EXHIBIT 4.1.1
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THE AES CORPORATION
AND
BANK ONE, NATIONAL ASSOCIATION
as Trustee
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SEVENTH SUPPLEMENTAL INDENTURE
Dated as of May 17, 2000
TO
JUNIOR SUBORDINATED INDENTURE
Dated as of March 1, 1997
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6% Junior Subordinated Debentures
Due 2008
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
GENERAL TERMS AND CONDITIONS OF THE SERIES 6% DEBENTURES
SECTION 1.01. .............................................................3
SECTION 1.02. .............................................................3
SECTION 1.03. .............................................................4
SECTION 1.04. .............................................................6
ARTICLE 2
OPTIONAL REDEMPTION OF THE SERIES 6% DEBENTURES
SECTION 2.01. ............................................................10
SECTION 2.02. ............................................................12
SECTION 2.03. ............................................................13
ARTICLE 3
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 3.01. ............................................................14
SECTION 3.02. ............................................................15
SECTION 3.03. ............................................................15
ARTICLE 4
COVENANTS APPLICABLE TO SERIES 6% DEBENTURES
SECTION 4.01. ............................................................15
SECTION 4.02. ............................................................16
SECTION 4.03. ............................................................16
SECTION 4.04. ............................................................16
ARTICLE 5
CONVERSION OF DEBENTURES
SECTION 5.01. ............................................................16
SECTION 5.02. ............................................................17
SECTION 5.03. ............................................................19
SECTION 5.04. ............................................................27
SECTION 5.05. ............................................................31
PAGE
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SECTION 5.06. ............................................................33
SECTION 5.07. ............................................................33
SECTION 5.08. ............................................................34
ARTICLE 6
FORM OF SERIES 6% DEBENTURES
SECTION 6.01. ............................................................34
ARTICLE 7
ORIGINAL ISSUE OF SERIES 6% DEBENTURES
SECTION 7.01. ............................................................49
ARTICLE 8
MISCELLANEOUS PROVISIONS
SECTION 8.01. ............................................................49
SECTION 8.02. ............................................................49
SECTION 8.03. ............................................................49
SECTION 8.04. ............................................................49
The SEVENTH SUPPLEMENTAL INDENTURE, dated as of the 17th day of May, 2000
(the "Seventh Supplemental Indenture"), between THE AES CORPORATION, a
corporation duly organized and existing under the laws of the State of Delaware
(hereinafter sometimes referred to as the "Company") and BANK ONE, NATIONAL
ASSOCIATION, a national banking association, as trustee (hereinafter sometimes
referred to as the "Trustee") under the Junior Subordinated Indenture dated as
of March 1, 1997 between the Company and the Trustee (the "Indenture") (except
as otherwise set forth herein, all terms used and not defined herein are used
as defined in the Indenture or in the Declaration of Trust);
WHEREAS, the Company executed and delivered the Indenture to the Trustee
to provide for the future issuance of its junior subordinated securities (the
"Debentures"), said Debentures to be issued from time to time in series as
might be determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered thereunder
as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Debentures to be known as
its 6% Junior Subordinated Debentures due 2008 (said series being hereinafter
referred to as the "Series 6% Debentures"), the form and substance of such
Series 6% Debentures and the terms, provisions and conditions thereof to be set
forth as provided in the Indenture and this Seventh Supplemental Indenture; and
WHEREAS, the Company has caused to be formed AES Trust VII ("AES Trust
VII" or the "Trust") as a statutory business trust under the Business Trust Act
of the State of Delaware (12 Del. Code ss. 3801 et seq.) pursuant to a
declaration of trust dated May 10, 2000 (the "Original Declaration") and the
filing of a restated certificate of trust with the Secretary of State of the
State of Delaware on May 10, 2000; and
WHEREAS, the Original Declaration is to be amended and restated in its
entirety pursuant to an Amended and Restated Declaration of Trust dated as of
May 17, 2000 (such Amended and Restated Declaration of Trust, as amended from
time to time, the "Declaration of Trust"); and
WHEREAS, AES Trust VII desires to issue its $3.00 Trust Convertible
Preferred Securities (the "Preferred Securities") and sell such Preferred
Securities to initial purchasers; and
WHEREAS, in connection with such purchases of Preferred Securities and the
related purchase by the Company of the Common Securities (as defined in the
Declaration of Trust) of AES Trust VII, AES Trust VII will purchase as trust
assets Series 6% Debentures; and
WHEREAS, pursuant to the Declaration of Trust, the legal title to the
Series 6% Debentures shall be owned and held of record in the name of Bank One,
National Association or its successor under the Declaration of Trust, as
Property Trustee (the "Property Trustee"), in trust for the benefit of holders
of the Preferred Securities and the Common Securities; and
WHEREAS, upon the occurrence of a Special Event (as defined in the
Declaration of Trust) the Regular Trustees (as defined in the Declaration of
Trust) of AES Trust VII shall, unless the Series 6% Debentures are redeemed as
described herein, dissolve AES Trust VII and cause to be distributed to the
holders of Preferred Securities and Common Securities, on a pro rata basis
(determined as provided in the terms of the Preferred Securities and Common
Securities attached as Exhibits B and C to the Declaration of Trust), Series 6%
Debentures and, in connection with a Liquidation Distribution (as defined in
the Declaration of Trust), the Regular Trustees may cause to be distributed to
holders of Preferred Securities and Common Securities, on such a pro rata
basis, Series 6% Debentures (each a "Dissolution Event"); and
WHEREAS, the Company desires and has requested the Trustee to join with it
in the execution and delivery of this Seventh Supplemental Indenture, and all
requirements necessary to make this Seventh Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series 6% Debentures
when executed by the Company and authenticated and delivered by the Trustee,
the valid obligations of the Company, have been performed and fulfilled, and
the execution and delivery hereof have been in all respects duly authorized;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Series 6% Debentures by the holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Series 6%
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
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ARTICLE 1
GENERAL TERMS AND CONDITIONS OF THE SERIES 6% DEBENTURES
SECTION 1.01. There shall be and is hereby authorized a series of
Debentures designated the "6% Junior Subordinated Debentures Due 2008", limited
in aggregate principal amount to $412,371,150 (except as provided in this
Section 1.01 and 7.01). Upon exercise of the overallotment option set forth in
the Purchase Agreement (as defined in the Declaration of Trust), additional
Series 6% Debentures in the aggregate principal amount of up to $61,855,650 may
be executed by the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and deliver said Series 6% Debentures
to or upon the written order of the Company, which order shall be accompanied
by evidence satisfactory to the Trustee that the overallotment option has been
exercised. The Series 6% Debentures shall mature and the principal shall be due
and payable together with all accrued and unpaid interest thereon, including
Compounded Interest (as hereinafter defined) on May 15, 2008 (the "Maturity
Date").
SECTION 1.02. (a) Except as provided in Section 1.02(b), the Series 6%
Debentures shall be issued in fully registered certificated form without
interest coupons in denominations of $50 or integral multiples thereof.
Principal and interest on the Series 6% Debentures issued in certificated form
will be payable, the transfer of such Series 6% Debentures will be registrable
and such Series 6% Debentures will be exchangeable for Series 6% Debentures
bearing identical terms and provisions at the office or agency of the Company
in the Borough of Manhattan, The City and State of New York; 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
Debenture register and that the payment of principal with respect to the Series
6% Debentures will only be made upon surrender of the Series 6% Debentures to
the Trustee. Notwithstanding the foregoing, so long as the Property Trustee is
the legal owner and record holder of the Series 6% Debentures, the payment of
the principal of and interest (including Compounded Interest, if any) on the
Series 6% Debentures held by the Property Trustee will be made by the Company
in immediately available funds on the payment date therefor at such place and
to the Property Account (as defined in the Declaration of Trust) established
and maintained by the Property Trustee pursuant to the Declaration of Trust.
(b) In connection with a Dissolution Event:
(i) Series 6% Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a Global Debenture
representing the Series 6% Debentures in an aggregate principal amount
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equal to all Outstanding Series 6% Debentures, to be registered in the
name of the Depositary, or its nominee, and delivered by the Trustee to
the Depositary for crediting to the accounts of its participants pursuant
to the instructions of the Regular Trustees (as defined in the Declaration
of Trust). The Company upon any such presentation shall execute a Global
Debenture representing the Series 6% Debentures in such aggregate
principal amount and deliver the same to the Trustee for authentication
and delivery in accordance with the Indenture and this Seventh
Supplemental Indenture. Payments on the Series 6% Debentures issued as a
Global Debenture will be made to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, Series 6% Debentures in certificated form may be
presented to the Trustee by the Property Trustee and any Preferred
Security Certificate (as defined in the Declaration of Trust) which
represents Preferred Securities other than Preferred Securities held by
the Clearing Agency (as defined in the Declaration of Trust) or its
nominee ("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in Series 6% Debentures presented to the
Trustee by the Property Trustee having an aggregate principal amount equal
to the aggregate liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security Certificate is presented to the
Debenture Registrar for transfer or reissuance at which time such
Preferred Security Certificate will be canceled and a Series 6% 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 Indenture and this Seventh
Supplemental Indenture. On issue of such Series 6% Debentures, Series 6%
Debentures with an equivalent aggregate amount that were presented by the
Property Trustee to the Trustee will be deemed to have been canceled.
