Agreement to substitute other consideration for all
or any portion of the Series A Junior Participating Cumulative Preferred Stock
("Series A Stock") otherwise issuable upon exercise of a Right. For purposes of
the reduction of the conversion price provided for in Section 7.3(b) upon such
deemed issuance of rights, each share of Series A 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 Business
Day following such 15% Ownership Date 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(c), if the Company has taken
action pursuant to Section 7(e) of the Rights Agreement to substitute other
consideration for all or any portion of the Series A Stock otherwise issuable
upon exercise of a Right, upon the earlier to occur of (x) the eleventh Business
Day (as defined in the Rights Agreement) following a 15% Ownership Date and (y)
a Section 13(a) Event, then an issuance of Securities shall be deemed to have
occurred, unless a Rights Redemption Date or a Rights Expiration Date has
occurred prior to such eleventh Business Day or such Section 13(a) Event, as the
case may be. For purposes of the reduction of the conversion price provided for
in Section 7.3(c) 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 Business Day following such 15% Ownership Date 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(b) and Section 7.3(c), the redemption
by the Company of Rights shall be deemed to be an expiration of such rights.
(e) In lieu of any adjustment to the Conversion Price as required by
subsections (b), (c) and (f) of this Section 7.9, the Company may amend the
Rights Agreement to provide that upon conversion of Convertible Debentures the
Holder will receive, in addition to the common stock issuable upon conversion,
the Rights that were attached to such shares of Common Stock prior to the
Distribution Date.
(f) If any Debenture has been converted on or after the Distribution
Date and on or before the tenth Business Day (as defined in the Rights
Agreement) following such 15% Ownership Date 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 (b) and (c) of this Section 7.9 is
made, the Company shall issue to the holder of the Debenture so converted a
number of additional shares of Common Stock (and cash in lieu of any fractional
share) that
30
would have been issuable upon such conversion had such adjustment been made
immediately prior to such conversion.
SECTION 7.10. SPECIAL PROVISIONS REGARDING ADJUSTMENT OF CONVERSION PRICE OR
OTHER PROVISIONS.
In the event that the provisions of this Article VII specifying the
methods by which the Conversion Price or other provisions are adjusted would
require an adjustment that is determined in good faith by the Board of Directors
to be inconsistent with the purposes of the provisions hereof providing for
Conversion Price or other adjustments (generally, to place the holders of the
Debenture and the Trust Securities in a position equivalent to the position they
were in prior to the event requiring an adjustment to the Conversion Price or
other provisions), the Board of Directors may make an adjustment (in lieu of
that required pursuant to such provisions) that it determines in good faith to
place the Holders of the Debentures in a position at least equivalent to the
position they were in prior to such event, which determination shall be
described in a Board Resolution.
SECTION 7.11. 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(d)) the Holder of 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 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 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 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 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.
31
SECTION 7.12. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Holder of any Debenture to determine whether
any facts exist which may require any adjustment of the Conversion Price, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or whether this supplemental indenture need be
entered into. Neither the Trustee nor any Conversion Agent shall be accountable
with respect to the validity or value (or the kind of account) of any shares of
Common Stock or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Debenture; and neither the Trustee nor
any Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other securities or property upon the
surrender of any Debenture for the purpose of conversion.]
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT.
(a) In addition to those events set forth in Section 6.01 of the Base
Indenture, "Event of Default" with respect to the Debentures, shall include the
following events:
(i) in the event the Institutional Trustee is the Holder of
the Debentures, the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence
except in connection with (i) the distribution of Debentures to holders
of Trust Securities in liquidation of their interest in the Trust,
(ii) the redemption of all of the outstanding Trust Securities, or
(iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration; and
(ii) the failure by the Company to deliver the Common Stock
upon a valid conversion election by a Holder of Debentures to convert
such Debentures into shares of Common Stock (whether or not such
conversion is prohibited by the subordination provisions set forth in
the Base Indenture).
(b) Notwithstanding any other provision to the contrary, a valid
extension of the interest payment period of the Debentures pursuant to
Section 4.1 shall not constitute a default in the payment of an installment of
interest under Section 6.01(a) of the Base Indenture.
ARTICLE IX
FORM OF DEBENTURE
SECTION 9.1. FORM OF DEBENTURE.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon shall be substantially in the form set forth as Annex I to this
Supplemental Indenture.
