EXHIBIT 4.10
UNOCAL CORPORATION
AS ISSUER
AND
THE BANK OF NEW YORK
AS TRUSTEE
___% JUNIOR [CONVERTIBLE] SUBORDINATED DEBENTURES
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF ____________, _____
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.............................................................7
Section 2.2. Maturity.....................................................................................7
Section 2.3. Form and Payment.............................................................................7
Section 2.4. Global Debenture.............................................................................7
Section 2.5. Interest.....................................................................................8
ARTICLE III
Redemption of the Debentures
Section 3.1. Special Event Redemption.....................................................................9
Section 3.2. Optional Redemption by Company..............................................................10
Section 3.3. Redemption of Less Than All Debentures......................................................11
Section 3.4. No Sinking Fund.............................................................................11
ARTICLE IV
Extension of Interest Payment Period
Section 4.1. Extension of Interest Payment Period........................................................11
Section 4.2. Notice of Extension.........................................................................11
Section 4.3. Limitation of Transactions..................................................................12
ARTICLE V
Expenses
Section 5.1. Payment of Expenses.........................................................................13
Section 5.2. Payment Upon Resignation or Removal.........................................................13
ARTICLE VI
Covenants
Section 6.1. Covenants as to the Trust...................................................................13
Section 6.2. Listing or Quotation of Debentures..........................................................14
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ARTICLE VII
Conversion of Debentures
Section 7.1. Conversion Rights...........................................................................14
Section 7.2. Conversion Procedures.......................................................................14
Section 7.3. Certain Conversion Price Adjustments........................................................16
Section 7.4. Merger, Consolidation, or Sale of Assets....................................................20
Section 7.5. Notice of Adjustments of Conversion Price...................................................22
Section 7.6. Prior Notice of Certain Events..............................................................22
Section 7.7. Certain Plans, Rights or Securities.........................................................23
Section 7.8. Preferred Stock Purchase Rights.............................................................23
Section 7.9. Special Provisions Regarding Adjustment of Conversion Price or Other Provisions.............24
Section 7.10. Certain Additional Rights...................................................................24
Section 7.11. Trustee Not Responsible for Determining Conversion Price or Adjustments.....................25
ARTICLE VIII
Events of Default
Section 8.1. Events of Default...........................................................................25
ARTICLE IX
Supplemental Debentures
Section 9.1. Supplemental Debentures with Consent of Holders.............................................26
ARTICLE X
Form of Debenture
Section 10.1. Form of Debenture...........................................................................26
ARTICLE XI
Original Issue of Debentures
Section 11.1 Original Issue of Debentures................................................................26
ARTICLE XII
Miscellaneous
Section 12.1. Ratification of Base Indenture: Supplemental Indenture Controls.............................26
Section 12.2. Trustee Not Responsible for Recitals........................................................27
Section 12.3. Governing Law...............................................................................27
Section 12.4. Separability................................................................................27
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Section 12.5. Counterparts................................................................................27
Section 12.6. List of Holders of Securities...............................................................27
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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 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; and
(h) 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).
["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.]
"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.
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"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
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(a).
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["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 the Trust is to be dissolved in accordance
with the Declaration, as a result of the occurrence and continuation of a
Special Event or otherwise, 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" has the meaning specified in the Declaration.
"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.
"Distribution Date" has the meaning specified in the Rights Agreement.
["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
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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 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" has the meaning specified in the Declaration.
"Institutional Trustee" means the Institutional Trustee of the Trust.
"Junior Securities," as used in the Base Indenture, 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 12.6.
"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 the Declaration.
"1996 Debentures" means the Company's 6-1/4% Convertible Junior
Subordinated Debentures due 2026.
"1996 Preferred Securities" means Unocal Capital Trust's 6 1/4% Trust
Convertible Preferred Securities.
"90-Day Period" has the meaning specified in Section 3.1.
"Non Book-Entry Preferred Securities" has the meaning specified in Section
2.4(a)(ii).
["Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.]
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"No Recognition Opinion" has the meaning specified in the Declaration.
"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.
["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" has the meaning specified 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, 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 7.8.
"Rights Agreement" shall mean that certain Rights Agreement dated as or
January 5, 2000 by and between the Company and the Rights Agent (as defined
therein), as amended as of March 27 and August 2, 2002, as it may be amended,
restated, supplemented and/or modified from time to time.
"Rights Expiration Date" shall mean the "Final Expiration Date" as defined
in the Rights Agreement.
["Rights Record Date" has the meaning specified in Section 7.3(b).]
"Rights Redemption Date" shall mean the "Redemption Date" as defined in
the Rights Agreement.
"Section 13 Event" has the meaning specified in Section 7.8(b).
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"Series B Stock" has the meaning specified in Section 7.8(b).
"Special Event" means a Tax Event or an Investment Company Event.
"Special Event Redemption Price" has the meaning specified in Section 3.1.