(c) In addition to the events listed in Section 2.11(c) of the Indenture,
Global Debentures, as defined in the Indenture, if and when issued pursuant to
the terms hereof, will be exchanged by the Company for Series 6% Debentures in
definitive registered certificated form, without coupons, in accordance with
Section 2.11(c) of the Indenture, in the event that an Event of Default, as
defined in the Indenture, has occurred with respect to the Series 6%
Debentures.
SECTION 1.03. Each Series 6% Debenture will bear interest at the rate of
6% per annum from May 17, 2000 until the principal thereof becomes due and
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payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, compounded quarterly, payable (subject to
the provisions of Article Three) on February 15, May 15, August 15 and November
15 of each year (each an "Interest Payment Date"), commencing on August 15,
2000, to the person in whose name such Series 6% Debenture or any predecessor
Series 6% Debenture is registered, at the close of business on the regular
record date for such interest installment, which, except as set forth below,
shall be, in respect of any Series 6% Debentures of which the Property Trustee
is the registered holder of a Global Debenture, the close of business on the
business day next preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if the Preferred Securities are no longer in book-entry
only form or if pursuant to the provisions of Section 2.11(c) of the Indenture
the Series 6% Debentures are not represented by a Global Debenture, the regular
record dates for such interest installment shall be the close of business on
the first day of the month in which that Interest Payment Date occurs. 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 the Series 6% 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 Series
6% 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 Series 6% Debentures may
be listed, if any, and upon such notice as may be required by such exchange, if
any, all as more fully provided in the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on the Series 6% Debentures is not a business day,
then payment of interest payable on such date will be made on the next
succeeding day which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, 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 Series 6% Debentures are not subject to any sinking fund.
If at any time AES Trust VII shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the U.S., or any other taxing authority, then, in any such
case, the Company will pay as additional interest ("Additional Interest") on
the Series 6% Debentures such additional amounts as shall be required so that
the net
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amounts received and retained by AES Trust VII after paying any such taxes,
duties, assessments or other governmental charges will be equal to the amounts
AES Trust VII would have received had no such taxes, duties, assessments, or
other governmental charges been imposed.
SECTION 1.04. If distributed to holders of Preferred Securities in
connection with a Dissolution Event, the Series 6% Debentures will be issued to
such holders in the same form as the Preferred Securities that such Series 6%
Debentures replace in accordance with the following procedures:
So long as Series 6% Debentures are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Series 6%
Debentures that are so eligible may be represented by one or more Series 6%
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary, except as otherwise specified below. The transfer
and exchange of beneficial interests in any such Series 6% Debenture in global
form shall be effected through the Depositary in accordance with this Indenture
and the procedures of the Depositary therefor.
Series 6% Debentures that are distributed to "qualified institutional
buyers" within the meaning of Rule 144A ("QIBs") under the Securities Act of
1933, as amended (the "Securities Act") in replacement of Preferred Securities
represented by a global Preferred Security will be represented by one or more
global Series 6% Debentures (the "144A Global Debenture" or a "Global
Debenture"). Series 6% Debentures that are distributed to QIBs in replacement
of Certificated Preferred Securities will be represented by definitive Series
6% Debentures as set forth in this Section 1.04.
Except as provided below, beneficial owners of a Series 6% Debenture in
global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Series 6% Debentures in global form. Preferred Securities held in certificated
form, except for certificates representing Preferred Securities held by the
Depositary or its nominee (or any successor Clearing Agency or its nominee),
shall upon presentation to the Trustee by the Property Trustee or by the holder
thereof or by the Property Trustee on behalf of such holders shall be exchanged
for Series 6% Debentures in fully registered certificated form of like
aggregate principal amount and tenor.
So long as the Series 6% Debentures are eligible for book-entry
settlement, and to the extent that Series 6% Debentures are held by QIBs in a
Global Debenture, or unless otherwise required by law, upon any transfer of a
definitive Series 6% Debenture to a QIB in accordance with Rule 144A, unless
6
otherwise requested by the transferor, and upon receipt of the definitive
Series 6% Debenture or Series 6% Debentures being so transferred, together with
a certification from the transferor that the transfer is being made in
compliance with Rule 144A (or other evidence satisfactory to the Trustee), the
Trustee shall make an endorsement on any 000X Xxxxxx Xxxxxxxxx, to reflect an
increase in the aggregate principal amount of the Series 6% Debentures
represented by such Global Debenture, and the Trustee shall cancel such
definitive Series 6% Debenture or Series 6% Debentures in accordance with the
standing instructions and procedures of the Depositary, the aggregate principal
amount of Series 6% Debentures represented by such Global Debenture to be
increased accordingly; provided that no definitive Series 6% Debenture, or
portion thereof, in respect of which the Company or an Affiliate of the Company
held any beneficial interest shall be included in such Global Debenture until
such definitive Series 6% Debenture is freely tradable in accordance with Rule
144(k); provided further that the Trustee shall, at the written request of the
Company, issue Series 6% Debentures in definitive form upon any transfer of a
beneficial interest in the Global Debenture to the Company or any Affiliate of
the Company.
Any Global Debenture may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Depositary, or by the
National Association of Securities Dealers, Inc. in order for the Series 6%
Debentures to be tradeable on the PORTAL Market or as may be required for the
Series 6% Debentures to be tradeable on any other market developed for trading
of securities pursuant to Rule 144A or required to comply with any applicable
law or any regulation thereunder or with the rules and regulations of any
securities exchange upon which the Series 6% Debentures may be listed or
traded, if any, or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Series
6% Debentures are subject.
Each Debenture that bears or is required to bear the legend set forth in
this Section 1.04 (a "Restricted Security") shall be subject to the
restrictions on transfer provided in the legend set forth in this Section 1.04,
unless such restrictions on transfer shall be waived by the written consent of
the Company, and the Holder of each Restricted Security, by such
securityholder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 1.04, the terms "transfer" encompasses any
sale, pledge, transfer or other disposition of any Restricted Security.
Prior to the Transfer Restriction Termination Date (as defined in the
Declaration of Trust), any certificate evidencing a Series 6% Debenture or
Common Stock issued upon the conversion or exchange of any Series 6%
7
Debenture shall bear a legend in substantially the following form, unless
otherwise agreed by the Company (with written notice thereof to the Trustee):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT),
(2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO AES OR ANY SUBSIDIARY THEREOF, (B) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY PRIOR TO THE EXPIRATION DATE OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
TRANSFEROR MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
PROPERTY TRUSTEE.
Following the Transfer Restriction Termination Date or the sale of a
Debenture or Common Stock issued upon the conversion or exchange of a Debenture
pursuant to an effective registration statement or Rule 144 (or any successor
provision) under the Securities Act, any Debenture or security issued in
exchange or substitution therefor (other than (i) Series 6% Debentures acquired
by the Company or any Affiliate thereof since the issue date of the Preferred
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Securities and (ii) Common Stock issued upon the conversion or exchange of any
Debenture described in clause (i) above) may upon surrender of such Debenture
for exchange to the Debenture Registrar in accordance with the provisions of
this Section 1.04, be exchanged for a new Debenture or Series 6% Debentures, of
like tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 1.04.
Notwithstanding any other provisions of the Indenture (other than the
provisions set forth in this Section 1.04), a Global Debenture may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Series 6% Debentures in global form. Initially,
the Global Debentures shall be issued to the Depositary, registered in the name
of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee
as custodian for Cede & Co.
If at any time the Depositary for the Global Debentures notifies the
Company that it is unwilling or unable to continue as Depositary for such
Series 6% Debentures, the Company may appoint a successor Depositary with
respect to such Series 6% Debentures. If a successor Depositary for the Series
6% Debentures is not appointed by the Company within 90 days after the Company
receives such notice, the Company will execute, and the Trustee, upon receipt
of an Officers' Certificate for authentication and delivery of Series 6%
Debentures, will authenticate and deliver, Series 6% Debentures in definitive
form, in an aggregate principal amount equal to the principal amount of the
Global Debentures, in exchange for such Global Debentures.
Definitive Series 6% Debentures issued in exchange for all or a part of a
Global Debenture pursuant to this Section 1.04 shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Series 6% Debentures to the person in whose names such
definitive Series 6% Debentures are so registered.