32
ARTICLE X
ORIGINAL ISSUE OF DEBENTURES
SECTION 10.1. ORIGINAL ISSUE OF DEBENTURES.
Debentures in the aggregate principal amount of up to $__________ may,
upon or following execution of this 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 Debentures to or
upon the written order of the Company, signed by its Chairman, its Vice
Chairman, its Chief Executive Officer, its Chief Financial Officer, its
President or any Vice President and its Treasurer or an Assistant Treasurer,
without any further action by the Company.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. RATIFICATION OF BASE INDENTURE: SUPPLEMENTAL INDENTURE CONTROLS.
The Base Indenture, as supplemented by this Supplemental Indenture, is
in all respects ratified and confirmed, and this Supplemental Indenture shall be
deemed part of the Base Indenture in the manner and to the extent herein and
therein provided. The provisions of this Supplemental Indenture shall supersede
the provisions of the Base Indenture to the extent the Base Indenture is
inconsistent herewith.
SECTION 11.2. 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
Supplemental Indenture.
SECTION 11.3. GOVERNING LAW.
This Supplemental Indenture and each 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 11.4. SEPARABILITY.
In case any one or more of the provisions contained in this Supplemental
Indenture or in the 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 Supplemental
Indenture or of the Debentures, but this Supplemental Indenture and the
Debentures shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
33
SECTION 11.5. COUNTERPARTS.
This 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.
SECTION 11.6. LIST OF HOLDERS OF SECURITIES.
(a) The Company shall provide the Trustee (i), except while the Trust
Preferred Securities remain in book entry form, at least one Business Day prior
to an Interest Payment Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Debentures ("List of
Holders") as of such record date, provided that the Company shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Institutional
Trustee by the Company and (ii) at any other time, within 30 days of receipt by
the Company of a written request for a list of Holders as of a date no more than
14 days before such List of Holders is given to the Trustee. The Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity) provided that the Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Trustee shall comply with its obligations under Sections
311(b), 311(b) and 312(b) of the Trust Indenture Act.
34
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
UNOCAL CORPORATION
By
--------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By
--------------------------------
Name:
Title:
35
ANNEX I
FORM OF DEBENTURE
[FORM OF FACE OF DEBENTURE]
[IF THE 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 Debenture is exchangeable for 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 Debenture (other than a transfer of this 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) may be registered except in
such limited circumstances.]
[IF THE CLEARING AGENCY IS THE DEPOSITORY TRUST COMPANY, INSERT THE
FOLLOWING OR SUCH OTHER STATEMENT AS THE DEPOSITORY TRUST COMPANY SHALL SPECIFY:
Unless this Debenture is presented by an authorized representative of The
Depository Trust Company, a New York corporation (55 βββββ ββββββ, βββ ββββ, βββ
ββββ), to the issuer or its agent for registration of transfer, exchange or
payment, and any 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 is made to Cede & Co. or to such other entity as
is requested by an authorized representative of The Depository Trust Company),
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. _____________ CUSIP No. _________
UNOCAL CORPORATION
____% JUNIOR [CONVERTIBLE] SUBORDINATED DEBENTURE
Unocal Corporation, 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 __________ 1, 20__, and to pay interest on said principal sum from
___________ __, _____, or from the most recent date on which interest has been
paid in full, quarterly (subject to deferral as set forth herein) in arrears on
March 1, June 1, September 1, and December 1 of each year (each, an "Interest
Payment Date") commencing __________ 1, ____, at the rate of ____% per annum
until the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and overdue installment of interest at the same
rate per annum compounded quarterly (without duplication and to the extent that
payment of such interest is enforceable under applicable law). The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of
1
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 30-day months and,
for periods of less than a month, the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on this
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 Debenture (or one or more Predecessor Debentures) is
registered on the Regular Record Date for such interest installment. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such Regular Record Date and
may be paid to the Person in whose name this Debenture (or one or more
Predecessor Debentures) 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
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 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 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 Debenture. Notwithstanding the foregoing, so
long as the Holder of this Debenture is the Institutional Trustee, the payment
of the principal of (and premium, if any) and interest on this Debenture will be
made at such place and to such account as may be designated by the Institutional
Trustee.
The indebtedness evidenced by this 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 Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his 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 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 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.
2
The provisions of this 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.
UNOCAL CORPORATION
By:
------------------------
Name:
Title:
Attest:
By:
------------------------
Name:
Title:
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in
the within-mentioned Indenture.
