EXHIBIT 4.2
================================================================================
PENNZOIL COMPANY
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
As Trustee
Third Supplemental Indenture
Providing for
_____% Exchangeable Senior Debentures Due July 15, 2008
Dated as of _______________, 1998
Supplementing Indenture dated as of December 15, 1992
================================================================================
1
THIRD SUPPLEMENTAL INDENTURE, dated as of _______________, 1998
("Third Supplemental Indenture") between PENNZOIL COMPANY, a corporation
organized and existing under the laws of the State of Delaware (hereinafter
called the "Company"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national
banking association, incorporated and existing under the laws of the United
States of America (formerly known as Texas Commerce Bank National Association),
having its principal corporate trust office in the City of Houston, Texas
(hereinafter called the "Trustee").
WHEREAS, the Company has executed and delivered its Indenture dated as
of December 15, 1992 (hereinafter called the "Indenture"), to provide for the
issue of one or more series of debt securities of the Company; and
WHEREAS, Section 901 of the Indenture authorizes the Company and the
Trustee to enter into supplemental indentures to establish the form or terms of
securities of any series as permitted by sections 201 and 301 of the Indenture;
and
WHEREAS, to so provide for the establishment of such a series, the
Company has authorized the execution of this Third Supplemental Indenture to the
Indenture and has requested the Trustee to execute the Third Supplemental
Indenture; and
WHEREAS, all conditions and requirements necessary to make this Third
Supple mental Indenture a valid, binding and legal instrument have been done
and performed and the execution and delivery hereof have been in all respects
duly authorized, including the delivery to the Trustee of the Opinion of Counsel
referenced in Section 903 of the Indenture;
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH that the
Company and the Trustee hereby covenant, declare and agree as follows:
ARTICLE ONE
101. Third Series of Debentures.
There shall be a series of Securities (capitalized terms used herein
and not otherwise defined have the meanings given to such terms in the
Indenture) designated "____% Exchangeable Senior Debentures Due July 15, 2008"
(herein sometimes referred to as "Debentures"), and the form thereof, which
shall be established by Board Resolution, shall contain suitable provisions with
respect to the matters hereinafter in this Section 101 specified. Debentures
shall mature on and bear interest and be limited in aggregate principal amount
as to each maturity as set forth below:
Aggregate Interest
Principal Rate
Amount Maturity Per Annum
--------- ------------- ----------
$___________ July 15, 2008 ____%
2
Debentures shall be issued as Registered Debentures in denominations of U.S.
$1,000 or integral multiples thereof; interest on Debentures shall be payable
semiannually on July 15 and January 15 of each year, commencing January 15,
1999. The Place of Payment with respect to the Debentures is
______________________________, 00 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and Chase Bank of Texas, National Association, 000 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxx, Xxxxx 00000.
102. Exchange or Transfer.
Upon any exchange or transfer of Debentures, the Company may make a
charge therefor sufficient to reimburse it for any tax or taxes or other
governmental charge, as provided in Section 305 of the Indenture, but the
Company hereby waives any right to make a charge in addition thereto for any
exchange or transfer of Debentures.
103. Redemption.
(a) The Debentures shall be subject to redemption upon not less than
30 nor more than 60 days' prior notice as provided in Sections 107 and 1104 of
the Indenture at any time on or after July 15, 2000, in whole or from time to
time in part, at the option of the Company, at the following redemption prices
(expressed as a percentage of the principal amount at maturity) if redeemed
during the 12-month period beginning July 15 of the following years:
Redemption
Year Price
---- -----
2000
2001
2002
2003
2004
2005
2006
2007
in each case together with accrued interest to the redemption date, provided,
however, that, if any interest payment date on the Debentures is on or prior to
the Redemption Date, such interest shall be payable to the Holders of such
Debentures, registered as such, at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of Section 307 of the
Indenture.
(b) Notice of intention to redeem the Debentures in whole or in part
shall be given in accordance with Section 1104 of the Indenture.
104. Sinking Fund.
3
The Debentures shall not be entitled to the benefits of any sinking
fund provisions.
105. Tax Matters.
(a) Subject to Section 105(c) hereof, in addition to the conditions
set forth in Section 401 of the Indenture, the right of the Company to satisfy
the Indenture to the extent set forth in Section 401 of the Indenture shall be
subject to the condition that the Company has delivered to the Trustee an
Opinion of Counsel (as defined in the Indenture) that the satisfaction and
discharge pursuant to Section 401 of the Indenture will not cause the Holders of
the Debentures to recognize income, gain or loss for United States federal
income tax purposes.
(b) Subject to Section 105(c) hereof, in addition to the conditions
set forth in Section 403 of the Indenture, the right of the Company to satisfy
the Indenture with respect to the Debentures to the extent set forth in Section
403 of the Indenture shall be subject to the conditions that the Company shall
have received from, or there shall have been published by, the United States
Internal Revenue Service a ruling to the effect that the satisfaction and
discharge to the extent set forth in Section 403 of the Indenture will not cause
the Holders of the Debentures to recognize income, gain or loss for United
States federal income tax purposes.
(c) Notwithstanding the satisfaction and discharge of the Indenture or
with respect to the Debentures pursuant to Sections 105(a) and (b) hereof, the
obligations of the Company under Article Two hereof shall survive until the
Debentures are no longer Outstanding.
106. Issuance of Debentures.
Upon the delivery of this Third Supplemental Indenture, Debentures in
the aggregate principal amount of $_________ shall be issued and be Outstanding
as provided in the Indenture.
107. Global Debentures.
The provisions of paragraphs (a), (b), (c) and (d) below shall apply
only to Global Debentures:
(a) Each Global Debenture authenticated under the Indenture and this
Third Supplemental Indenture shall be registered in the name of the Depository
designated for such Global Debenture or a nominee thereof and delivered to such
Depository or a nominee thereof or custodian therefor, and each such Global
Debenture shall constitute a single Debenture for all purposes of this Third
Supplemental Indenture.
(b) Notwithstanding any other provision in the Indenture or this Third
Supplemental Indenture, no Global Debenture may be exchanged in whole or in part
for Debentures registered, and no transfer of a Global Debenture in whole or in
part may be registered, in the name of any Person other than the Depositary for
such Global Debenture or a nominee thereof unless (A) such Depositary (i) has
notified the Company that it is unwilling or unable to continue as
4
Depositary for such Global Debenture and the Company thereupon fails to appoint
a successor depositary or (ii) has ceased to be a clearing agency registered
under the Exchange Act, (B) there shall have occurred and be continuing an Event
of Default or any event which after notice or lapse of time or both would be an
Event of Default with respect to the Debentures or (C) the Company in its sole
discretion determines that such Global Debenture shall be so exchangeable or
transferable.
(c) Subject to Section 107(b), upon issuance of Debentures in
definitive registered certificated form, the Trustee shall register the
Debentures in the name of, and cause the Debentures to be delivered to, the
Person or Persons (or the nominee thereof) identified as the beneficial owners
as the Depositary shall direct.
(d) Every Debenture authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Debenture or any portion
thereof, whether pursuant to this Section, Section 304 or 306 of the Indenture
or otherwise, shall be authenticated and delivered in the form of, and shall be,
a Global Debenture, unless such Debenture is registered in the name of a Person
other than the Depositary for such Global Debenture or a nominee thereof.
108. Form of Legend for Global Debentures.
Every Global Debenture authenticated and delivered hereunder shall
bear a legend in substantially the following form:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO PENNZOIL COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS
CERTIFICATE OR ANY PORTION HEREOF IS REGISTERED IN THE NAME OF CEDE & CO. (OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR A
NOMINEE THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THIS DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE THIRD
SUPPLEMENTAL INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
A DEPOSITARY OR A NOMINEE THEREOF. THIS DEBENTURE MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A DEBENTURE REGISTERED, AND NO TRANSFER OF THIS DEBENTURE IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE THIRD SUPPLEMENTAL INDENTURE.
109. Depositary. The Depositary with respect to any Global Debenture
authenticated under the Indenture and this Third Supplemental Indenture shall be
The Depository
5
Trust Company or such other clearing agency registered under the Exchange Act
that is designated by the Company to act as Depositary with respect to
Debentures issued in the form of one or more Global Debentures.
ARTICLE TWO
201. Right of Exchange.
Subject to and upon compliance with the provisions of this Section
201, at the option of the Holder thereof, beginning _______________, 1998, any
Debenture or any portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000, may (unless the Company shall have elected,
pursuant to Section 216 hereof, to pay to the Holder an amount in cash equal to
the value of the Exchange Property, in which case the provisions of Section 216
hereof shall be followed), at any time on or before the close of business on
July 15, 2008, or in the case of Debentures or portions thereof called for
redemption in accordance with Section 1101 of the Indenture, on or before the
close of business on the Business Day next preceding the Redemption Date, be
exchanged for fully paid and nonassessable shares (calculated as to each
exchange to the nearest 1/10,000 of a share) of Chevron Common Stock (as defined
in Section 219 hereof) (or such other securities, property or cash as shall be
added to such Chevron Common Stock or as such Chevron Common Stock shall have
been changed into pursuant to this Article Two) at the Exchange Rate (as defined
below) hereinafter provided.
The rate at which shares of Chevron Common Stock shall be deliverable
upon exchange (herein called the "Exchange Rate") shall be initially 0.823
shares of Chevron Common Stock for each $1,000 principal amount of Debentures
exchanged. The Exchange Rate shall be subject to adjustment as provided in
Sections 204, 205, 211 and 215 hereof.
202. Method of Exchange.
In order to exercise the right of exchange, the Holder shall surrender
such Debenture to the Exchange Agent (as defined in Section 219 hereof) for
exchange by delivering such Debenture to, or mailing such Debenture by
registered mail, postage prepaid, addressed to the Exchange Agent at the office
or agency of the Company, maintained for that purpose pursuant to Section 1002
of the Indenture, accompanied in each case by written notice to the Company and
the Exchange Agent that the Holder elects to exchange such Debenture, or, if
less than the entire principal amount of such Debenture is to be exchanged, the
portion thereof to be exchanged.
The notices in the above paragraph shall also state the name or names
(with address) in which the certificate or certificates for shares of Chevron
Common Stock or, to the extent applicable, other Exchange Property which shall
be issuable on such exchange shall be issued. Debentures surrendered for
exchange shall be accompanied (if so required by the Company or the Exchange
Agent) by proper assignments thereof to the Company.