At such time as all interests in a Global Debenture have been redeemed,
converted, exchanged, repurchased or canceled, such Global Debenture shall be,
upon receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions of the Depositary. At any time prior to such
9
cancellation, if any interest in a Global Debenture is exchanged for definitive
Series 6% Debentures, redeemed by the Company pursuant to Article 2 or
canceled, or transferred for part of a Global Debenture, the principal amount
of such Global Debenture shall, in accordance with the standing procedures and
instructions of the Depositary be reduced or increased, as the case may be, and
an endorsement shall be made on such Global Debenture by, or at the direction
of, the Trustee to reflect such reduction or increase. Following such
redemption by the Company or cancellation, or transfer, the Company will
execute and Trustee will authenticate and make available for delivery to the
transferee (or such transferee's nominee, as the case may be), a Series 6%
Debenture in the appropriate aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Any Series 6% Debenture or Common Stock issued upon the conversion or
exchange of a Series 6% Debenture that, prior to the Transfer Restriction
Termination Date, is purchased or owned by the Company or any Affiliate thereof
may not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Series 6% Debentures or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
ARTICLE 2
OPTIONAL REDEMPTION OF THE SERIES 6% DEBENTURES
SECTION 2.01. Except as provided in Section 2.02 and subject to the
provisions below, Series 6% Debentures may not be redeemed by the Company prior
to May 19, 2003. Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Series 6% Debentures, in whole or in
part, from time to time, on or after May 19, 2003, upon not less than 30 nor
more than 60 days notice to the Holders of the Series 6% Debentures, at the
following prices (expressed as percentages of the principal amount of the
Series 6% Debentures) (the "Optional Redemption Price"), together with any
accrued and unpaid interest thereon, including Compounded Interest (as defined
herein), if any, to, but excluding, the date of such redemption, if redeemed
during the 12-month period beginning May 15:
10
Year Redemption Price
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2003 103.75%
2004 103.00%
2005 102.25%
2006 101.50%
2007 100.75%
and 100% if redeemed on May 15, 2008.
If the Series 6% Debentures are redeemed on any Interest Payment Date,
accrued and unpaid interest shall be payable to Holders of record on the
relevant record date.
The Company may not redeem any Series 6% Debenture unless all accrued and
unpaid interest thereon, including Compounded Interest, if any, has been paid
for all quarterly periods terminating on or prior to the date of notice of
redemption. So long as the corresponding Trust Securities are outstanding, the
proceeds from the redemption of the Series 6% Debentures will be used to redeem
the Trust Securities.
If the Company gives a notice of redemption in respect of Junior
Subordinated Debentures (which notice will be irrevocable), then, by 12:00
noon, New York City time, on the redemption date, the Company will deposit
irrevocably with the Indenture Trustee funds sufficient to pay the applicable
Redemption Price and will give irrevocable instructions and authority to pay
such Redemption Price to the holders of the Junior Subordinated Debentures.
If notice of redemption shall have been given and funds deposited as
required, then from the redemption date, interest will cease to accrue on the
Series 6% Debentures called for redemption, such Series 6% Debentures will no
longer be deemed to be outstanding and all rights of holders of such Series 6%
Debentures so called for redemption will cease, except the right of the holders
of such Series 6% Debentures to receive the applicable Redemption Price, but
without interest on such Redemption Price.
If any date fixed for redemption of Junior Subordinated Debentures is not
a Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calender year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption.
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If the Company fails to repay the Series 6% Debentures on maturity or the
date fixed for redemption, or if payment of the Redemption Price in respect of
Series 6% Debentures is improperly withheld or refused and not paid by the
Company, interest on such Series 6% Debentures will continue to accrue, from
the original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the applicable Redemption Price.
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange any Junior Subordinated
Debentures during a period beginning at the opening of business 15 days before
any selection for redemption of Junior Subordinated Debentures and ending at
the close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures to be redeemed and (ii) register the transfer of or exchange any
Junior Subordinated Debentures so selected for redemption, in whole or in part,
except the unredeemed portion of any Junior Subordinated Debentures being
redeemed in part.
SECTION 2.02. If, at any time, a Tax Event (as defined below) shall occur
or be continuing and (i) the Regular Trustees and the Company shall have
received an opinion (a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Series 6% Debentures for United
States federal income tax purposes even if the Series 6% Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holder's interest in AES Trust VII as set forth in the
Declaration of Trust or (ii) the Regular Trustees shall have been informed by
such tax counsel that a No Recognition Opinion (as defined below) cannot be
delivered to AES Trust VII, the Company shall have the right at any time, upon
not less than 30 nor more than 60 days' notice, to redeem the Series 6%
Debentures in whole or in part for cash at a price equal to 100% of the
principal amount thereof, together with any accrued and unpaid interest
thereon, including Compounded Interest, if any, to, but excluding the date of
redemption, within 90 days following the occurrence of such Tax Event;
provided, however, that, if at the time there is available to the Company or
the Regular Trustees on behalf of AES Trust VII the opportunity to eliminate,
within such 90 day period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
AES Trust VII, the Company or the holders of the Preferred Securities, the
Company or the Regular Trustees on behalf of AES Trust VII will pursue such
measure in lieu of redemption and provided further that the Company
12
shall have no right to redeem the Series 6% Debentures while the Regular
Trustees on behalf of AES Trust VII are pursuing any such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that on
or after May 11, 2000 as a result of (a) any amendment to, or change in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action
taken by any governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after May 11, 2000 there is more than an insubstantial risk that (i) AES
Trust VII is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Series 6% Debentures, (ii) AES Trust VII is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of taxes, duties or
other governmental charges or (iii) interest payable by the Company to AES
Trust VII on the Series 6% Debentures is not, or within 90 days of the date
thereof will not be, deductible by the Company for United States federal income
tax purposes.
"No Recognition Opinion" means an opinion of a nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue ruling of the Internal Revenue Service,
to the effect that the holders of the Preferred Securities will not recognize
any gain or loss for United States federal income tax purposes as a result of a
dissolution of AES Trust VII and distribution of the Series 6% Debentures as
provided in the Declaration of Trust.
SECTION 2.03. If the Series 6% Debentures are only partially redeemed
pursuant to this Article Two, the Series 6% Debentures will be redeemed pro
rata or by lot or by any other method utilized by the Trustee, provided that if
at the time of redemption, the Series 6% Debentures are registered as a Global
Debenture, the Depository shall determine by lot the principal amount of such
Series 6% Debentures held by each Debenture Holder to be redeemed in accordance
with its customary procedures. Notwithstanding the foregoing, if a partial
redemption of the Series 6% Debentures would result in the delisting of the
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Preferred Securities by any national securities exchange or other organization
on which the Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and will only redeem the Series 6%
Debentures in whole.
ARTICLE 3
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 3.01. So long as the Company is not in default in the payment of
interest on the Series 6% Debentures, the Company shall have the right, at any
time during the term of the Series 6% Debentures, from time to time to extend
the interest payment period of such Series 6% Debentures for up to 20
consecutive quarterly interest periods (the "Extended Interest Payment
Period"), at the end of which period the Company shall pay all interest accrued
and unpaid thereon (together with interest thereon at the rate of 6% per annum
to the extent permitted by applicable law, compounded quarterly ("Compounded
Interest")); provided that no Extended Interest Payment Period may extend
beyond the Maturity Date or redemption date of the Series 6% Debentures. During
such Extended Interest Payment Period the Company shall not declare or pay any
dividend on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its common stock or preferred stock or make any
guarantee payments with respect thereto; provided that the foregoing will not
apply to any stock dividends paid by the Company in Common Stock. Prior to the
termination of any such Extended Interest Payment Period, the Company may pay
all or any portion of the interest accrued on the Series 6% Debentures on any
Interest Payment Date to holders of record on the regular record date for such
Interest Payment Date or from time to time further extend such Period; provided
that such Period together with all such further extensions thereof shall not
exceed 20 consecutive quarterly interest periods. Upon the termination of any
Extended Interest Payment Period and upon the payment of all accrued and unpaid
interest then due, together with Compounded Interest, the Company may select 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. At the end of the Extended Interest Payment Period
the Company shall pay all interest accrued and unpaid on the Series 6%
Debentures including any Compounded Interest which shall be payable to the
holders of the Series 6% Debentures in whose names the Series 6% Debentures are
registered in the Debenture register on the first record date after the end of
the Extended Interest Payment Period.
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SECTION 3.02. (a) So long as the Property Trustee is the legal owner and
holder of record of the Series 6% Debentures, at the time the Company selects
an Extended Interest Payment Period, the Company shall give both the Property
Trustee and the Trustee written notice of its selection of such Extended
Interest Payment Period one business day prior to the earlier of (i) the next
succeeding date on which distributions on the Preferred Securities are payable
or (ii) the date AES Trust VII is required to give notice of the record date or
the date such distributions are payable to holders of the Preferred Securities,
but in any event not less than one business day prior to such record date. The
Company shall cause AES Trust VII to give notice of the Company's selection of
such Extended Interest Payment Period to the holders of the Preferred
Securities.