Dated:
---------------------
THE BANK OF NEW YORK,
as Trustee or as Authentication Agent
By By
-------------------------- -------------------------
Authorized Signatory Authorized Signatory
3
[FORM OF REVERSE OF DEBENTURE]
This Debenture is one of a duly authorized series of Securities of the
Company specified in the Indenture, all issued or to be issued in one or more
series under and pursuant to an Indenture (the "Base Indenture") dated as of
September 11, 1996, duly executed and delivered between the Company and The Bank
of New York, as Trustee (the "Trustee"), as supplemented by the Second
Supplemental Indenture dated as of ______________, ____, between the Company and
the Trustee (such Second Supplemental Indenture, as it supplements the Base
Indenture, 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 Debentures. By the terms of the Indenture, the
Securities 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 Securities is limited in aggregate principal amount as specified
in said Supplemental Indenture and is herein sometimes referred to as the
"Debentures."
Because of the occurrence and continuation of a Special Event, in
certain circumstances, this Debenture may become due and payable, in whole or in
part, at 100% of the principal amount (the "Special Event Redemption Price")
together with any interest accrued thereon, including Compounded Interest and
Additional Interest to, but excluding the redemption date. The Special Event
Redemption Price plus such accrued and unpaid interest, 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. In addition, the Company shall have the right
to redeem this 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 ___________ 1, ______ at the following prices (expressed as
percentages of the principal amount of the 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 on _________ 1 (other than the first
period, which will begin on __________ 1, _____) of the following years:
Year Redemption Price
---- ----------------
____ ................. ______%
____ ................. ______%
____ ................. ______%
____ ................. ______%
____ ................. ______%
____ ................. ______%
and 100% if redeemed on or after __________1, ____. In the event of a Spinoff,
the Company also has the right to redeem the Debentures, in whole or in part, in
exchange for Spinoff Company Debentures and/or New Debentures, and each Holder,
by its acceptance of the Debenture, agrees to such exchange and the effects of
such exchange as set forth in the Indenture.
4
The Company may not redeem any Debentures unless all accrued and unpaid
interest has been paid on all outstanding Debentures for all quarterly interest
payment periods terminating on or prior to the last Interest Payment Date before
the date of redemption. If Debentures are redeemed on any March 1, June 1,
September 1, or December 1, accrued and unpaid interest shall be payable to
Holders on the relevant record date. The Company shall issue a press release
announcing any Optional Redemption.
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed PRO RATA.
In the event of redemption of this Debenture in part only, a new
Debenture or 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 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 Securities 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 Securities of such
series; PROVIDED, HOWEVER, that no such supplemental indenture shall (a) extend
the fixed maturity of any Securities 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 Securities of any series
or make any change in the subordination provisions that adversely affects the
rights of any Holders of any Securities of any series, without the consent of
the Holder of each Debenture so affected, or (b) reduce the aforesaid percentage
of Securities of such series, the Holders of which are required to consent to
any such supplemental indenture, without the consent of the Holders of each
Security 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 Securities of any series at the time outstanding
affected thereby, on behalf of all of the Holders of the Securities 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 Securities of such
series or a failure to convert any Securities of such series in accordance with
its terms upon an election by the Holders thereof. Any such consent or waiver
by the registered Holder of this 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 Debenture and of any Debenture issued in exchange
herefor 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 Debenture.
5
No reference herein to the Indenture and no provision of this 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 Debenture at the time and place and at the rate and in the
money herein prescribed.
As long as an Event of Default under Section 6.01(a) of the Base
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 Debentures, to
defer payments of interest by extending the interest payment period of the
Debentures for a period not exceeding 20 consecutive quarters (an "Extended
Interest Payment Period") during which Extended Interest Payment Period no
interest shall be due and payable on the Debentures; PROVIDED, that no Extended
Interest Payment Period may extend beyond the Maturity Date. To the extent
permitted by applicable law, interest, the payment of which has been deferred
during an Extended Interest Payment Period, shall bear interest thereon at the
rate specified for these Debentures, compounded quarterly for each quarter of
the Extended Interest Payment Period ("Compounded Interest"). 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, or extend beyond
the Maturity Date. At the end of the Extended Interest Payment Period, the
Company shall pay all interest then accrued and unpaid on the Debentures,
including any Additional Interest and Compounded Interest, that shall be payable
to the Holders of Debentures on the first record date after the termination of
the Extended Interest Payment Period. Upon the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and unpaid interest
(including Compounded Interest to the extend permitted by applicable law), the
Company may commence a new Extended Interest Payment Period. The Company may
pay at any time all or any portion of the interest accrued during an Extended
Interest Payment Period, subject to the requirements set forth in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this 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 or her attorney duly authorized in writing, and
thereupon one or more new 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 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 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
6
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 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.