6
If the Company does not elect to deliver cash in lieu of Chevron
Common Stock or other Exchange Property pursuant to Section 216 hereof, as
promptly as practicable after the proper surrender of such Debenture for
exchange as aforesaid (subject however to the following paragraph of this
Section 202 and Section 216 hereof) and in accordance with the procedures set
forth in the Exchange Agreement (as defined in Section 219 hereof), the Company
shall or shall cause the Exchange Agent to deliver to such Holder, or on his
written order a certificate or certificates for the number of whole shares of
Chevron Common Stock and/or any other Exchange Property deliverable upon
exchange of such Debenture (or specified portion thereof). In addition,
provision shall be made for any fraction of a share as provided in Section 203
hereof and any payment of interest as provided by the following paragraph. Such
exchange shall be deemed to have been effected immediately prior to the close of
business on the date on which such Debenture shall have been properly
surrendered for exchange as aforesaid, which shall be the date on which such
Debenture and notice and any such required payment and assignment shall be
received by the Exchange Agent, and at such time the rights of the Holder of
such Debenture as a Debenture holder shall cease and the Person or Persons in
whose name or names any certificate or certificates for shares of Chevron Common
Stock or other Exchange Property shall be deliverable upon such exchange shall,
as between such Person or Persons and the Company, be deemed to have become the
Holder or Holders of record of the shares or other property represented thereby.
Upon any exchange of a Debenture pursuant to this Article Two (i) if
the Debenture to be exchanged has been called for redemption by the Company, the
Holder shall receive accrued interest thereon through the date an exchange under
this Section 202 is deemed effective and (ii) if the Debenture to be exchanged
has not been called for redemption by the Company, the Holder shall not receive
any payment of accrued and unpaid interest.
Delivery of such certificate or certificates and of any check for any
cash or other Exchange Property may be delayed for a reasonable period of time
at the request of the Company in order to effectuate the calculations of the
adjustments pursuant to this Article Two, to obtain any certificate representing
securities to be delivered, to complete any reapportionment of the shares of
Chevron Common Stock or other Exchange Property apportioned thereto which is
required by this Article Two or to comply with any applicable law. If, between
the date an exchange under this Section 202 is deemed effected and the date of
delivery of the applicable security or securities, such security or securities
shall cease to have any or certain rights, or a record date or effective date of
a transaction to which Section 204, 205 or 211 hereof applies shall occur, the
Person entitled to receive such security or securities shall be entitled only to
receive such security or securities as so modified and any dividends or proceeds
received thereon on or after the date such exchange is deemed effected and none
of the Company, the Trustee and the Exchange Agent shall be otherwise liable
with respect to the modification of such security or securities, from the date
such exchange is deemed effected and the date of such delivery.
Except as otherwise expressly provided in this Article Two, no payment
or adjustment shall be made upon any exchange on account of any interest accrued
on the Debentures surrendered for exchange or on account of any dividends on the
Chevron Common Stock or other Exchange Property delivered upon such exchange;
provided, however that interest accrued on any
7
Debentures surrendered for exchange on or after any Regular Record Date and
before any Interest Payment Date relating thereto shall be paid to, as
applicable, the Holder of record as of such record date.
In the case of any Debenture which is exchanged in part only, upon
such exchange the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a Debenture or
Debentures of authorized denominations in principal amount equal to the
unexchanged portion of such Debenture.
203. Fractional Interests.
No fractional shares of Chevron Common Stock (or any form of
fractional interest in any other security or property which is part of the
Exchange Property) shall be delivered upon exchanges of Debentures. If more
than one Debenture shall be surrendered for exchange at one time by the same
Holder, the number of whole shares (or other integral units of such other
securities or property), which shall be delivered upon exchange shall be
computed by the Company on the basis of the aggregate principal amount of the
Debentures (or specified portions thereof to the extent permitted hereby) so
surrendered. Instead of any fractional share (or other fractional unit) which
would otherwise be deliverable upon exchange of any Debenture or Debentures (or
specified portions thereof), the Exchange Agent on behalf of the Company shall
pay, on the date the exchange is deemed to be effected, a cash adjustment in
respect of such fractional interest in an amount equal to the same fraction of
the Market Price (as defined in Section 219 hereof) per share of the Chevron
Common Stock (or per unit of such other security or property) on the Business
Day next preceding the date the exchange is deemed to be effected. The Company
shall authorize the Exchange Agent to obtain the funds necessary or anticipated
by the Exchange Agent to be necessary, for payment of such fractional interests
by the sale of shares of Chevron Common Stock (or other securities or property
which are part of the Exchange Property) held by the Exchange Agent, provided
that after such sale the number of shares of Chevron Common Stock (and of such
other securities or property) held by the Exchange Agent shall be sufficient to
permit the exchange of all Outstanding Debentures for Chevron Common Stock (and
any other Exchange Property), on the basis of the Exchange Rate then in effect,
in accordance with the provisions of this Article Two. The Company agrees to
furnish or cause to be furnished to the Exchange Agent any additional funds
required to permit such cash payments with respect to fractional interests.
204. Adjustment of Exchange Rate.
(a) In the event Chevron (as defined in Section 219 hereof) shall (i)
pay a dividend on Chevron Common Stock in shares of Chevron Common Stock, (ii)
subdivide the outstanding shares of Chevron Common Stock into a greater number
of shares of Chevron Common Stock, (iii) combine outstanding shares of Chevron
Common Stock into a smaller number of shares of Chevron Common Stock, or (iv)
issue, by reclassification of shares of Chevron Common Stock, any shares of its
common stock (which in any such case shall apply to the shares of Chevron Common
Stock held by the Exchange Agent under the Exchange Agreement), the Exchange
Rate in effect immediately prior thereto shall be proportionately adjusted so
that the Holder of any
8
Debentures thereafter surrendered for exchange shall be entitled (subject to
Sections 215 and 216 hereof) to receive the number and kind of shares of Chevron
Common Stock which such Holder would have owned or have been entitled to receive
after the happening of any of the events described above, had such Debentures
been exchanged immediately prior to the record date (or if there is no record
date, the effective date) of such event. Such adjustments shall be made
whenever any of the events listed above shall occur and shall become effective
as of immediately after the close of business on the record date in the case of
a stock dividend and shall become effective as of immediately after the close of
business on the effective date in the case of a subdivision or combination or
reclassification. Any Holder surrendering any Debentures for exchange after
such record date or such effective date, as the case may be, shall be entitled
to receive shares of Chevron Common Stock at the Exchange Rate as so adjusted
pursuant to this Section 204(a) (subject to Sections 215 and 216 hereof) and any
other Exchange Property apportioned thereto.
(b) Notwithstanding the foregoing provisions, no adjustment in the
Exchange Rate shall be required unless such adjustment would require an increase
or decrease in such Exchange Rate of more than 1%, provided, however, that any
adjustments which by reason of this paragraph (b) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
(c) All calculations under this Section 204 shall be made to the
nearest 1/10,000 of a share.
(d) Whenever the Exchange Rate is adjusted as herein provided, the
Company shall determine the adjusted Exchange Rate in accordance with this
Section 204 and shall prepare an Officer's Certificate setting forth such
adjusted Exchange Rate and any cash or other property apportioned to the Chevron
Common Stock and showing in detail the facts upon which such adjustment is
based. Such certificate shall be conclusive evidence of the correctness of such
adjustment. Such certificate shall forthwith be filed with the Exchange Agent
and the Trustee, who may rely on such Officer's Certificate as conclusive
evidence of the correctness of the adjustment. A notice stating that the
Exchange Rate has been adjusted and setting forth the adjusted Exchange Rate and
any cash or other property apportioned to the Chevron Common Stock shall, as
soon as practicable, be mailed by or on behalf of the Company to the Holders of
Debentures at their last addresses as they shall appear upon the Security
Register.
205. Exchange Agreement.
(a) Simultaneously with the execution and delivery of this Indenture
Supplement, the Company is entering into the Exchange Agreement with Chase Bank
of Texas, National Association, a national banking association, incorporated and
existing under the laws of the United States of America, as Exchange Agent,
pursuant to which the Company is depositing with the Exchange Agent __________
shares of Chevron Common Stock, which in the aggregate shall initially
constitute the Exchange Property. The Exchange Agent shall be the exchange
agent for the exchange of Debentures for Chevron Common Stock and other Exchange
Property, if any, hereunder. The Company shall deposit with the Exchange Agent
from time to time such additional
9
number of shares of Chevron Common Stock not already held by the Exchange Agent
as the Holders of all Outstanding Debentures shall from time to time be
entitled to receive from the Exchange Agent pursuant to this Article Two upon
exchange thereof.
(b) All cash received by the Exchange Agent as herein provided will be
invested upon written request of the Company by the Exchange Agent from time to
time as so requested by the Company pursuant to the Exchange Agreement. The
Company shall be entitled to all cash dividends paid on the Exchange Property
held by the Exchange Agent except to the extent that such dividends are paid
pursuant to a plan of liquidation or partial liquidation or a recapitalization
or restructuring or other extraordinary cash dividends, and to all interest
payments on any debt securities included in the Exchange Property which Holders
of Debentures may be entitled to receive on exchange hereunder; provided, that
if the Exchange Agent shall receive any such cash dividends or interest to which
the Company is entitled pursuant hereto, the Exchange Agent shall not be
required to transfer to the Company any such dividends or interest to which the
Company is entitled pursuant hereto until receipt of an Officers' Certificate to
the effect that the Company is entitled to such dividends or interest pursuant
hereto. The Company shall also be entitled to any interest or gain on
investments made by the Exchange Agent pursuant to Section 11 of the Exchange
Agreement, which shall be paid to the Company on demand as provided in the
Exchange Agreement. Any loss on such investments shall be for the account of
the Company and the amount thereof shall be reimbursed to the Exchange Agent by
the Company. The Exchange Agent shall hold and apply as hereinafter provided
all other dividends paid on the Exchange Property held by the Exchange Agent
under the Exchange Agreement.