(b) If as a result of a Dissolution Event Series 6% Debentures have been
distributed to holders of Preferred Securities and Common Securities, at the
time the Company selects an Extended Interest Payment Period, the Company shall
give the holders of the Series 6% Debentures and the Trustee written notice of
its selection of such Extended Interest Payment Period at least 10 business
days prior to the earlier of (i) the next succeeding Interest Payment Date or
(ii) the date the Company is required to give notice of the record or payment
date of such interest payment to the New York Stock Exchange to the extent then
listed or other applicable self-regulatory organization or to holders of the
Series 6% Debentures.
SECTION 3.03. The quarter in which any notice is given pursuant to Section
3.02 shall be counted as one of the quarters permitted in the maximum Extended
Interest Payment Period permitted under this Article Three.
ARTICLE 4
COVENANTS APPLICABLE TO SERIES 6% DEBENTURES
SECTION 4.01. So long as any Preferred Securities remain outstanding, the
Company will not declare or pay any dividends on, or redeem, purchase, acquire
or make a distribution or liquidation payment with respect to, any of its
common stock or preferred stock or make any guarantee payments with respect
thereto if at such time (i) the Company shall be in default with respect to its
Guarantee Payments (as defined in the Guarantee Agreement) or other payment
obligations under the Guarantee Agreement, (ii) there shall have occurred any
Event of Default under the Indenture with respect to the Series 6% Debentures
or (iii) the Company shall have given notice of its election of an Extended
Interest Payment Period and such Period, or any extension thereof, is
continuing; provided that the foregoing will not apply to any stock dividends
paid by the Company in Common Stock.
15
SECTION 4.02. In connection with the distribution of the Series 6%
Debentures to the holders of the Preferred Securities upon a Dissolution Event,
the Company will use its best efforts to list such Series 6% Debentures on the
New York Stock Exchange or on such other exchange as the Preferred Securities
are then listed and traded.
SECTION 4.03. The Company covenants and agrees for the benefit of the
holders of the Preferred Securities to comply fully with all of its obligations
and agreements under the Declaration of Trust, including, without limitation,
its obligations under Article 4 thereof.
SECTION 4.04. Prior to the distribution of Series 6% Debentures to the
holders of Preferred Securities upon a Dissolution Event, the Company covenants
and agrees for the benefit of the holders of the Preferred Securities (i) to
remain the sole direct or indirect owner of all of the outstanding Common
Securities issued by AES Trust VII and not to cause or permit the Common
Securities to be transferred except as permitted by the Declaration of Trust
provided that any permitted successor of the Company under the Indenture may
succeed to the Company's ownership of the Common Securities issued by AES Trust
VII and (ii) that it will use reasonable efforts to cause the Trust to continue
to be treated as a grantor trust for United States federal income tax purposes,
except in connection with a distribution of the Series 6% Debentures as
provided in the Declaration of Trust.
ARTICLE 5
CONVERSION OF DEBENTURES
SECTION 5.01. Subject to and upon compliance with the provisions of this
Article Five, the Series 6% Debentures are convertible at the option of the
Holder, at any time through the close of business on May 14, 2008 (or, in the
case of Series 6% Debentures called for redemption, the close of business on
the Business Day prior to the corresponding redemption date) into fully paid
and nonassessable shares of Common Stock of the Company at an initial
conversion rate of 1.0811 shares of Common Stock for each $50 in aggregate
principal amount of Series 6% Debentures (equal to a conversion price (as
adjusted from time to time, the "Conversion Price") of $46.25 per share of
Common Stock), subject to adjustment as described in this Article Five,
provided that no adjustment shall be made in accordance with the provisions of
this Section 5 for the stock dividend payable on June 1, 2000. A Holder of
Series 6% Debentures may convert any portion of the principal amount of the
Series 6% Debentures into that number of fully paid and nonassessable shares of
Common Stock obtained by
16
dividing the principal amount of the Series 6% Debentures to be converted by
such conversion price. All calculations under this Article Five shall be made
to the nearest cent or to the nearest 1/10,000th of a share, as the case may
be.
SECTION 5.02. (a) In order to convert all or a portion of the Series 6%
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable Notice of Conversion setting forth the principal amount of Series
6% Debentures to be converted, together with the name or names, if other than
the Holder, in which the shares of Common Stock should be issued upon
conversion and, if such Series 6% Debentures are definitive Series 6%
Debentures, surrender to the Conversion Agent the Series 6% Debentures to be
converted, duly endorsed or assigned to the Company or in blank. In addition, a
holder of Preferred Securities may exercise its right under the Declaration of
Trust to convert such Preferred Securities into Common Stock by delivering to
the Conversion Agent an irrevocable Notice of Conversion setting forth the
information called for by the preceding sentence and directing the Conversion
Agent to (i) exchange such Preferred Security for a portion of the Series 6%
Debentures held by the Trust (at an exchange rate of $50 principal amount of
Series 6% Debenture for each Preferred Security) and (ii) immediately convert
such Series 6% Debenture, on behalf of such holder, into Common Stock of the
Company pursuant to this Article Five and, if such Preferred Securities are in
definitive form, surrendering such Preferred Securities, duly endorsed or
assigned to the Company or in blank. So long as any Preferred Securities are
outstanding, the Trust shall not convert any Series 6% Debenture except
pursuant to a Notice of Conversion delivered to the Conversion Agent by a
holder of Preferred Securities. Any reference herein to a "holder" of Preferred
Securities shall mean a "Holder" of such securities as defined in the
Declaration of Trust.
If a Preferred Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before
the opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in whose name the Series 6%
Debenture is registered at the close of business on such record date, and
(other than a Series 6% Debenture or a portion of a Series 6% Debenture called
for redemption on a redemption date occurring after such record date and prior
to such Distribution payment date) when so surrendered for conversion, the
Series 6% Debenture must be accompanied by payment of an amount equal to the
Distribution payable on such Distribution payment date. Except as otherwise
provided in the immediately preceding sentence, in the case of any Series 6%
Debenture which is converted, interest whose Maturity Date is after the date of
conversion of such Series 6% Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
17
allowance with respect to accrued but unpaid interest on the Series 6%
Debenture being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date") by the Conversion Agent from the Holder or from a holder of
the Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such
Common Stock as of the Conversion Date. As promptly as practicable on or after
the Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment, if
any, in lieu of any fraction of any share to the Person or Persons entitled to
receive the same. The Conversion Agent shall deliver such certificate or
certificates to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Series 6% Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at maturity of the
portion of Series 6% Debentures so converted and any unpaid interest (including
Compounded Interest) accrued on such Series 6% Debentures at the time of such
conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent
a cash adjustment in an amount equal to the same fraction of the Closing Price
of such fractional interest on the date on which the Series 6% Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a day on which any securities are traded on the national securities exchange or
quotation system used to determine the Closing Price (a "Trading Day"), on the
next Trading Day, and the Conversion Agent in turn will make such payment, if
any, to the Holder of the Series 6% Debentures or the holder of the Preferred
Securities so converted.
(d) In the event of the conversion of any Series 6% Debenture in part
only, a new Series 6% Debenture or Series 6% Debentures for the unconverted
portion thereof will be issued in the name of the Holder thereof upon the
cancellation thereof in accordance with Section 2.05 of the Indenture.
(e) In effecting the conversion transactions described in this Section
5.02, the Conversion Agent is acting as agent of the holders of Preferred
18
Securities (in the exchange of Preferred Securities for Series 6% Debentures)
and as agent of the Holders of Series 6% Debentures (in the conversion of
Series 6% Debentures into Common Stock), as the case may be. The Conversion
Agent is hereby authorized (i) to exchange Series 6% Debentures held by the
Trust from time to time for Preferred Securities in connection with the
conversion of such Preferred Securities in accordance with this Article Five
and (ii) to convert all or a portion of the Series 6% Debentures into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Article Five and to deliver to the Trust a new Series 6%
Debenture or Series 6% Debentures for any resulting unconverted principal
amount.
SECTION 5.03. (a) The Conversion Price shall be adjusted from time to time
as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on Common Stock in shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the date fixed for the determination of shareholders entitled to receive
such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator of which shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination; provided, however, that no adjustment shall
be made pursuant to this subparagraph (i) for the Common Stock dividend
payable on June 1, 2000 to holders of record on May 1, 2000. For the
purposes of this subparagraph (i), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company (except to the extent such dividend or distribution is being made
with respect to such shares) but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common
Stock.
(ii) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller amount of shares of
Common Stock, then the Conversion Price in effect at the opening of
business on the day following the day upon which such combination
19
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iii) In case the Company shall issue rights or warrants to all
holders of Common Stock entitling them (for a period expiring within 45
days after the record date fixed for a distribution of such rights or
warrants) to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price (as hereinafter defined) per
share (determined as provided in subparagraph (vii) below) of Common Stock
on the date fixed for the determination of shareholders entitled to
receive such rights or warrants (other than pursuant to a dividend
reinvestment plan), then the Conversion Price in effect at the opening of
business on the day following the date fixed for such determination shall
be reduced by multiplying such Conversion Price by a fraction the
numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered
for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (iii),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees not to issue any
rights or warrants in respect of shares of Common Stock held in the
treasury of the Company. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in
effect had the adjustments made in respect of the issuance of such rights
or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered.