"Supplemental Indenture" has the meaning specified in the first paragraph
hereof.
"Tax Event" has the meaning specified in the Declaration.
"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.
"Trust" has the meaning specified in the Recitals.
"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 (as defined in the Base Indenture) 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 (as defined in the Base Indenture) at such
address as shall appear in the Security Register (as defined in the Base
Indenture). 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,
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(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 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 (as defined in the Base Indenture) 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 (as defined in the Base Indenture), at the close of
business on the record date for such Interest Payment Date, which record date
(the "Regular Record Date") shall be, (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, 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
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(i), such Regular Record Date as the Company may select for such interest
installment, which shall be any date at least one Business Day before an
Interest Payment Date.
(b) The amount of interest payable for any 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,
the Company shall pursue such Ministerial Action in lieu of redemption, and,
provided, further, that the Company shall have no right to redeem the
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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
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interest thereon, by 10:00 a.m., New York time, on the date such Optional
Redemption Price is to be paid.
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.
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
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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), (iii) any declaration of a
dividend in connection with the implementation of a shareholder's rights plan,
or the issuance of shares under any such plan, or the redemption or repurchase
of any rights issued thereunder, or (iv) 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 the 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, if otherwise permitted under the
Company's preferred securities guarantee of the 1996 Preferred Securities , or
pursuant to such guarantee of the 1996 Preferred Securities) with respect to,
any debt securities issued by the Company that rank pari passu with or junior in
right of payment to the Debentures (other than the 1996 Debentures).
-12-
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 any underwriting agreements by and among the Company, the Trust and
the underwriters named therein, 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 7.9 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
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 trust, except in connection with a
distribution of Debentures to the holders of Trust Securities, the redemption of
all of the Trust
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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 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
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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 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.
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(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 (as defined in the Base Indenture) (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.
(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
-16-
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 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
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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
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
-18-
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) 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
-19-
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 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
-20-
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 (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
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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. Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as provided in this Article VII:
(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 7.6. 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; or
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(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company;
then the Company shall (i) if any Trust Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Trust Preferred Securities,
and shall cause to be mailed to the holders of record of the Trust Preferred
Securities, at their last addresses as they shall appear upon the 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, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
Section 7.7. 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 7.8. 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 2000 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 per such
share of Common Stock in a number equal to the number of Rights then attached to
each 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 Shares Acquisition Date and (ii) an event described in Section 13 of
the Rights Agreement (a "Section 13 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,
-23-
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 Event, as the case may be. 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 B Junior Participating Preferred Stock of the
Company (the "Series B 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
Shares Acquisition Date or the date of such Section 13 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 purposes of Section 7.3(b), the redemption by the Company of
Rights shall be deemed to be an expiration of such rights.
(d) In lieu of any adjustment to the Conversion Price as required by
subsections (b) and (e) of this Section 7.8, the Company may amend the Rights
Agreement to provide that upon conversion of 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.
(e) 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 Shares Acquisition Date or the date of such Section 13
Event, as the case may be, then as soon as practicable following the date on
which the adjustment required by subsection (b) of this Section 7.8 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 would have been issuable upon such conversion had such adjustment been made
immediately prior to such conversion.
Section 7.9. 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 7.10. 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
-24-
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 xxxx 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 xxxx
(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.
Section 7.11. 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)
-25-
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
Supplemental Indentures
Section 9.1. Supplemental Indentures with Consent of Holders. In addition
to the provisions of Section 10.02 of the Base Indenture, the following shall
apply: no supplemental indenture shall make any change in the subordination
provisions of the Indenture that adversely affects the rights of any Holders of
any Securities of any series in any material respect, without the consent of the
Holder of each Debenture so affected.
ARTICLE X
Form of Debenture
Section 10.1. 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.
ARTICLE XI
Original Issue of Debentures
Section 11.1. 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 XII
Miscellaneous
Section 12.1. 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
-26-
Indenture shall supersede the provisions of the Base Indenture to the extent the
Base Indenture is inconsistent herewith.
Section 12.2. 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 12.3. 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 12.4. 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.
Section 12.5. 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 12.6. 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.
-27-
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:
-00-
XXXXX X
XXXX XX XXXXXXXXX
[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 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx), 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 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.
-2-
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.
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:
-3-
[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
-4-
[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 be redeemed by the Company, in whole or in
part, at 100% of the principal amount to be redeemed (the "Special Event
Redemption Price") together with any accrued and unpaid interest, including
Compounded Interest and Additional Interest, thereon 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, ____.
-5-
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 in
any material respect, 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 therefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
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.
-6-
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 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
-7-
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.
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.]
-8-
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.
-9-
[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
_______________________________________
_______________________________________
_______________________________________
Signature Guarantee:(*)
_______________________________________
-10-
(*) 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.
-11-
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture
to:
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Insert assignee's social security or tax identification number)
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________
_____________________________________________________
_____________________________________________________
agent to transfer this 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.
-12-