(c) In case there shall be, at any time while any Debentures are
Outstanding, any distribution of cash, securities or other property on Exchange
Property (other than (i) cash dividends to which the Company is entitled and
interest paid on debt securities, as specified in paragraph (b) of this Section
205, (ii) dividends, subdivisions, combinations and reclassifications for which
an adjustment in the Exchange Rate is made pursuant to Section 204 hereof and
(iii) securities or other property received in a transaction to which Section
211 hereof applies) or in case there shall be granted with respect to any
Exchange Property, any transferable subscription rights, options, warrants or
other similar transferable rights, the Company shall, as soon as reasonably
practicable after its receipt thereof, notify the Exchange Agent of such receipt
and promptly, and in any event within five business days of the receipt thereof,
deposit with the Exchange Agent all such securities and other property,
including any transferable rights, pursuant to the Exchange Agreement, and
concurrently with such deposit, shall (except as provided in the succeeding
paragraph) instruct the Exchange Agent to sell all securities and other property
so received by way of distribution and all rights for cash so distributed in
such manner as the Company shall instruct in writing and shall apply the
proceeds from the sale thereof as hereinafter provided. To the extent that the
Company shall, within 10 days of its notification to the Exchange Agent of the
Company's receipt of such cash, securities or other property, including any
transferrable rights, furnish the Exchange Agent with an Opinion of Counsel to
the effect that such distribution or grant or the sale of the securities or
other property received on such distribution or the rights received by such
grant is taxable to the Company or the Exchange Agent and an Officers'
Certificate as to the amount of federal, state and local tax payable by the
Company and the Exchange Agent as a result of such distribution or grant and
10
estimated to be payable as a result of such sale (computed by the Company at the
highest marginal tax rates applicable to such transaction or transactions), the
Exchange Agent shall pay to, or to the order of the Company, in the case of
taxes payable by the Company, or itself, in the case of taxes payable by it,
from the cash received in such distribution, if any, or cash apportioned to
Chevron Common Stock hereunder or from the net cash proceeds received from such
sale, the amount of such tax as so computed by the Company. In the case of
taxes estimated to be payable as a result of such sale, the Company shall
deliver an Officers' Certificate within 10 days after completion of such sale
stating the actual taxes payable as so computed and appropriate adjustment of
such payments shall thereupon be made. The remaining portion of such cash
received, if any, and net cash proceeds shall be apportioned equally among the
Exchange Property for which outstanding Debentures are exchangeable as of
immediately after the close of business on the record date for. the distribution
or grant to which this paragraph (c) applies, or, if there is no such record
date, the effective date of such distribution or grant. Any Holder surrendering
any Debentures after such record date, or such effective date, as the case may
be, shall be entitled to receive, in addition to the Exchange Property for which
such Debentures are exchangeable and any cash theretofore apportioned hereunder,
the amount of cash so apportioned to such shares of Chevron Common Stock.
Notwithstanding the foregoing, however, in the event of any such
distribution of securities or other property, including transferable rights,
which is convertible, without payment of consideration, into Exchange Property,
and which right of conversion does not expire before the retirement of such
securities or other property, the Company shall, after any sale required for
payment of any taxes owed by the Company, or the Exchange Agent, as provided in
the preceding paragraph, instruct the Exchange Agent to retain and hold all such
securities and other property as additional Exchange Property for apportionment
equally among other Exchange Property for which Debentures are exchangeable as
of immediately after the close of business on the record date for the
distribution or grant to which this Section 205 applies, or, if there is no such
record date, the effective date of such distribution or grant; provided,
however, that if the amount of cash deliverable to the holders of such
securities or other property, including transferable rights, for each unit of
such securities or other property upon the retirement thereof is less than the
average of the high and low reported public sales prices for each such unit for
the seven Business Days preceding the date 15 Business Days prior to the date of
their retirement the Exchange Agent shall sell all such securities and other
property prior to the third Business Day prior to the date of their retirement
and, after the payment, from the net proceeds received from such sale by the
Exchange Agent, of any taxes incurred by the Exchange Agent or the Company in
connection with such sale, the remaining cash proceeds of such sale shall be
apportioned equally among the Exchange Property for which Outstanding
Debentures are exchangeable as of the Business Day following the day such sale
is concluded.
In the event that a distribution or grant of cash, securities or other
property on Exchange Property shall be effected as contemplated by the two
immediately preceding paragraphs, a notice stating that such distribution or
grant has occurred and setting forth the additional cash, securities or other
property on the Exchange Property shall as soon as practicable be mailed by or
on behalf of the Company to the Holders of Debentures at their last addresses as
they appear upon the Security Register.
11
In case there shall be, at any time while any Debentures are
outstanding, any distribution or grant to holders of Chevron Common Stock (or
other Exchange Property), including the Company (with respect to any Exchange
Property held by the Exchange Agent), of any nontransferable subscription
rights, options, warrants or other similar nontransferable rights that shall, by
the terms of such rights, permit the Company to distribute such rights to the
Holders of Debentures, then the Company and the Exchange Agent shall cause such
rights to be distributed to the Holders of record of Debentures shown on the
Security Register as of immediately after the close of business on the record
date (and if there is no record date, the close of business on the effective
date) for such distribution or grant; provided, however, that if the Company
shall furnish the Exchange Agent with an Opinion of Counsel to the effect that
such distribution or grant, or such distribution by the Company or the Exchange
Agent to Holders of Debentures, is taxable to the Company or the Exchange Agent
and an Officer's Certificate as to the amount of federal, state and local tax
payable by the Company and the Exchange Agent as a result of such distribution
or grant, the Exchange Agent shall to the extent legally permissible sell for
cash in such manner as the Company shall instruct in writing such of the rights
as shall be sufficient to provide to the Company and the Exchange Agent a cash
payment equal to the amount of taxes payable by the Company and the Exchange
Agent, respectively, arising from such distribution or grant (as computed by the
Company at the highest marginal tax rates applicable to such transaction or
transactions and any sale of such rights or, if such sale is not permissible or
the proceeds thereof are not sufficient, the Exchange Agent shall cause an
amount of cash held for exchange by the Exchange Agent (if any) and, if such
cash is not sufficient for the applicable tax payments, an amount of Exchange
Property, to be segregated for the benefit of or delivered to the Company. The
remaining Exchange Property held by the Exchange Agent shall be proportionately
adjusted so as to be apportioned equally to the Debentures outstanding as of
immediately after the close of business on the record date for the distribution
or grant to which this paragraph applies, or, if there is no such record date,
immediately after the close of business on the effective date of such
distribution or grant. Any Holder surrendering any Debentures after such record
date, or such effective date, as the case may be, shall be entitled to receive
any Exchange Property apportioned thereto as so adjusted pursuant to this
paragraph.
(d) In the event of any reduction of the principal amount of
Debentures Outstanding (other than as a result of surrender for exchange for
Exchange Property pursuant to this Article Two), as evidenced by the delivery to
the Trustee by the Company of Debentures for cancellation, the Company shall be
entitled to the kind and amount of Exchange Property as shall at the time be in
excess of the kind and amount of Exchange Property which would be required for
the exchange of all Debentures then Outstanding for the Exchange Property on the
basis of the then Exchange Rate and the other terms and provisions of this
Article Two and the Exchange Agreement. Upon expiration of the right to
surrender Debentures for exchange pursuant to this Article Two and the Exchange
Agreement and when all other obligations of the Company shall have been
satisfied under this Article Two and the Exchange Agreement, the Company's
obligation to exchange Debentures for Exchange Property shall be terminated.
(e) The Exchange Agent shall not make any distribution of Exchange
Property to the Company prior to the receipt by the Exchange Agent from the
Company of an Officers'
12
Certificate to the effect that no Event of Default exists hereunder and no event
or condition which with notice or lapse of time or both would become such an
Event of Default and which states in detail the basis asserted by the Company
for such distribution.
(f) The Company shall be entitled to any net income or gain resulting
from investments of cash made by the Exchange Agent pursuant to the Exchange
Agreement and shall reimburse the Exchange Agent for any losses realized in
respect of such investments.
(g) The Company shall have the full and unqualified right and power to
exercise any rights to vote, or to give consents or take any other action in
respect of, the Chevron Common Stock or any other securities included in the
Exchange Property at any time held by the Exchange Agent, and the Exchange Agent
shall have no duty to exercise any such rights. The Company shall not be liable
to any Holder as a result of any vote, or failure to vote, consent or failure to
consent, or any other act or failure to act taken by the Company in respect of
the Chevron Common Stock or any other securities included in the Exchange
Property.
(h) The obligations, covenants and agreements contained in the
Exchange Agreement shall not constitute obligations, covenants or agreements
contained in the Indenture, this Third Supplemental Indenture or any of the
Debentures and neither the failure by the Company to observe any obligation,
covenant or agreement contained in the Exchange Agreement (unless such
obligation, covenant or agreement shall also be contained in this Third
Supplemental Indenture) nor the failure of the Exchange Agent to fulfill any
obligations, agreements or covenants set forth therein shall constitute (with or
without the giving of notice, the passage of time or both) an Event of Default;
provided, however, that nothing in this paragraph shall impair the right of a
Holder to receive the Exchange Property apportioned to such Holder's Debentures
in exchange for such Debentures in accordance with the terms and conditions of
this Article Two, and nothing in this paragraph shall impair the rights and
remedies of the Trustee and the Holders under Article Five of the Indenture with
respect to a failure by the Company to observe its express agreements and
covenants to cause the exchange of Debentures actually surrendered for exchange
pursuant to this Article Two for Exchange Property apportioned thereto in
accordance with the terms and conditions of this Article Two.