(iv) Subject to the second paragraph of this subparagraph (iv), in
case the Company shall, by dividend or otherwise, distribute to all
holders of Common Stock (A) shares of capital stock of the Company (other
than Common Stock), (B) evidence of indebtedness of the Company and/or (C)
20
other assets (including securities, but excluding (1) any rights or
warrants referred to in subparagraph (iii) above, (2) any rights or
warrants to obtain capital stock of a company other than the Company or
any subsidiary of the Company (including any rights offerings of the
Company with respect to capital stock of companies in which the Company
has an investment (a "Rights Offering")), (3) dividends or distributions
in connection with the liquidation, dissolution or winding-up of the
Company, (4) dividends payable solely in cash that may from time to time
be fixed by the Board of Directors of the Company and (5) dividends or
distributions referred to in subparagraph (i) above), then in each case
(unless the Company makes the election referred to in the next sentence)
the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such record date by a fraction the
numerator of which shall be the Current Market Price per share (determined
as provided in subparagraph (vii) below) of the Common Stock on such
record date (the "Reference Date") less the then fair market value on the
Reference Date (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive and shall be
described in a statement filed with the Depositary and the Trustee) of the
portion of the shares of capital stock of the Company, evidences of
indebtedness or other assets so distributed (and for which an adjustment
to the Conversion Price has not been made previously pursuant to the terms
of this Article Five) applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the Reference Date. However, the
Company may elect, in its sole discretion, in lieu of the foregoing
adjustment, to make adequate provision so that each holder of Securities
shall have the right to receive upon conversion thereof the amount and
kind of shares of capital stock, evidences of indebtedness or other assets
such holder would have received had such holder converted such shares on
such record date. If the Board of Directors of the Company determines the
fair market value of any distribution for purposes of this subparagraph
(iv) by reference to the actual or when issued trading market for any
securities (including shares of capital stock or evidence of indebtedness
of the Company) comprising a distribution of securities, it must in doing
so consider the price in such market over the period used in computing the
Current Market Price of the Common Stock.
For purposes of this subparagraph (iv), any dividend or distribution
that includes both (x) any of the items described in clauses (A), (B) or
(C) of the first paragraph of this subparagraph (iv) and (y) Common Stock
or
21
rights or warrants to subscribe for or purchase Common Stock of the type
referred to in subparagraph (iii) shall be deemed to be (1) a dividend or
distribution of shares of capital stock of the Company (other than Common
Stock), evidences of indebtedness of the Company or other assets of the
type referred to in clause (C) of the first paragraph of this subparagraph
(iv) (making any Conversion Price reduction required by this subparagraph
(iv)) immediately followed by (2) a dividend or distribution of such
Common Stock or rights or warrants to purchase Common Stock of the type
referred to in subparagraph (iii) (making any further Conversion Price
reduction required by subparagraph (i) or (iii) of this Section 5.03(a)),
except (A) the Reference Date of such dividend or distribution as defined
in this subparagraph (iv) shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such rights or warrants"
and "the date fixed for such determination" within the meaning of
subparagraphs (i) and (iii) of this Section 5.03(a) and (B) any shares of
Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section
5.03(a).
The occurrence of a distribution or the occurrence of any other event
as a result of which holders of Series 6% Debentures converting such notes
into Common Stock hereunder will not be entitled to receive rights issued
pursuant to any shareholder protective rights agreement now or hereafter
in effect (the "Other Rights") in the same amount and manner as if such
holders had converted such shares immediately prior to the occurrence of
such distribution or other event shall be deemed a distribution of Other
Rights for the purposes of conversion adjustments pursuant to this
subparagraph (iv). In lieu of making any adjustment to the Conversion
Price under this subparagraph (iv) as a result of such a distribution of
Other Rights, the Company may elect, in its sole discretion, to provide
that Other Rights shall be issuable in the same amount and manner upon
conversion of the Series 6% Debentures without regard to whether the
shares of Common Stock issuable upon conversion of the Series 6%
Debentures were issued before or after such distribution or other event.
(v) In case the Company shall, by dividend or otherwise, at any time
distribute cash to all holders of Common Stock, excluding (A) any cash
dividends on Common Stock to the extent that the aggregate cash dividends
per share of Common Stock in any consecutive 12-month period do not exceed
the greater of (x) the amount per share of Common Stock of the cash
dividends paid on the Common Stock in the immediately
22
preceding 12-month period, to the extent that such dividends for the
immediately preceding 12-month period did not require an adjustment to the
Conversion Price pursuant to this subparagraph (v) (as adjusted to reflect
subdivisions or combinations of the Common Stock) and (y) 15% of the
average of the daily Closing Prices (as hereinafter defined) of the Common
Stock for the ten consecutive Trading Days immediately prior to the date
of declaration of such dividend and (B) any dividend or distribution in
connection with the liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary; or any redemption of any Other Rights;
provided, however, that no adjustment shall be made pursuant to this
subparagraph (v) if such distribution would otherwise constitute a
Fundamental Change (as hereinafter defined) and be reflected in a
resulting adjustment to the Conversion Price as provided in this Article
Five) then, in each case (unless the Company makes the election referred
to in the proviso following this clause), the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying
the Conversion Price in effect at the close of business on such record
date by a fraction the numerator of which shall be the Closing Price of a
share of Common Stock on such record date less the amount of cash so
distributed (to the extent not excluded as provided above) applicable to
one share of Common Stock, and the denominator shall be the Closing Price
of a share of Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following such record date;
provided, however, that the Company may elect, in its sole discretion, in
lieu of the foregoing adjustment, to make adequate provision so that each
holder of Securities shall thereafter have the right to receive upon
conversion the amount of cash such holder would have received had such
holder converted each Security on such record date. If any adjustment is
required to be made as set forth in this subparagraph (v) as a result of a
distribution which is a dividend described in clause (A) of this
subparagraph (v), such adjustment will be based upon the amount by which
such distribution exceeds the amount of the dividend permitted to be
excluded pursuant to such clause (A) of this subparagraph (v). If an
adjustment is required to be made pursuant to this subparagraph (v) as a
result of a distribution which is not such a dividend, such adjustment
would be based upon the full amount of such distribution.
(vi) In case of the consummation of a tender or exchange offer (other
than an odd-lot tender offer) made by the Company or any subsidiary of the
Company for all or any portion of the outstanding shares of Common Stock
to the extent that the cash and fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall
be conclusive and shall be described in a resolution of
23
such Board) of any other consideration included in such payment per share
of Common Stock at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as
amended) exceed by more than 10%, with any smaller excess being
disregarded in computing the adjustment to the Conversion Price provided
in this subparagraph (vi), the first reported sale price per share of
Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the Expiration Time by a fraction the numerator of which shall be
the number of shares of Common Stock outstanding (including any tendered
or exchanged shares) on the Expiration Time multiplied by the first
reported sale price of the Common Stock on the Trading Day next succeeding
the Expiration Time and the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the first reported sale price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day
following the Expiration Time.
(vii) For the purpose of any computation under this Article Five, the
"Current Market Price per share" of Common Stock on any day shall be
deemed to be the average of the daily Closing Prices (as hereinafter
defined) per share of Common Stock for the ten consecutive Trading Days
prior to and including the date in question; provided, however, that (1)
if the "ex" date (as hereinafter defined) for any event (other than the
issuance, distribution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pursuant to this
Article Five (the "Other Event") occurs during such ten consecutive
Trading Days and prior to the "ex" date for the issuance, distribution or
Fundamental Change requiring such computation (the "Current Event"), the
Closing Price for each Trading Day prior to the "ex" date for such Other
Event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such Other Event, (2) if the "ex" date for any Other Event
occurs on or after the "ex" date for the Current Event and on or prior to
the date in question, the Closing Price for each Trading
24
Day on and after the "ex" date for such Other Event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which
the Conversion Price is so required to be adjusted as a result of such
Other Event (provided that in the event that such fraction is required to
be determined at a date subsequent to the date in question and with
reference to events taking place subsequent to the date in question, the
Board of Directors of the Company or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose determination
shall be conclusive and described in a resolution of the Board of
Directors of the Company or such duly authorized committee thereof, as the
case may be, shall in good faith estimate such fraction based on
assumptions it deems reasonable regarding such events taking place
subsequent to the date in question, and such estimated fraction shall be
used for purposes of such adjustment until such time as the actual
fraction by which the Conversion Price is so required to be adjusted as a
result of such Other Event is determined), and (3) if the "ex" date for
the Current Event is on or prior to the date in question, after taking
into account any adjustment required pursuant to clause (1) or (2) of this
proviso, the Closing Price for each Trading Day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the fair
market value (as determined in good faith by the Board of Directors of the
Company or, to the extent permitted by applicable law, a duly authorized
committee thereof in a manner consistent with any determination of such
value for purposes of this Article Five, whose determination shall be
conclusive and described in a resolution of the Board of Directors of the
Company or such duly authorized committee thereof, as the case may be) of
the shares of capital stock, evidences of indebtedness or other assets
being distributed applicable to one share of Common Stock as of the close
of business on the day before such "ex" date. For purposes of this
subparagraph (vii), the term "ex" date, (1) when used with respect to any
issuance, distribution or Fundamental Change, means the first date on
which the Common Stock trades regular way on the relevant exchange or in
the relevant market from which the Closing Price was obtained without the
right to receive such issuance, such distribution or the cash, securities,
property or other assets distributable in such Fundamental Change to
holders of the Common Stock, (2) when used with respect to any subdivision
or combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective
and (3) when used with respect to any tender or exchange offer means the
first date on which the Common Stock trades regular way on such exchange
or in such market after the Expiration Time of such offer.