Subject to and upon compliance with Article VII of the Supplemental
Indenture, the Holder of this Debenture has the right, exercisable at any time
beginning _______ __, _____ and prior to the close of business (New York time)
on ____________ 1, 20__ (or, in the event this Debenture is called for
redemption, prior to the close of business (New York time) on the Business Day
prior to the corresponding redemption date), to convert the principal amount
hereof (or any portion thereof that is an integral multiple of the Principal
Amount of One Debenture) into that number of fully paid and nonassessable shares
of Common Stock obtained by dividing the principal amount of the Debentures to
be converted by the Conversion Price in effect on the Conversion Date. For
example, the initial Conversion Price is $__.__ and thus each Debenture is
initially convertible into 1. __ shares of Common Stock (calculated by dividing
the Principal Amount of One Debenture as of the date of the Supplemental
Indenture by the initial Common Price). The Conversion Price is subject to
adjustment as described in the Indenture. All conversion price and conversion
provision calculations shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be.
To convert all or a portion of this Debenture, a Holder must
(a) complete and sign an irrevocable notice of election to convert substantially
in the form attached hereto and deliver such Conversion Notice to the Conversion
Agent, (b) surrender the Debenture to the 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. Accrued but unpaid
interest will not be paid in cash on Debentures that are converted, nor will
such accrued interest be converted into additional shares of Common Stock upon
conversion of the Debentures, but such accrued interest shall be deemed to be
paid in full and then returned by the Holder to the Company as partial
consideration for Common Stock received on conversion, 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 Debentures being converted, which
shall be deemed to be paid in full. If any Debentures are converted during the
period from (but excluding) a record date to (and including) the next succeeding
interest payment date, then either (i) if such Debentures have been called for
redemption on a redemption date that occurs during such period, or are to be
redeemed in connection with a Special Event which occurs during such period, the
Company shall not be required to pay interest on such Interest Payment Date in
respect of such Debentures or (ii) if otherwise converted during such period,
such Debentures shall be accompanied by funds equal to the interest payable on
such succeeding Interest Payment Date on the principal amount so converted.
7
No fractional shares will be issued upon conversion but a cash payment
shall be made by the Company in lieu of such fractional interest. The
outstanding principal amount of any Debenture shall be reduced by the principal
amount thereof converted into shares of Common Stock.
The Company's delivery upon conversion of the fixed number of shares of
Common Stock into which the Debentures are convertible (together with cash in
lieu of fractional shares) shall be deemed to satisfy the Company's obligation
to pay the principal amount at the Maturity Date of the portion of Debentures so
converted and any unpaid interest (including Compounded Interest) accrued on
such Debentures at the time of such conversion.
The Debentures of this series are issuable only in registered form
without Coupons in denominations of the Principal Amount of One Debenture and
any integral multiple thereof. [IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE,
SUBSTITUTE THE FOLLOWING FOR THE PREVIOUS SENTENCE: This Global Debenture is
exchangeable for Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. Debentures of this series so issued
are issuable only in registered form without Coupons in denominations of the
Principal Amount of One Debenture and any integral multiple thereof.) As
provided in the Indenture and subject to certain limitations therein set forth,
Debentures of this series are exchangeable for a like aggregate principal amount
of Debentures of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
All terms used in this 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 DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
8
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Unocal Corporation
The undersigned Holder of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion below designated, into
Common Stock of UNOCAL CORPORATION in accordance with the terms of the Indenture
referred to in this 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 ____ in part __
Portion of principal amount of the
Debenture to be converted (the
Principal Amount of One Debenture
or integral multiples thereof):
$
-------------------
----------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other
Identifying Number
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Signature Guarantee:(1)
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-------------------------
(1) Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934, as
amended.
9
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
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--------------------------------------------------------------------------------
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(Insert assignee's social security or tax identification number)
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(Insert address and zip code of assignee)
and irrevocably appoints
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agent to transfer this 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 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 Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Debenture Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities and Exchange Act of 1934, as amended.
10