206. Company to Give Notice of Certain Events.
If at any time:
(a) Chevron shall declare a dividend (or any other distribution) on
the Chevron Common Stock which the Exchange Agent would be required to apply for
the benefit of the Holders of the Debentures in accordance with Section 205
hereof; or
(b) Chevron shall authorize the granting of subscription rights,
options, warrants or other similar rights to holders of Chevron Common Stock; or
13
(c) there shall occur any reclassification of Chevron Common Stock
(other than a subdivision or combination of outstanding shares of Chevron Common
Stock) or any consolidation or merger to which Chevron is a party and for which
approval of any stockholders of Chevron is required, or the sale or transfer of
all or substantially all of the assets of Chevron; or
(d) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of Chevron;
then the Company shall as promptly as practicable cause to be filed at the
office or agency maintained pursuant to Section 1002 of the Indenture and cause
to be mailed to the Holders of Debentures at their last addresses as they shall
appear upon the Security Register a notice stating (x) the date, if known by the
Company, on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights, or, if a record is not to be taken, the date as
of which the holders of Chevron Common Stock of record to be entitled to such
dividend or distribution or grant of rights are to be determined, or (y) the
date, if known by the Company, on which such reclassification, merger,
consolidation, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Chevron Common Stock of record shall be entitled to exchange their
shares of Chevron Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
207. Covenants by the Company.
So long as any Debentures shall be Outstanding and exchangeable for
Chevron Common Stock or other Exchange Property pursuant to this Article Two,
the Company shall (i) preserve unimpaired the right of each Holder of
Debentures, upon exchange thereof, to receive shares of Chevron Common Stock or
other Exchange Property as such Holder shall from time to time be entitled to
receive in accordance with the provisions of this Article Two, and (ii) not
pledge, mortgage, hypothecate or grant a security interest in, or permit any
mortgage, pledge, security interest or other lien upon, the Exchange Property.
208. Transfer Taxes.
The Company will pay any and all taxes that may be payable in respect
of the transfer and delivery of shares of Chevron Common Stock (or other
securities included in the Exchange Property) pursuant hereto, other than
income, capital gains and similar taxes imposed on any Holder by reason of
exchange of Debentures for Exchange Property; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the delivery, upon an exchange of Debentures, of shares
of Chevron Common Stock (or other securities included in the Exchange Property)
in a name other than that in which the Debentures so exchanged were registered,
and no such transfer shall be made unless and until the Person requesting such
transfer has paid to the Company or the Exchange Agent the amount of any such
tax, or has established to the satisfaction of the Company and the Exchange
Agent that such tax has been paid.
14
209. Fully Paid Shares.
The Company warrants and covenants that all shares of Chevron Common
Stock delivered upon the exchange of Debentures will be fully paid and
nonassessable and that each Holder of Debentures who receives shares of Chevron
Common Stock or other Exchange Property in exchange for his Debentures pursuant
to this Article Two will receive valid and marketable title to such Exchange
Property, free and clear of all claims, liens and encumbrances (other than those
that may be created or suffered to exist by such Holder). Except as provided in
Section 208 hereof, the Company will pay all taxes, liens and charges with
respect to the delivery of Exchange Property in exchange for Debentures
hereunder.
210. Cancellation of Debentures.
All Debentures delivered for exchange shall be delivered by the
Exchange Agent to the Trustee and be canceled by the Trustee, and the Trustee
shall dispose of the same as provided in Section 309 of the Indenture.
211. Merger of Chevron
In case of any consolidation or merger of Chevron with or into any
other Person that results in shares of Chevron Common Stock, as constituted
prior to the consummation of such transaction, being converted into other
securities and/or property (including cash), or in case of any sale or transfer
of all or substantially all of the assets of Chevron (if in connection with such
sale or transfer holders of Chevron Common Stock receive other securities and/or
property including cash, in exchange for their shares of Chevron Common Stock),
or of any voluntary or involuntary dissolution, liquidation or winding-up of
Chevron, the Company shall execute and deliver to the Trustee a supplemental
indenture, and to the Exchange Agent a supplement to the Exchange Agreement,
each providing that the Holder of each Debenture then Outstanding shall have the
right thereafter (subject to Sections 215 and 216 hereof) to exchange such
Debenture (i) for the kind and amount of securities and other property
receivable upon such consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up by a holder of the number of shares of Chevron Common
Stock for which such Debenture was exchangeable immediately prior to such
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
and (ii) the kind and amount of securities (other than Chevron Common Stock) and
other Exchange Property for which such Debenture was exchangeable immediately
prior to such consolidation, merger, sale, transfer, dissolution, liquidation or
winding up. Such supplemental indenture shall provide for adjustments and
rights to receive and retain dividends or their equivalents, which shall be as
nearly equivalent as may be practicable to the adjustments and rights to receive
and retain dividends or their equivalents provided for in this Article Two. The
above provisions of this Section 211 shall similarly apply to any successive
consolidation, merger, sale, transfers, dissolution, liquidation or winding-up.
Notice of such supplemental indenture shall as soon as practicable be
filed with the Exchange Agent and mailed by or on behalf of the Company to the
Holders of Debentures at their last addresses as they shall appear on the
Security Register.
15
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property or cash receivable by the Debenture holders upon the exchange of their
Debentures as herein provided after any such consolidation, merger, sale,
transfer, dissolution, liquidation or winding up or to any adjustment to be made
with respect thereto.
212. Certain Tender or Exchange Offers for Exchange Property.
In the event of a tender offer or exchange offer for any class of
securities included within the Exchange Property (i) if the Company owns shares
of such class which are not subject to the Exchange Agreement, the Company will
cause the Exchange Agent to tender such shares of such class in the same
proportion that the Company tenders its securities in such class which are not
subject to the Exchange Agreement, and (ii) if the Company does not own
securities of a class which are subject to the Exchange Agreement, the Company
may, at its option and in its sole discretion, elect to cause the Exchange Agent
to tender all or any portion or none of such class of security included within
the Exchange Property held by the Exchange Agent. The proceeds of the sale of
any such Exchange Property pursuant to any such tender or exchange offer will be
held by the Exchange Agent for the benefit of Holders as provided in this Third
Supplemental Indenture.
213. Obligations of Trustee and Exchange Agent.
Subject to the provisions of Section 601 of the Indenture, neither the
Trustee nor the Exchange Agent shall at any time be under any duty or
responsibility to any Holder of Debentures to determine whether any facts exist
which may require any adjustment of the Exchange Rate, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor the Exchange Agent shall be accountable
with respect to the validity or value (or the kind or amount) of any Exchange
Property which may at any time be issued or delivered upon the exchange of any
Debenture or the market conditions existing at the time of sale of any Exchange
Property; and neither the Trustee nor the Exchange Agent makes any
representation with respect thereto. Neither the Trustee nor the Exchange Agent
shall be responsible, for any failure of the Company to transfer or deliver any
Exchange Property or certificates or other evidence thereof to the Exchange
Agent as provided herein, or subject to the provisions of Section 601 of the
Indenture and the obligations assumed under the Exchange Agreement, to comply
with any of the covenants of the Company contained in this Article Two.
214. Exchange Arrangements in Case of Redemption.
In connection with any redemption of Debentures, the Company may
arrange for the purchase and exchange of Exchange Property of all or any part of
such Debentures by an arrangement with one or more investment bankers or other
purchasers to purchase such Debentures by paying to the Holders thereof, or to
the Trustee in trust for such Holders, on or before the close of business on the
Business Day next preceding the Redemption Date, an amount not less than the
applicable Redemption Price of the Debentures to be purchased, plus interest
accrued to the
16
Redemption Date. Notwithstanding anything to the contrary contained in Article
Eleven of the Indenture, the obligation of the Company to pay the Redemption
Price of such Debentures, plus interest accrued to the Redemption Date, shall be
satisfied and discharged to the extent such amount is so paid by such
purchasers. Any Debentures to be purchased pursuant to such agreement which are
not presented for redemption or not duly surrendered for exchange by the Holders
thereof shall be deemed acquired by such purchasers from the Holders and
surrendered by such purchasers for exchange, all as of immediately prior to the
close of business on the Business Day next preceding the Redemption Date,
subject to payment of the above amount as aforesaid. Notwithstanding anything
to the contrary contained in this Article Two, in the event that any Debentures
subject to such agreement are surrendered for exchange (other than by the
purchasers) by the close of business on the Business Day next preceding the
Redemption Date, the amounts so paid to the Trustee in trust for the Holders of
the Debentures so surrendered for exchange shall be returned to such purchasers.
215. Tax Adjustments in Exchange Rate.
If an event shall occur which causes the Exchange Rate to be subject
to adjustment pursuant to Section 204 hereof, or a merger, consolidation or sale
or transfer of assets or of any voluntary or involuntary dissolution,
liquidation or winding up of Chevron shall occur requiring a supplemental
indenture under Section 211 hereof, and if, within ten days after the effective
date of such transaction, the Company shall furnish the Exchange Agent with an
Opinion of Counsel to the effect that such transaction is taxable to the Company
or the Exchange Agent and an Officers' Certificate as to the amount of federal,
state and local tax payable by the Company or the Exchange Agent as a result of
such transaction (computed by the Company at the marginal tax rate applicable to
such transaction), the Exchange Agent shall pay to, or to the order of, the
Company, in the case of taxes payable by the Company, or itself, in the case of
taxes payable by it, the cash held by it and apportioned or to be apportioned to
the Exchange Property for which Outstanding Debentures are exchangeable, up to
the amount of such taxes. In the event that the cash held by the Exchange Agent
and so apportioned or to be apportioned is insufficient to pay to the Company or
the Exchange Agent the amount of such taxes, the Exchange Agent shall, as soon
as reasonably practicable and to the extent legally permissible, sell in
accordance with written instructions received by the Company, or if no such
instructions are received, as determined by the Exchange Agent, such Exchange
Property (including any securities or other property included therein) as may be
necessary to pay, from the proceeds thereof after payment of any taxes by the
Company or the Exchange Agent on such sale, the amount of any such
insufficiency. The Exchange Agent shall notify the Company and the Trustee of
any such sale and the Exchange Property sold. Following payment of all
necessary amounts to the Company or the Exchange Agent, such Exchange Property
held by the Exchange Agent and any cash apportioned thereto shall be
proportionately adjusted so as to be apportioned equally to the Debentures
Outstanding as of immediately after the close of business on the record date or
the effective date for the transaction to which this Section 215 applies (as
shall be specified in Section 204 or 211 hereof, whichever is applicable). Any
Holder surrendering any Debentures after such record date, or such effective
date, as the case may be, shall be, entitled to receive the Exchange Property
and any cash apportioned thereto as so adjusted pursuant to this paragraph. If
this Section 215 shall apply to a transaction and the sale by the Company of the
consideration receivable therein shall not be legally permissible and the amount
of cash apportioned to the
17
Exchange Property shall not be sufficient to pay all taxes payable by the
Company or the Exchange Agent which arise from such transaction, the Company may
direct the Exchange Agent to segregate for the benefit of the Company or the
Exchange Agent (as the case may be) or deliver to the Company or the Exchange
Agent (as the case may be) an amount of Exchange Property theretofore held by
the Exchange Agent for exchange of Debentures having a Market Value equal to the
unsatisfied portion of the tax payable by the Company or the Exchange Agent (as
the case may be) with respect to such transaction including any tax payable upon
the delivery or sale thereof in order to satisfy the aforementioned tax, and the
Exchange Property shall thereafter be solely for the account of the Company or
the Exchange Agent (as the case may be) and Holders of Debentures shall have no
rights thereto.