25
(viii) No adjustment in the Conversion Price shall be required
pursuant to this Section 5.03(a) unless the adjustment would require a
change of at least 1% of such price; provided, however, that any
adjustments which by reason of this subparagraph (viii) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent
(with .005 being rounded upward) or to the nearest 1/10,000th of a share
(with .00005 of a share being rounded upward), as the case may be.
Notwithstanding anything to the contrary in this Article Five, the Company
from time to time may, to the extent permitted by law, reduce the
Conversion Price by any amount for any period of at least 20 Business
Days, in which case the Company shall give at least 15 days' notice of
such reduction to the holders of Series 6% Debentures and the Trustee. In
addition, the Company may, at its option, make such reductions in the
Conversion Price in addition to those set forth in this Article Five, as
it considers to be advisable in order to avoid or diminish any income tax
to any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons.
(ix) In any case in which this Article Five provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (A)
issuing to the holder of any Series 6% Debentures converted after such
record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such
holder any amount in cash in lieu of any fractional shares pursuant to
this Article Five.
(x) For purposes of this Article Five, "Common Stock" includes any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and
which is not subject to redemption by the Company. However, subject to the
provisions of this Article Five, shares issuable on conversion of Series
6% Debentures shall include only shares of the class designated as the
Company Common Stock on the date of the initial issuance of Series 6%
Debentures by the Company or shares of any class or classes resulting from
any reclassification or reclassification thereof and which have no
preference in respect of dividends or of amounts payable in the event of
26
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
(b) Whenever the Conversion Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Conversion Price and shall
prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee and
the transfer agent for the Preferred Securities and the Series 6%
Debentures; and
(ii) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable
be mailed by the Company to all record holders of Preferred Securities and
the Series 6% Debentures at their last addresses as they appear upon the
stock transfer books of the Company and the Trust.
SECTION 5.04. (a) In the event that the Company shall be a party to any
transaction or series of transactions constituting a Fundamental Change,
including, without limitation, (i) any recapitalization or reclassification of
shares of Common Stock (other than a change in the par value or as a result of
a subdivision or combination of the Common Stock), (ii) any consolidation of
the Company with, or merger of the Company into, any other corporation or any
merger of another corporation into the Company as a result of which holders of
Common Stock shall be entitled to receive securities or other property or
assets (including cash) with respect to or in exchange for Common Stock (other
than a merger which does not result in a reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock), (iii) any sale or
transfer of all or substantially all of the assets of the Company, or (iv) any
compulsory share exchange, pursuant to any of which the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
appropriate provision shall be made as part of the terms of such transaction or
series of transactions so that the holder of each Series 6% Debenture then
outstanding shall have the right thereafter to convert such Series 6% Debenture
only into (A) if any such transaction does not constitute a Common Stock
Fundamental Change (as hereinafter defined), the kind and amount of the
securities, cash or other property
27
that would have been receivable upon such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange by a holder of the
number of shares of Common Stock into which such Series 6% Debenture might have
been converted immediately prior to such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange, after, in the case of
a Non- Stock Fundamental Change (as hereinafter defined), giving effect to any
adjustment in the Conversion Price required by the provisions which follow in
subparagraph (i) of Section 5.04(c), and (B) if any such transaction
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 determined pursuant to the provisions which
follow in subparagraph (ii) of Section 5.04(c). The company formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires the Common Stock, as the case may be, shall enter into a
supplemental indenture with the Trustee, satisfactory in form to the Trustee,
the provisions of which establishes such right and provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article Five. The above provisions shall
similarly apply to successive recapitalization, reclassifications,
consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article Five to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 5.04(c).
(c) For purposes of calculating any adjustment to be made pursuant to this
Article Five in the event of a Fundamental Change, immediately following such
Fundamental Change (and for such purposes a Fundamental Change shall be deemed
to occur on the earlier of (a) the occurrence of such Fundamental Change and
(b) the date, if any, fixed for determination of shareholders entitled to
receive the cash, securities, property or other assets distributable in such
Fundamental Change to holders of the Common Stock):
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price per share of Common Stock 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 adjustments effected pursuant to this Article
Five, and (B) the product of (1) the greater of the Applicable Price (as
hereinafter defined) or the then applicable Reference Market Price (as
hereinafter defined) and (2) a fraction the numerator of which shall be
$100 and the denominator of which shall be the amount based on the date
28
on which such Non-Stock Fundamental Change occurs. For the twelve month
period beginning May 15, 2000, the denominator will be 106, and the
denominator will decrease by 0.75 during each successive 12-month period;
provided, that the denominator shall in no event be less than 100.0.
(ii) in the case of a Common Stock Fundamental Change, the Conversion
Price per share of Common Stock immediately following the 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 adjustments effected pursuant to this Article Five, multiplied
by a fraction, the numerator of which is the Purchaser Stock Price (as
hereinafter defined) and the denominator of which is the Applicable Price;
provided, however, that in the event of a Common Stock Fundamental Change
in which (A) 100% of the value of the consideration received by a holder
of Common Stock is common stock of the successor, acquiror or other third
party (and cash, if any, paid with respect to any fractional interests in
such common stock resulting from such Common Stock Fundamental Change) and
(B) all of the Common Stock shall have been exchanged for, converted into
or acquired for common stock (and cash, if any, with respect to fractional
interests) of the successor, acquiror or other third party, the Conversion
Price per share of Common Stock immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Stock Fundamental Change divided by the number of
shares of common stock of the successor, acquiror, or other third party
received by a holder of one share of Common Stock as a result of such
Common Stock Fundamental Change.
(d) The following definitions shall apply to terms used in this Article
Five:
(i) "Applicable Price" shall mean (A) in the event of a Non- Stock
Fundamental Change in which the holders of Common Stock receive only cash,
the amount of cash receivable by a holder of one share of Common Stock and
(B) in the event of any other Fundamental Change, the average of the
Closing Prices for one share of Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the holders
of Common Stock entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of Common Stock
shall have the right to receive such cash, securities, property or other
assets.
29
(ii) "Closing Price" with respect to any securities on any day shall
mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the New York Stock Exchange or,
if such security is not listed or admitted to trading on such Exchange, on
the principal national securities exchange or quotation system on which
such security is quoted or listed or admitted to trading or, if not quoted
or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the date in question as
reported by the National Quotation Bureau Incorporated, or a similarly
generally accepted reporting service or, if not so available, in such
manner as furnished by any New York Stock Exchange member firm selected
from time to time by the Board of Directors of the Company for that
purpose or a price determined in good faith by the Board of Directors of
the Company.
(iii) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors of the Company) of the consideration received by
the holders of Common Stock pursuant to such transactions consists of
shares of common stock that, for the ten consecutive Trading Days
immediately prior to such Fundamental Change, has been admitted for
listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the Nasdaq National Market;
provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless either (A) the Company continues to exist after
the occurrence of such Fundamental Change and the outstanding Preferred
Securities continue to exist as outstanding Preferred Securities, or (B)
the outstanding Preferred Securities continue to exist as Preferred
Securities and are convertible into common stock of the successor to the
Company.
(iv) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to which
all or substantially all of the Common Stock shall be exchanged for,
converted into, acquired for or constitutes solely the right to receive
cash, securities, property or other assets (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise); provided,
however, in the case of a plan involving more than one such transaction or
event, for purposes of adjustment of the Conversion Price, such
Fundamental Change shall be deemed to have occurred when substantially all
of the
30
Common Stock has been exchanged for, converted into, or acquired for or
constitutes solely the right to receive cash, securities, property or
other assets, but the adjustment shall be based upon the consideration
which the holders of Common Stock received in such transaction or event as
a result of which more than 50% of the Common Stock shall have been
exchanged for, converted into, or acquired for or shall constitute solely
the right to receive cash, securities, property or other assets.
(v) "Non-Stock Fundamental Change" shall mean any Fundamental Change
other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the Closing Prices for one share
of the common stock received by holders of Common Stock in such Common
Stock Fundamental Change during the ten Trading Days immediately prior to
the record date for the determination of the holders of Common Stock
entitled to receive such common stock or, if there is no such record date,
prior to the date upon which the holders of Common Stock shall have the
right to receive such common stock.
(vii) "Reference Market Price" shall initially mean $24.79 (which is
an amount equal to 66-2/3% of the last reported sale price for the Common
Stock on the New York Stock Exchange on May 11, 2000, adjusted for the
stock dividend payable on June 1, 2000) and, in the event of any
adjustment to the Conversion Price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the
ratio of the Reference Market Price to the Conversion Price after giving
effect to any such adjustment shall always be the same as the ratio of the
initial Reference Market Price to the initial Conversion Price set forth
in this Article Five.
(e) In determining the amount and type of consideration received by a
holder of Common Stock in the event of a Fundamental Change, consideration
received by a holder of Common Stock pursuant to a statutory right of appraisal
will be disregarded.
SECTION 5.05. In case:
(i) the Company shall declare a dividend (or any other distribution)
on Common Stock that would cause an adjustment to the Conversion Price of
the Series 6% Debentures pursuant to the terms of any of the subparagraphs
above (including such an adjustment that would
31
occur but for the terms of the first sentence of Section 5.03(a)(viii)
above); or
(ii) the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock or combined into a smaller
number of shares of Common Stock; or
(iii) the Company shall authorize the granting to the holders of
Common Stock generally of rights or warrants (for a period expiring within
45 days after the record date fixed for a distribution of such rights and
warrants) to subscribe for or purchase any shares of the Company's capital
stock or other capital stock of any class or of any other rights
(including any Rights Offerings); or
(iv) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company or a compulsory share exchange; or
(v) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall (i) if any Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Preferred Securities, and
shall cause to be mailed to the holders of record of the Preferred Securities,
at their last addresses as they shall appear upon the stock transfer books of
the Trust or (ii) shall cause to be mailed to all Holders at their last
addresses as they shall appear in the books and records of the Trust, 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).
32
SECTION 5.06. The Company shall reserve, free from pre-emptive rights, out
of its authorized but unissued shares, sufficient shares to provide for the
conversion of the Series 6% Debentures from time to time as such Series 6%
Debentures are presented for conversion, provided, that nothing contained
herein shall be construed to preclude the Company from satisfying its
obligations in respect of the conversion of Series 6% Debentures by delivery of
repurchased shares of Common Stock which are held in the treasury of the
Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Series 6% Debentures hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, provided, however, that nothing
in this Section 5.06 shall be deemed to affect in any way the obligations of
the Company to convert Series 6% Debentures into Common Stock as provided in
this Article Five.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Series 6% Debentures will upon issue be fully paid and
non-assessable by the Company and free of pre-emptive rights.
SECTION 5.07. Notwithstanding the foregoing provisions, 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, and the issuance of any shares of Common Stock or options or rights
to purchase such shares pursuant to any employee benefit plan or program of the
Company or pursuant to any option, warrant, right or exercisable, exchangeable
or convertible security outstanding as of May 16, 2000, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the Conversion
Price 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 Five.
33
SECTION 5.08. In case the Company shall, by dividend or otherwise, declare
or make a distribution on the Common Stock referred to in Section 5.03(a)(iv)
or 5.03(a)(v) (including, without limitation, dividends or distributions
referred to in the last sentence of Section 5.03(a)(vi)), the Holder of the
Series 6% Debenture, upon the conversion thereof subsequent to the close of
business on the date fixed for the determination of stockholders entitled to
receive such distribution and prior to the effectiveness of the Conversion
Price adjustment in respect of such distribution, shall also be entitled to
receive for each share of Common Stock into which the Series 6% 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 Series 6% 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 Series 6% 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 national securities
exchange or other market on which the Common Stock is then traded and (b)
requires payment or delivery of such shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets no later
than the date of payment or delivery thereof to holders of shares of Common
Stock receiving such distribution.
ARTICLE 6
FORM OF SERIES 6% DEBENTURES
SECTION 6.01. The Series 6% Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
34
[IF THE NOTE IS TO BE A GLOBAL DEBENTURE, INSERT - 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 limited
circumstances.
Unless this Debenture is presented by an authorized representative to The
Depository Trust Company (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
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS SECURITY HAS BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT. FOR THIS PURPOSE, THE AES CORPORATION WILL, BEGINNING
AFTER MAY 25, 2000, MAKE AVAILABLE TO THE HOLDERS THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, THE ISSUE PRICE, AND THE YIELD TO MATURITY OF THIS
SECURITY. AFTER MAY 25, 2000, HOLDERS MAY CONTACT XXXXXXX X. XXXXXXXX AT
703-522-1315 FOR THE ABOVE INFORMATION.
35
No. $
THE AES CORPORATION
6% JUNIOR SUBORDINATED DEBENTURE
DUE 2008
[If prior to the Transfer Restriction Termination Date or sale pursuant to
an effective registration statement or Rule 144, add legend from Section 1.04
of this Seventh Supplemental Indenture].
The AES Corporation, a corporation duly organized and existing under the
laws of the State of Delaware (herein referred to as 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 $___________ on May 15, 2008, and to pay interest
on said principal sum from May 17, 2000 or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears commencing August 15, 2000 at the rate of 6% per annum plus
Compounded Interest, if any, until the principal hereof shall have become due
and payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at the same rate
per annum. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year twelve 30-day months. 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 which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, 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, be paid to the person in whose name this Debenture (or one or
more Predecessor Debentures, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest installment,
[which shall be the close of business on the day next preceding such Interest
Payment Date, provided if the Preferred Securities of AES Trust VII are no
longer in book-entry only form, the regular record dates shall be the close of
business on the first (1st) day of the month in which such Interest Payment
Date occurs] [IF
36
PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE INDENTURE OR SECTION 1.04
OF THE SEVENTH SUPPLEMENTAL INDENTURE THE SERIES 6% DEBENTURES ARE NOT
REPRESENTED BY A GLOBAL DEBENTURE -- which shall be the close of business on
the first (1st) day of the month in which such Interest Payment Date occurs.]
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
this series of 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
Company maintained for that purpose in the Borough of Manhattan, The City and
State of New York, in any coin or currency of the United States of America
which 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 Debenture register and that the payment of principal will only be
made upon the surrender of this Debenture to the Trustee. Notwithstanding the
foregoing, so long as the owner and record holder of this Debenture is the
Property Trustee (as defined in the Indenture referred to on the reverse
hereof), the payment of the principal of (and premium, if any) and interest
(including Compounded Interest, if any) on this Debenture will be made at such
place and to such account of the Property Trustee as may be designated by the
Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior and Subordinated Debt, 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 behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior and Subordinated Debt,
whether now outstanding or hereafter incurred, and waives reliance by each such
Holder upon said provisions.
37
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.
Dated:
------------------------------------
The AES Corporation
By:
---------------------------------
Attest:
By:
--------------------------------------
Secretary
38
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
BANK ONE,
NATIONAL ASSOCIATION
as Trustee
By
--------------------------------------
Authorized Signatory
39
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of March 1, 1997 duly executed and delivered between
the Company and Bank One, National Association, as Trustee (herein referred to
as the "Trustee"), as supplemented by the Seventh Supplemental Indenture dated
as of May 17, 2000 between the Company and the Trustee (said Indenture as so
supplemented being hereinafter referred to as the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures, and, to the extent specifically set forth in the Indenture, the
holders of Senior and Subordinated Debt and Preferred Securities. By the terms
of the Indenture, the Debentures are issuable in series which may vary as to
amount, date of maturity, rate of interest and in other respects as in the
Indenture provided. This series of Debentures is designated the 6% Junior
Subordinated Debentures due 2008 and is limited in aggregate principal amount
as specified in said Seventh Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may not be
redeemed by the Company prior to May 19, 2003. The Company shall have the right
to redeem this Debenture at the option of the Company, in whole or in part at
any time on or after May 19, 2003 (an "Optional Redemption"), upon not less
than 30 nor more than 60 days notice to the Holder of the Series 6% Debentures,
at the following prices (as expressed as percentages of the principal amount of
the Debentures) (the "Optional Redemption Price"), together with any accrued
but unpaid interest, including any Compounded Interest, if any, to, but
excluding, the date of such redemption, if redeemed during the 12-month period
beginning May 15:
Year Redemption Price
---- ----------------
2003 103.75%
2004 103.00%
2005 102.25%
2006 101.50%
2007 100.75%
and 100% if redeemed on May 15, 2008.
40
If the Series 6% Debentures are redeemed on any Interest Payment Date,
accrued and unpaid interest shall be payable to Holders of record on the
relevant record date.
The Company may not redeem any Series 6% Debentures unless all accrued and
unpaid interest thereon, including Compounded Interest, if any, has been paid
for all quarterly periods terminating on or prior to the date of notice of
redemption. So long as the corresponding Preferred Securities are outstanding,
the proceeds from the redemption of the Series 6% Debentures will be used to
redeem the Preferred Securities.
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided if, at the time of
redemption, the Debentures are registered as a Global Debenture, the Depository
shall determine the principal amount of such Debentures held by each holder of
Debentures to be redeemed in accordance with its customary procedures.