In the event that an Opinion of Counsel given pursuant to this Third
Supplemental Indenture concludes that whether taxes are payable by the Company
or the Exchange Agent is uncertain under the then state of the law or facts or
both, the Company shall have the option of requesting the Exchange Agent to
segregate the amount of funds that would be payable (or securities or other
property in lieu thereof), if such taxes were deemed payable, together with the
amount estimated in good faith to be the reasonable costs and expenses
(including attorneys' fees) of obtaining a determination as set forth below.
The Holders shall have no rights to such funds or securities or other property,
which shall be held by the Exchange Agent for the Company (or itself, as the
case may be), the Exchange Property and any cash apportioned thereto deliverable
upon exchange of Debentures pursuant to this Article Two shall be reapportioned
as though such segregated amounts had been paid to the Company or the Exchange
Agent for such taxes, and any Holder surrendering any Debenture after the record
or effective date of the applicable transaction giving rise to an adjustment
pursuant to this Section 215 shall be entitled to receive only such Exchange
Property and any cash apportioned thereto upon exchange of Debentures pursuant
to this Article Two as so reapportioned. The Company shall thereupon in good
faith seek an appropriate determination from the appropriate agencies and, if
judged necessary by the Company in good faith, from appropriate courts, as to
whether taxes are so payable. If an appropriate determination is made that such
taxes are so payable, then the Exchange Agent shall immediately pay the funds or
deliver the securities or other property so segregated to the Company (or, if
taxes are payable by the Exchange Agent, retain such funds or securities or
other property for itself), and if an appropriate determination is made that
such taxes are not payable or an amount of tax is payable which is less than the
amount of funds or property so segregated, then the Exchange Agent, after paying
to the Company (or itself, as the case may be) out of such funds or securities
or other property the reasonable expenses and costs (including attorneys' fees)
of obtaining such determination (and any taxes so payable), shall apportion such
remaining funds or securities or other property which had been so segregated
among the Exchange Property and cash apportioned thereto as of immediately after
the close of business on the record date or the effective date of such
transaction giving rise to an adjustment pursuant to Section 204 or 211 hereof,
whichever is applicable. If any Debenture has been exchanged on or after such
record date or such effective date, as the case may be, and before a
determination is made that no taxes are payable or an amount of tax is payable
which is less than the amount of funds or securities or other property so
segregated, the Company to the extent not previously delivered, shall deliver
such Exchange Property and any cash apportioned thereto as
18
reapportioned following such determination, to the person to which and in the
manner in which the other proceeds of the exchange of such Debenture were
delivered.
216. Cash Equivalent.
Notwithstanding any other provisions in this Article Two, in lieu of
delivering certificates representing shares of Chevron Common Stock or other
Exchange Property in exchange for Debentures surrendered in accordance with
Section 202 hereof, the Company may, at the Company's option, pay to the Holder
surrendering such Debentures an amount in cash equal to the value of the
Exchange Property for which such Debentures are exchangeable (based on the
Market Price on the date of receipt by the Company of the notice of exchange
delivered by such Holder pursuant to Section 202 hereof). Prior to so directing
the Exchange Agent to make any such cash payment, the Company shall deposit with
the Exchange Agent the cash so payable.
217. Repurchase Rights.
In the event that the Company obtains or otherwise releases any
Chevron Common Stock or other Exchange Property in any manner otherwise than as
contemplated by Section 218 hereof, each Holder will have the right ("Repurchase
Right"), at such Holder's option, to require the Company to repurchase all of
such Holder's Debentures, or a portion thereof which is $1,000 or any integral
multiple thereof, in the manner and at the price described below.
Promptly (and in any event within 10 days) after the Company has
obtained or released any Chevron Common Stock or any other Exchange Property in
any manner otherwise than as contemplated by Section 218 hereof, the Exchange
Agent will mail to all Holders of record of the Debentures a notice thereof and
the Repurchase Right arising as a result thereof (a "Repurchase Notice"). To
exercise the Repurchase Right, a Holder of Debentures must deliver on or before
the fifteenth day after the date of the Repurchase Notice irrevocable written
notice to the Exchange Agent of the Holder's exercise of such right, together
with the Debentures with respect to which the right is being exercised, duly
endorsed for transfer.
On the date ("Repurchase Date") that is 30 days after the date of the
Repurchase Notice, the Company will be required to repurchase all Debentures in
respect of which the Repurchase Right has been exercised at the following price:
(i) if the date on which the Company's obtaining or release of Exchange Property
in a manner not contemplated by Section 218 hereof first occurs (the "Triggering
Date") is before July 15, 2000, the product of (a) 120% and (b) the greater of
the principal amount of such Debentures (plus accrued and unpaid interest, if
any, to the Repurchase Date) and the Market Price of the Exchange Property
deliverable in exchange for such Debentures on the Triggering Date (or if such
date is not a Business Day, on the next succeeding Business Day); and (h) if the
Triggering Date occurs on or after July 15, 2000, the greater of (a) the
redemption price specified in Section 103 hereof on the Triggering Date and (b)
the Market Price of the Exchange Property deliverable in exchange for such
Debentures on the Triggering Date (or if such date is not a Business Day, on the
next succeeding Business Day).
19
The obligation of the Company to deliver Exchange Property (or cash in
lieu thereof) in exchange for Debentures shall survive and continue to apply in
full force and effect following and notwithstanding the occurrence of any event
triggering a Repurchase Right. Failure by the Company to exchange Debentures in
accordance with this Third Supplemental Indenture or to repurchase Debentures
upon valid exercise of a Repurchase Right will constitute an Event of Default
with respect to the Debentures pursuant to Section 501(7) of the Indenture, and
Holders of Debentures will have the remedies provided for in the Indenture,
including acceleration of the indebtedness evidenced by the Debentures, in the
event of any such failure.
If an offer is made to repurchase Debentures in connection with a
Repurchase Right, the Company will comply with all tender offer rules, including
but not limited to Sections 13(e) and 14(e) under the Exchange Act and Rules
13e-1 and 14e-1 thereunder, to the extent applicable to such offer.
218. Withdrawals of Exchange Property. The Company shall be entitled,
out of the Exchange Property held by the Exchange Agent, to such kind and
quantity of Exchange Property and such amount of any cash (the investments
contemplated by Section 205 hereof being deemed for these purposes to be cash
and to be valued at their outstanding principal balance) and other Exchange
Property as shall be in excess of the quantity of Exchange Property held by the
Exchange Agent that would be deliverable by the Exchange Agent upon the exchange
of all Debentures then outstanding, and such excess shall be held by the
Exchange Agent for the account of the Company and, upon delivery of the
Officers' Certificate provided for in the following sentence, released to the
Company upon demand. Upon demand of any withdrawal of Exchange Property from the
Exchange Agent, the Company shall deliver to the Trustee an Officers'
Certificate (and a copy thereof to the Exchange Agent) which shall state (i) the
principal amount of Debentures then outstanding and the kind and amount of
Exchange Property required for delivery to the Holders thereof upon exchange,
(ii) that the withdrawal of the kind and amount of Exchange Property referred to
in such demand is permitted by the provisions of this Third Supplemental
Indenture and (iii) that the Exchange Property so to be withdrawn would not be
deliverable upon exchange of all Debentures then outstanding. In delivering such
certificate, the Company may rely on information furnished to it by the Exchange
Agent as to the kind and amount of Exchange Property held by it and the kind and
amount thereof previously delivered to Holders of Debentures.
219. Certain Definitions. All terms used but not defined in this
Third Supplemental Indenture that are defined in the Indenture shall have the
meanings specified in the Indenture unless the context otherwise requires. As
used in this Third Supplemental Indenture, the following terms shall have the
following meanings:
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Common Stock" means the common stock of Chevron of the class
authorized and designated as common stock, par value $3.00 per share, as such
common stock may be changed or reclassified from time to time.
20
"Exchange Act" means the Securities Exchange Act of 1934 and any
successor statute thereto, in each case as amended from time to time.
"Exchange Agent" means Chase Bank of Texas, National Association,
Exchange Agent under the Exchange Agreement, until a successor Exchange Agent
shall have become such pursuant to the provisions of Section 16 of the Exchange
Agreement, and thereafter "Exchange Agent" shall mean such successor Exchange
Agent thereunder and from time to time any subsequent successor pursuant to such
provisions.
"Exchange Agreement" means the Exchange Agent Agreement entered into
pursuant to the provisions of Section 205 hereof, as the same may be
supplemented and amended from time to time.
"Exchange Property" means initially the aggregate of the ____________
shares of Chevron Common Stock delivered to the Exchange Agent by the Company
pursuant to the Exchange Agreement simultaneously with the execution and
delivery of this Third Supplemental Indenture, and thereafter means the
securities, cash and other property, if any, which at the time are deliverable
upon surrender of the Debentures for exchange in accordance with Article Two of
this Third Supplemental Indenture.
"Global Debenture" means a Debenture that evidences all or part of the
Debentures and bears the legend set forth in Section 108 hereof.
"Market Price" means, when used with respect to any security as of any
date, (i) if such security is not then listed or admitted to trading on any
national securities exchange registered under the Exchange Act, the average of
the high bid and low asked prices in the over-the-counter market on such date as
reported by the National Association of Securities Dealers Automated Quotation
System or (ii) if such security is then listed or admitted to trading on any
such national securities exchange, the last reported sales price regular way on
such date or, in case no such reported sale takes place on such date, the
average of the reported closing bid and asked prices regular way on such date,
in each case on the principal national securities exchange on which such
security is then listed or admitted to trading, or (iii) if such prices are not
available on such date, the market value of such security on such date
determined in such manner as shall be satisfactory to the Exchange Agent, which
shall be entitled to rely for such purposes on the advice of any firm of
investment bankers or security dealers having familiarity with such security.
"Market Price" means, when used with respect to any property (other than any
security) as of any date, the market value of such property on such date
determined in such manner as shall be satisfactory to the Exchange Agent, which
shall be entitled to rely for such purposes on the advice of any firm of
investment bankers having familiarity with such property.
21
ARTICLE THREE
301. Acceptance of Trust.
The Trustee accepts the trust hereby created and agrees to perform the
same upon the terms and conditions herein and in the Indenture set forth.
302. Trustee Not Responsible for Validity, Due Execution or Recitals.
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Third Supplemental Indenture
or the due execution thereof by the Company or for or in respect of the recitals
herein contained, all such recitals being made by the Company solely.
303. Counterparts.
This Third Supplemental Indenture may be executed in several
counterparts, each of which shall be an original and all of which together shall
constitute but one and the same instrument.
22
IN WITNESS WHEREOF, PENNZOIL COMPANY, party hereto of the first part,
has caused its corporate name to be hereunto affixed, and this instrument to be
signed and sealed by a Group Vice President, for and on its behalf, in the [City
of New York, New York] and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, party
hereto of the second part, has caused its corporate name to be hereunto affixed,
and this instrument to be signed and sealed by a Vice President, for and on its
behalf, in the [City of New York], all as of the _____ day of _____________,
1998.
PENNZOIL COMPANY
[Corporate Seal] By:
--------------------------------------------
Xxxxx X. Xxxxxxxx, XX
Group Vice President - Finance and Accounting
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
As Trustee
[Corporate Seal] By:
--------------------------------------------
[Name]
[Title]
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Xxxxx X. Xxxxxxxx, XX, Group Vice President of Pennzoil
Company, known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
therein expressed, in the capacity therein set forth and as the act and deed of
said association.
GIVEN UNDER MY HAND AND SEAL of office, this the _____ day of
_____________, 1998.
--------------------------------------------
[NOTARIAL SEAL] Notary Public
23
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared _____________ of Chase Bank of Texas, National Association,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
therein expressed, in the capacity therein set forth and as the act and deed of
said association.
GIVEN UNDER MY HAND AND SEAL of office, this the _____ day of
_____________, 1998.
[NOTARIAL SEAL]
--------------------------------------------
Notary Public
24
================================================================================
PENNZOIL COMPANY
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
As Trustee
Fourth Supplemental Indenture
Providing for
_____% Exchangeable Senior Debentures Due July 15, 2008
Dated as of _______________, 1998
Supplementing Indenture dated as of December 15, 1992
================================================================================
FOURTH SUPPLEMENTAL INDENTURE, dated as of _______________, 1998
("Fourth Supplemental Indenture") between PENNZOIL COMPANY, a corporation
organized and existing under the laws of the State of Delaware (hereinafter
called the "Company"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national
banking association, incorporated and existing under the laws of the United
States of America (formerly known as Texas Commerce Bank National Association),
having its principal corporate trust office in the City of Houston, Texas
(hereinafter called the "Trustee").
WHEREAS, the Company has executed and delivered its Indenture dated as
of December 15, 1992 (hereinafter called the "Indenture"), to provide for the
issue of one or more series of debt securities of the Company; and
WHEREAS, Section 901 of the Indenture authorizes the Company and the
Trustee to enter into supplemental indentures to establish the form or terms of
securities of any series as permitted by sections 201 and 301 of the Indenture;
and
WHEREAS, to so provide for the establishment of such a series, the
Company has authorized the execution of this Fourth Supplemental Indenture to
the Indenture and has requested the Trustee to execute the Fourth Supplemental
Indenture; and
WHEREAS, all conditions and requirements necessary to make this Fourth
Supplemental Indenture a valid, binding and legal instrument have been done and
performed and the execution and delivery hereof have been in all respects duly
authorized, including the delivery to the Trustee of the Opinion of Counsel
referenced in Section 903 of the Indenture;
NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH that the
Company and the Trustee hereby covenant, declare and agree as follows:
ARTICLE ONE
101. Third Series of Debentures.
There shall be a series of Securities (capitalized terms used herein
and not otherwise defined have the meanings given to such terms in the
Indenture) designated "____% Exchangeable Senior Debentures Due July 15, 2008"
(herein sometimes referred to as "Debentures"), and the form thereof, which
shall be established by Board Resolution, shall contain suitable provisions with
respect to the matters hereinafter in this Section 101 specified. Debentures
shall mature on and bear interest and be limited in aggregate principal amount
as to each maturity as set forth below:
Aggregate Interest
Principal Rate
Amount Maturity Per Annum
--------- ------------- ----------
$___________ July 15, 2008 ____%
Debentures shall be issued as Registered Debentures in denominations of U.S.
$1,000 or integral multiples thereof; interest on Debentures shall be payable
semiannually on July 15 and January 15 of each year, commencing January 15,
1999. The Place of Payment with respect to the Debentures is
______________________________, 00 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and Chase Bank of Texas, National Association, 000 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxx, Xxxxx 00000.
102. Exchange or Transfer.
Upon any exchange or transfer of Debentures, the Company may make a
charge therefor sufficient to reimburse it for any tax or taxes or other
governmental charge, as provided in Section 305 of the Indenture, but the
Company hereby waives any right to make a charge in addition thereto for any
exchange or transfer of Debentures.
103. Redemption.
(a) The Debentures shall be subject to redemption upon not less than
30 nor more than 60 days' prior notice as provided in Sections 107 and 1104 of
the Indenture at any time on or after July 15, 2000, in whole or from time to
time in part, at the option of the Company, at the following redemption prices
(expressed as a percentage of the principal amount at maturity) if redeemed
during the 12-month period beginning July 15 of the following years:
Redemption
Year Price
---- -----
2000
2001
2002
2003
2004
2005
2006
2007
in each case together with accrued interest to the redemption date, provided,
however, that, if any interest payment date on the Debentures is on or prior to
the Redemption Date, such interest shall be payable to the Holders of such
Debentures, registered as such, at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of Section 307 of the
Indenture.
(b) Notice of intention to redeem the Debentures in whole or in part
shall be given in accordance with Section 1104 of the Indenture.
104. Sinking Fund.
3
The Debentures shall not be entitled to the benefits of any sinking
fund provisions.
105. Tax Matters.
(a) Subject to Section 105(c) hereof, in addition to the conditions
set forth in Section 401 of the Indenture, the right of the Company to satisfy
the Indenture to the extent set forth in Section 401 of the Indenture shall be
subject to the condition that the Company has delivered to the Trustee an
Opinion of Counsel (as defined in the Indenture) that the satisfaction and
discharge pursuant to Section 401 of the Indenture will not cause the Holders of
the Debentures to recognize income, gain or loss for United States federal
income tax purposes.
(b) Subject to Section 105(c) hereof, in addition to the conditions
set forth in Section 403 of the Indenture, the right of the Company to satisfy
the Indenture with respect to the Debentures to the extent set forth in Section
403 of the Indenture shall be subject to the conditions that the Company shall
have received from, or there shall have been published by, the United States
Internal Revenue Service a ruling to the effect that the satisfaction and
discharge to the extent set forth in Section 403 of the Indenture will not cause
the Holders of the Debentures to recognize income, gain or loss for United
States federal income tax purposes.
(c) Notwithstanding the satisfaction and discharge of the Indenture or
with respect to the Debentures pursuant to Sections 105(a) and (b) hereof, the
obligations of the Company under Article Two hereof shall survive until the
Debentures are no longer Outstanding.
106. Issuance of Debentures.
Upon the delivery of this Fourth Supplemental Indenture, Debentures in
the aggregate principal amount of $_________ shall be issued and be Outstanding
as provided in the Indenture.
107. Global Debentures.
The provisions of paragraphs (a), (b), (c) and (d) below shall apply
only to Global Debentures:
(a) Each Global Debenture authenticated under the Indenture and this
Fourth Supplemental Indenture shall be registered in the name of the Depository
designated for such Global Debenture or a nominee thereof and delivered to such
Depository or a nominee thereof or custodian therefor, and each such Global
Debenture shall constitute a single Debenture for all purposes of this Fourth
Supplemental Indenture.
(b) Notwithstanding any other provision in the Indenture or this
Fourth Supplemental Indenture, no Global Debenture may be exchanged in whole or
in part for Debentures registered, and no transfer of a Global Debenture in
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Debenture or a nominee thereof unless (A) such
Depositary (i) has notified the Company that it is unwilling or unable to
continue as
4
Depositary for such Global Debenture and the Company thereupon fails to appoint
a successor depositary or (ii) has ceased to be a clearing agency registered
under the Exchange Act, (B) there shall have occurred and be continuing an Event
of Default or any event which after notice or lapse of time or both would be an
Event of Default with respect to the Debentures or (C) the Company in its sole
discretion determines that such Global Debenture shall be so exchangeable or
transferable.
(c) Subject to Section 107(b), upon issuance of Debentures in
definitive registered certificated form, the Trustee shall register the
Debentures in the name of, and cause the Debentures to be delivered to, the
Person or Persons (or the nominee thereof) identified as the beneficial owners
as the Depositary shall direct.
(d) Every Debenture authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Debenture or any portion
thereof, whether pursuant to this Section, Section 304 or 306 of the Indenture
or otherwise, shall be authenticated and delivered in the form of, and shall be,
a Global Debenture, unless such Debenture is registered in the name of a Person
other than the Depositary for such Global Debenture or a nominee thereof.
108. Form of Legend for Global Debentures.
Every Global Debenture authenticated and delivered hereunder shall
bear a legend in substantially the following form:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO PENNZOIL COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS
CERTIFICATE OR ANY PORTION HEREOF IS REGISTERED IN THE NAME OF CEDE & CO. (OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR A
NOMINEE THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THIS DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE FOURTH
SUPPLEMENTAL INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
A DEPOSITARY OR A NOMINEE THEREOF. THIS DEBENTURE MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A DEBENTURE REGISTERED, AND NO TRANSFER OF THIS DEBENTURE IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE FOURTH SUPPLEMENTAL INDENTURE.