If, at any time, a Tax Event (as defined below) shall occur or be
continuing after receipt of a Dissolution Tax Opinion (as defined below) and
(i) the Regular Trustees and the Company shall have received an opinion (a
"Redemption Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more
than an insubstantial risk that the Company would be precluded from deducting
the interest on the Debentures for United States federal income tax purposes
even if the Debentures were distributed to the holders of Preferred Securities
and Common Securities in liquidation of such holder's interest in AES Trust VII
as set forth in the Declaration of Trust or (ii) the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion (as
defined below) cannot be delivered to AES Trust VII, the Company shall have the
right at any time, upon not less than 30 nor more than 60 days' notice, to
redeem the Debentures in whole or in part for cash at a price equal to 100% of
the principal amount thereof, together with any accrued and unpaid interest
thereon, including Compounded Interest if any, to, but excluding the date of
redemption, within 90 days following the occurrence of such Tax Event;
provided, however, that, if at the time there is available to the Company or
the Regular Trustees on behalf of AES Trust VII the opportunity to eliminate,
within such 90 day period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
AES Trust VII, the Company or the holders of the Preferred Securities, the
Company or the Regular Trustees on behalf of AES Trust VII will pursue such
measure in lieu of redemption and provided further that the Company shall have
41
no right to redeem the Debentures while the Regular Trustees on behalf of AES
Trust VII are pursuing any such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that on
or after May 11, 2000, as a result of (a) any amendment to, or change in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action
taken by any governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after May 11, 2000, there is more than an insubstantial risk that (i) AES
Trust VII is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) AES Trust VII is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by the Company to AES Trust VII
on the Debentures is not, or within 90 days of the date thereof will not be,
deductible by the Company for United States federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue ruling of the Internal Revenue Service,
to the effect that the holders of the Preferred Securities will not recognize
any gain or loss for United States federal income tax purposes as a result of a
dissolution of AES Trust VII and distribution of the Debentures as provided in
the Declaration of Trust.
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption or as a result of a Tax Event as described above, the
Debentures will be redeemed pro rata or by lot or in some other equitable
manner determined by the Trustee. Notwithstanding the foregoing, if a partial
redemption of the Debentures would result in the delisting of the Preferred
Securities by any national securities exchange or other organization on which
the Preferred Securities are then listed, the Company shall not be permitted to
effect such partial redemption and will only redeem the Debentures in whole.
42
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for 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 for defeasance at any time of the entire
indebtedness of this Debenture upon compliance by the Company with certain
conditions set forth therein.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture (and, in the case of any series of
Debentures held as trust assets of an AES Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such AES Trust) as may be
required under the Declaration of Trust of such AES Trust to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental indenture shall
(i) extend the fixed maturity of any Debentures 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,
without the consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Debenture (and, in the case of any series of Debentures held as trust
assets of an AES Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred Securities
and the Common Securities of such AES Trust as may be required under the
Declaration of Trust of such AES Trust) then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures of a series at the time
outstanding affected thereby (subject, in the case of any series of Debentures
held as trust assets of an AES Trust and with respect to which a Securities
Exchange has not theretofore occurred, to such consent of holders of Preferred
Securities and Common Securities of such AES Trust as may be required under the
Declaration of Trust of such AES Trust), on behalf of the Holders of the
Debentures of such series, to waive any past default in the
43
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 of the Debentures of such series. Any such consent or waiver by
the registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
Subject to Section 13.12 of the Indenture, no reference herein to the
Indenture (other than such Section) 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 at the rate and in the money
herein prescribed.
So long as the Company is not in default in the payment of interest on the
Debentures, the Company shall have the right, at any time during the term of
the Debentures, from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarterly interest periods (the "Extended
Interest Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate of
6% per annum to the extent permitted by applicable law, compounded quarterly
("Compounded Interest")); provided that no Extended Interest Payment Period may
extend beyond the date of maturity or any redemption date of the Debentures.
During such Extended Interest Payment Period the Company shall not declare or
pay any dividend on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred
stock, or make any guarantee payments with respect thereto, provided that the
foregoing will not apply to any stock dividends, paid by the Company in Common
Stock. Prior to the termination of any such Extended Interest Payment Period,
the Company may pay all or any portion of the interest accrued on the
Debentures on any Interest Payment Date to holders of record on the regular
record date for such Interest Payment Date or from time to time further extend
such Extended Interest Payment Period, provided that such Period together with
all such further extensions thereof shall not exceed 20 consecutive quarterly
interest periods. At the termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest then due,
together with Compounded Interest, the Company may select a new Extended
Interest Payment Period, subject to the foregoing requirements. No interest on
this Debenture shall be due and payable during an Extended Interest Payment
Period, except at the end thereof. At the end of the Extended Interest Payment
Period the Company shall pay all interest accrued and unpaid on the Debentures
including any Compounded
44
Interest which shall be payable to the holders of the Debentures in whose names
the Debentures are registered in the Debenture register on the first record
date after the end of the Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on
the Debenture register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company in the Borough
of Manhattan, The City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the registered holder hereof or his attorney duly
authorized in writing, and thereupon one or more new 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 any Debenture 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 Debenture 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 Debenture
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Holder of any Debenture has the right, exercisable at any time through
the close of business (New York time) on May 14, 2008 (or, in the case of a
Debenture called for redemption, prior to the close of business on the Business
Day prior to the corresponding redemption date), to convert the principal
amount thereof (or any portion thereof that is an integral multiple of $50)
into shares of Common Stock at the initial conversion rate of 1.0811 shares of
Common Stock for each Debenture (equivalent to a Conversion Price of $46.25 per
share of
45
Common Stock, after giving effect to the Common Stock dividend payable on June
1, 2000), subject to adjustment under certain circumstances.
To convert a Debenture, a Holder must (a) complete and sign a conversion
notice substantially in the form attached hereto, (b) surrender the Debenture
to a Conversion Agent, (c) furnish appropriate endorsements or transfer
documents if required by the Conversion Agent and (d) pay any transfer or
similar tax, if required. If a Debenture is surrendered for conversion after
the close of business on any regular record date for payment of a Distribution
and before the opening of business on the corresponding Distribution payment
date, then, notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose name the
Debenture is registered at the close of business on such record date, and
(other than a Debenture or a portion of a Debenture called for redemption on a
redemption date occurring after such record date and prior to such Distribution
payment date) when so surrendered for conversion, the Debenture must be
accompanied by payment of an amount equal to the Distribution payable on such
Distribution payment date. The number of shares issuable upon conversion of a
Debenture is determined by dividing the principal amount of the Debenture
converted by the Conversion Price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest. The outstanding principal amount of any
Debenture shall be reduced by the portion of the principal amount thereof
converted into shares of Common Stock.
[If CERTIFICATED DEBENTURES -- The Debentures of this series are issuable
only in registered form without coupons in denominations of $50 and any
integral multiple thereto.] [If GLOBAL DEBENTURE -- This Global Debenture is
exchangeable for Debentures in definitive form 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 $50 or
any integral multiple thereof.] As provided in the Indenture and subject to
certain limitations [If GLOBAL DEBENTURE -- herein and] therein set forth,
Debentures of this series [If GLOBAL DEBENTURE -- so issued] 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 which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
46
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: The AES Corporation
The undersigned owner of this Debenture hereby irrevocably exercises the
option to convert this Debenture, or the portion below designated, into Common
Stock of THE AES 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 Portions of Debenture to be converted ($50
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:1______
--------
1 Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements
include membership of participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
47
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
Guarantee2:_________________________________________________
---------
2 Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements
include membership of participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
48
ARTICLE 7
ORIGINAL ISSUE OF SERIES 6% DEBENTURES
SECTION 7.01. Except as provided in Section 1.01 and this Section 7.01,
Series 6% Debentures in the aggregate principal amount equal to $412,371,150
may, upon execution of this Seventh 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 President,
or any Vice President and its Treasurer or an Assistant Treasurer, without any
further action by the Company. Upon exercise of the overallotment option set
forth in the Purchase Agreement, additional Series 6% Debentures in the
aggregate principal amount of up to $62,855,650 may be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Series 6%
Debentures executed as aforesaid by the Company, to or upon the written order
of the Company, which order shall be accompanied by evidence satisfactory to
the Trustee that the overallotment option has been exercised.
ARTICLE 8
MISCELLANEOUS PROVISIONS
SECTION 8.01. Except as otherwise expressly provided in this Seventh
Supplemental Indenture or in the form of Series 6% Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
said form of Series 6% Debenture that are defined in the Indenture shall have
the several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this Seventh Supplemental
Indenture, is in all respects ratified and confirmed. This Seventh Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.
SECTION 8.03. 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 Seventh Supplemental Indenture.
SECTION 8.04. This Seventh 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.
49
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.
THE AES CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
Chief Financial Officer
Attest:
/s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
Attest:
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Officer
50