109. Debenture authenticated under the Indenture and this Fourth
Supplemental Indenture shall be The Depository
5
Trust Company or such other clearing agency registered under the Exchange Act
that is designated by the Company to act as Depositary with respect to
Debentures issued in the form of one or more Global Debentures.
ARTICLE TWO
201. Right of Exchange.
Subject to and upon compliance with the provisions of this Section
201, at the option of the Holder thereof, beginning _______________, 1998, any
Debenture or any portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000, may (unless the Company shall have elected,
pursuant to Section 216 hereof, to pay to the Holder an amount in cash equal to
the value of the Exchange Property, in which case the provisions of Section 216
hereof shall be followed), at any time on or before the close of business on
July 15, 2008, or in the case of Debentures or portions thereof called for
redemption in accordance with Section 1101 of the Indenture, on or before the
close of business on the Business Day next preceding the Redemption Date, be
exchanged for fully paid and nonassessable shares (calculated as to each
exchange to the nearest 1/10,000 of a share) of Chevron Common Stock (as defined
in Section 219 hereof) (or such other securities, property or cash as shall be
added to such Chevron Common Stock or as such Chevron Common Stock shall have
been changed into pursuant to this Article Two) at the Exchange Rate (as defined
below) hereinafter provided.
The rate at which shares of Chevron Common Stock shall be deliverable
upon exchange (herein called the "Exchange Rate") shall be initially 0.823
shares of Chevron Common Stock for each $1,000 principal amount of Debentures
exchanged. The Exchange Rate shall be subject to adjustment as provided in
Sections 204, 205, 211 and 215 hereof.
202. Method of Exchange.
In order to exercise the right of exchange, the Holder shall surrender
such Debenture to the Exchange Agent (as defined in Section 219 hereof) for
exchange by delivering such Debenture to, or mailing such Debenture by
registered mail, postage prepaid, addressed to the Exchange Agent at the office
or agency of the Company, maintained for that purpose pursuant to Section 1002
of the Indenture, accompanied in each case by written notice to the Company and
the Exchange Agent that the Holder elects to exchange such Debenture, or, if
less than the entire principal amount of such Debenture is to be exchanged, the
portion thereof to be exchanged.
The notices in the above paragraph shall also state the name or names
(with address) in which the certificate or certificates for shares of Chevron
Common Stock or, to the extent applicable, other Exchange Property which shall
be issuable on such exchange shall be issued. Debentures surrendered for
exchange shall be accompanied (if so required by the Company or the Exchange
Agent) by proper assignments thereof to the Company.
6
If the Company does not elect to deliver cash in lieu of Chevron
Common Stock or other Exchange Property pursuant to Section 216 hereof, as
promptly as practicable after the proper surrender of such Debenture for
exchange as aforesaid (subject however to the following paragraph of this
Section 202 and Section 216 hereof) and in accordance with the procedures set
forth in the Exchange Agreement (as defined in Section 219 hereof), the Company
shall or shall cause the Exchange Agent to deliver to such Holder, or on his
written order a certificate or certificates for the number of whole shares of
Chevron Common Stock and/or any other Exchange Property deliverable upon
exchange of such Debenture (or specified portion thereof). In addition,
provision shall be made for any fraction of a share as provided in Section 203
hereof and any payment of interest as provided by the following paragraph. Such
exchange shall be deemed to have been effected immediately prior to the close of
business on the date on which such Debenture shall have been properly
surrendered for exchange as aforesaid, which shall be the date on which such
Debenture and notice and any such required payment and assignment shall be
received by the Exchange Agent, and at such time the rights of the Holder of
such Debenture as a Debenture holder shall cease and the Person or Persons in
whose name or names any certificate or certificates for shares of Chevron Common
Stock or other Exchange Property shall be deliverable upon such exchange shall,
as between such Person or Persons and the Company, be deemed to have become the
Holder or Holders of record of the shares or other property represented thereby.
Upon any exchange of a Debenture pursuant to this Article Two (i) if
the Debenture to be exchanged has been called for redemption by the Company, the
Holder shall receive accrued interest thereon through the date an exchange under
this Section 202 is deemed effective and (ii) if the Debenture to be exchanged
has not been called for redemption by the Company, the Holder shall not receive
any payment of accrued and unpaid interest.
Delivery of such certificate or certificates and of any check for any
cash or other Exchange Property may be delayed for a reasonable period of time
at the request of the Company in order to effectuate the calculations of the
adjustments pursuant to this Article Two, to obtain any certificate representing
securities to be delivered, to complete any reapportionment of the shares of
Chevron Common Stock or other Exchange Property apportioned thereto which is
required by this Article Two or to comply with any applicable law. If, between
the date an exchange under this Section 202 is deemed effected and the date of
delivery of the applicable security or securities, such security or securities
shall cease to have any or certain rights, or a record date or effective date of
a transaction to which Section 204, 205 or 211 hereof applies shall occur, the
Person entitled to receive such security or securities shall be entitled only to
receive such security or securities as so modified and any dividends or proceeds
received thereon on or after the date such exchange is deemed effected and none
of the Company, the Trustee and the Exchange Agent shall be otherwise liable
with respect to the modification of such security or securities, from the date
such exchange is deemed effected and the date of such delivery.
Except as otherwise expressly provided in this Article Two, no payment
or adjustment shall be made upon any exchange on account of any interest accrued
on the Debentures surrendered for exchange or on account of any dividends on the
Chevron Common Stock or other Exchange Property delivered upon such exchange;
provided, however that interest accrued on any
7
Debentures surrendered for exchange on or after any Regular Record Date and
before any Interest Payment Date relating thereto shall be paid to, as
applicable, the Holder of record as of such record date.
In the case of any Debenture which is exchanged in part only, upon
such exchange the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a Debenture or
Debentures of authorized denominations in principal amount equal to the
unexchanged portion of such Debenture.
203. Fractional Interests.
No fractional shares of Chevron Common Stock (or any form of
fractional interest in any other security or property which is part of the
Exchange Property) shall be delivered upon exchanges of Debentures. If more
than one Debenture shall be surrendered for exchange at one time by the same
Holder, the number of whole shares (or other integral units of such other
securities or property), which shall be delivered upon exchange shall be
computed by the Company on the basis of the aggregate principal amount of the
Debentures (or specified portions thereof to the extent permitted hereby) so
surrendered. Instead of any fractional share (or other fractional unit) which
would otherwise be deliverable upon exchange of any Debenture or Debentures (or
specified portions thereof), the Exchange Agent on behalf of the Company shall
pay, on the date the exchange is deemed to be effected, a cash adjustment in
respect of such fractional interest in an amount equal to the same fraction of
the Market Price (as defined in Section 219 hereof) per share of the Chevron
Common Stock (or per unit of such other security or property) on the Business
Day next preceding the date the exchange is deemed to be effected. The Company
shall authorize the Exchange Agent to obtain the funds necessary or anticipated
by the Exchange Agent to be necessary, for payment of such fractional interests
by the sale of shares of Chevron Common Stock (or other securities or property
which are part of the Exchange Property) held by the Exchange Agent, provided
that after such sale the number of shares of Chevron Common Stock (and of such
other securities or property) held by the Exchange Agent shall be sufficient to
permit the exchange of all Outstanding Debentures for Chevron Common Stock (and
any other Exchange Property), on the basis of the Exchange Rate then in effect,
in accordance with the provisions of this Article Two. The Company agrees to
furnish or cause to be furnished to the Exchange Agent any additional funds
required to permit such cash payments with respect to fractional interests.
204. Adjustment of Exchange Rate.
(a) In the event Chevron (as defined in Section 219 hereof) shall (i)
pay a dividend on Chevron Common Stock in shares of Chevron Common Stock, (ii)
subdivide the outstanding shares of Chevron Common Stock into a greater number
of shares of Chevron Common Stock, (iii) combine outstanding shares of Chevron
Common Stock into a smaller number of shares of Chevron Common Stock, or (iv)
issue, by reclassification of shares of Chevron Common Stock, any shares of its
common stock (which in any such case shall apply to the shares of Chevron Common
Stock held by the Exchange Agent under the Exchange Agreement), the Exchange
Rate in effect immediately prior thereto shall be proportionately adjusted so
that the Holder of any
8
Debentures thereafter surrendered for exchange shall be entitled (subject to
Sections 215 and 216 hereof) to receive the number and kind of shares of Chevron
Common Stock which such Holder would have owned or have been entitled to receive
after the happening of any of the events described above, had such Debentures
been exchanged immediately prior to the record date (or if there is no record
date, the effective date) of such event. Such adjustments shall be made
whenever any of the events listed above shall occur and shall become effective
as of immediately after the close of business on the record date in the case of
a stock dividend and shall become effective as of immediately after the close of
business on the effective date in the case of a subdivision or combination or
reclassification. Any Holder surrendering any Debentures for exchange after
such record date or such effective date, as the case may be, shall be entitled
to receive shares of Chevron Common Stock at the Exchange Rate as so adjusted
pursuant to this Section 204(a) (subject to Sections 215 and 216 hereof) and any
other Exchange Property apportioned thereto.
(b) Notwithstanding the foregoing provisions, no adjustment in the
Exchange Rate shall be required unless such adjustment would require an increase
or decrease in such Exchange Rate of more than 1%, provided, however, that any
adjustments which by reason of this paragraph (b) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
(c) All calculations under this Section 204 shall be made to the
nearest 1/10,000 of a share.
(d) Whenever the Exchange Rate is adjusted as herein provided, the
Company shall determine the adjusted Exchange Rate in accordance with this
Section 204 and shall prepare an Officer's Certificate setting forth such
adjusted Exchange Rate and any cash or other property apportioned to the Chevron
Common Stock and showing in detail the facts upon which such adjustment is
based. Such certificate shall be conclusive evidence of the correctness of such
adjustment. Such certificate shall forthwith be filed with the Exchange Agent
and the Trustee, who may rely on such Officer's Certificate as conclusive
evidence of the correctness of the adjustment. A notice stating that the
Exchange Rate has been adjusted and setting forth the adjusted Exchange Rate and
any cash or other property apportioned to the Chevron Common Stock shall, as
soon as practicable, be mailed by or on behalf of the Company to the Holders of
Debentures at their last addresses as they shall appear upon the Security
Register.
205. Exchange Agreement.
(a) Simultaneously with the execution and delivery of this Indenture
Supplement, the Company is entering into the Exchange Agreement with Chase Bank
of Texas, National Association, a national banking association, incorporated and
existing under the laws of the United States of America, as Exchange Agent,
pursuant to which the Company is depositing with the Exchange Agent __________
shares of Chevron Common Stock, which in the aggregate shall initially
constitute the Exchange Property. The Exchange Agent shall be the exchange
agent for the exchange of Debentures for Chevron Common Stock and other Exchange
Property, if any, hereunder. The Company shall deposit with the Exchange Agent
from time to time such additional
9
number of shares of Chevron Common Stock not already held by the Exchange Agent
as the Holders of all Outstanding Debentures shall from time to time be
entitled to receive from the Exchange Agent pursuant to this Article Two upon
exchange thereof.
(b) All cash received by the Exchange Agent as herein provided will be
invested upon written request of the Company by the Exchange Agent from time to
time as so requested by the Company pursuant to the Exchange Agreement. The
Company shall be entitled to all cash dividends paid on the Exchange Property
held by the Exchange Agent except to the extent that such dividends are paid
pursuant to a plan of liquidation or partial liquidation or a recapitalization
or restructuring or other extraordinary cash dividends, and to all interest
payments on any debt securities included in the Exchange Property which Holders
of Debentures may be entitled to receive on exchange hereunder; provided, that
if the Exchange Agent shall receive any such cash dividends or interest to which
the Company is entitled pursuant hereto, the Exchange Agent shall not be
required to transfer to the Company any such dividends or interest to which the
Company is entitled pursuant hereto until receipt of an Officers' Certificate to
the effect that the Company is entitled to such dividends or interest pursuant
hereto. The Company shall also be entitled to any interest or gain on
investments made by the Exchange Agent pursuant to Section 11 of the Exchange
Agreement, which shall be paid to the Company on demand as provided in the
Exchange Agreement. Any loss on such investments shall be for the account of
the Company and the amount thereof shall be reimbursed to the Exchange Agent by
the Company. The Exchange Agent shall hold and apply as hereinafter provided
all other dividends paid on the Exchange Property held by the Exchange Agent
under the Exchange Agreement.
(c) In case there shall be, at any time while any Debentures are
Outstanding, any distribution of cash, securities or other property on Exchange
Property (other than (i) cash dividends to which the Company is entitled and
interest paid on debt securities, as specified in paragraph (b) of this Section
205, (ii) dividends, subdivisions, combinations and reclassifications for which
an adjustment in the Exchange Rate is made pursuant to Section 204 hereof and
(iii) securities or other property received in a transaction to which Section
211 hereof applies) or in case there shall be granted with respect to any
Exchange Property, any transferable subscription rights, options, warrants or
other similar transferable rights, the Company shall, as soon as reasonably
practicable after its receipt thereof, notify the Exchange Agent of such receipt
and promptly, and in any event within five business days of the receipt thereof,
deposit with the Exchange Agent all such securities and other property,
including any transferable rights, pursuant to the Exchange Agreement, and
concurrently with such deposit, shall (except as provided in the succeeding
paragraph) instruct the Exchange Agent to sell all securities and other property
so received by way of distribution and all rights for cash so distributed in
such manner as the Company shall instruct in writing and shall apply the
proceeds from the sale thereof as hereinafter provided. To the extent that the
Company shall, within 10 days of its notification to the Exchange Agent of the
Company's receipt of such cash, securities or other property, including any
transferrable rights, furnish the Exchange Agent with an Opinion of Counsel to
the effect that such distribution or grant or the sale of the securities or
other property received on such distribution or the rights received by such
grant is taxable to the Company or the Exchange Agent and an Officers'
Certificate as to the amount of federal, state and local tax payable by the
Company and the Exchange Agent as a result of such distribution or grant and
10
estimated to be payable as a result of such sale (computed by the Company at the
highest marginal tax rates applicable to such transaction or transactions), the
Exchange Agent shall pay to, or to the order of the Company, in the case of
taxes payable by the Company, or itself, in the case of taxes payable by it,
from the cash received in such distribution, if any, or cash apportioned to
Chevron Common Stock hereunder or from the net cash proceeds received from such
sale, the amount of such tax as so computed by the Company. In the case of
taxes estimated to be payable as a result of such sale, the Company shall
deliver an Officers' Certificate within 10 days after completion of such sale
stating the actual taxes payable as so computed and appropriate adjustment of
such payments shall thereupon be made. The remaining portion of such cash
received, if any, and net cash proceeds shall be apportioned equally among the
Exchange Property for which outstanding Debentures are exchangeable as of
immediately after the close of business on the record date for. the distribution
or grant to which this paragraph (c) applies, or, if there is no such record
date, the effective date of such distribution or grant. Any Holder surrendering
any Debentures after such record date, or such effective date, as the case may
be, shall be entitled to receive, in addition to the Exchange Property for which
such Debentures are exchangeable and any cash theretofore apportioned hereunder,
the amount of cash so apportioned to such shares of Chevron Common Stock.
Notwithstanding the foregoing, however, in the event of any such
distribution of securities or other property, including transferable rights,
which is convertible, without payment of consideration, into Exchange Property,
and which right of conversion does not expire before the retirement of such
securities or other property, the Company shall, after any sale required for
payment of any taxes owed by the Company, or the Exchange Agent, as provided in
the preceding paragraph, instruct the Exchange Agent to retain and hold all such
securities and other property as additional Exchange Property for apportionment
equally among other Exchange Property for which Debentures are exchangeable as
of immediately after the close of business on the record date for the
distribution or grant to which this Section 205 applies, or, if there is no such
record date, the effective date of such distribution or grant; provided,
however, that if the amount of cash deliverable to the holders of such
securities or other property, including transferable rights, for each unit of
such securities or other property upon the retirement thereof is less than the
average of the high and low reported public sales prices for each such unit for
the seven Business Days preceding the date 15 Business Days prior to the date of
their retirement the Exchange Agent shall sell all such securities and other
property prior to the third Business Day prior to the date of their retirement
and, after the payment, from the net proceeds received from such sale by the
Exchange Agent, of any taxes incurred by the Exchange Agent or the Company in
connection with such sale, the remaining cash proceeds of such sale shall be
apportioned equally among the Exchange Property for which Outstanding
Debentures are exchangeable as of the Business Day following the day such sale
is concluded.
In the event that a distribution or grant of cash, securities or other
property on Exchange Property shall be effected as contemplated by the two
immediately preceding paragraphs, a notice stating that such distribution or
grant has occurred and setting forth the additional cash, securities or other
property on the Exchange Property shall as soon as practicable be mailed by or
on behalf of the Company to the Holders of Debentures at their last addresses as
they appear upon the Security Register.
11
In case there shall be, at any time while any Debentures are
outstanding, any distribution or grant to holders of Chevron Common Stock (or
other Exchange Property), including the Company (with respect to any Exchange
Property held by the Exchange Agent), of any nontransferable subscription
rights, options, warrants or other similar nontransferable rights that shall, by
the terms of such rights, permit the Company to distribute such rights to the
Holders of Debentures, then the Company and the Exchange Agent shall cause such
rights to be distributed to the Holders of record of Debentures shown on the
Security Register as of immediately after the close of business on the record
date (and if there is no record date, the close of business on the effective
date) for such distribution or grant; provided, however, that if the Company
shall furnish the Exchange Agent with an Opinion of Counsel to the effect that
such distribution or grant, or such distribution by the Company or the Exchange
Agent to Holders of Debentures, is taxable to the Company or the Exchange Agent
and an Officer's Certificate as to the amount of federal, state and local tax
payable by the Company and the Exchange Agent as a result of such distribution
or grant, the Exchange Agent shall to the extent legally permissible sell for
cash in such manner as the Company shall instruct in writing such of the rights
as shall be sufficient to provide to the Company and the Exchange Agent a cash
payment equal to the amount of taxes payable by the Company and the Exchange
Agent, respectively, arising from such distribution or grant (as computed by the
Company at the highest marginal tax rates applicable to such transaction or
transactions and any sale of such rights or, if such sale is not permissible or
the proceeds thereof are not sufficient, the Exchange Agent shall cause an
amount of cash held for exchange by the Exchange Agent (if any) and, if such
cash is not sufficient for the applicable tax payments, an amount of Exchange
Property, to be segregated for the benefit of or delivered to the Company. The
remaining Exchange Property held by the Exchange Agent shall be proportionately
adjusted so as to be apportioned equally to the Debentures outstanding as of
immediately after the close of business on the record date for the distribution
or grant to which this paragraph applies, or, if there is no such record date,
immediately after the close of business on the effective date of such
distribution or grant. Any Holder surrendering any Debentures after such record
date, or such effective date, as the case may be, shall be entitled to receive
any Exchange Property apportioned thereto as so adjusted pursuant to this
paragraph.
(d) In the event of any reduction of the principal amount of
Debentures Outstanding (other than as a result of surrender for exchange for
Exchange Property pursuant to this Article Two), as evidenced by the delivery to
the Trustee by the Company of Debentures for cancellation, the Company shall be
entitled to the kind and amount of Exchange Property as shall at the time be in
excess of the kind and amount of Exchange Property which would be required for
the exchange of all Debentures then Outstanding for the Exchange Property on the
basis of the then Exchange Rate and the other terms and provisions of this
Article Two and the Exchange Agreement. Upon expiration of the right to
surrender Debentures for exchange pursuant to this Article Two and the Exchange
Agreement and when all other obligations of the Company shall have been
satisfied under this Article Two and the Exchange Agreement, the Company's
obligation to exchange Debentures for Exchange Property shall be terminated.
(e) The Exchange Agent shall not make any distribution of Exchange
Property to the Company prior to the receipt by the Exchange Agent from the
Company of an Officers'
12
Certificate to the effect that no Event of Default exists hereunder and no event
or condition which with notice or lapse of time or both would become such an
Event of Default and which states in detail the basis asserted by the Company
for such distribution.
(f) The Company shall be entitled to any net income or gain resulting
from investments of cash made by the Exchange Agent pursuant to the Exchange
Agreement and shall reimburse the Exchange Agent for any losses realized in
respect of such investments.
(g) The Company shall have the full and unqualified right and power to
exercise any rights to vote, or to give consents or take any other action in
respect of, the Chevron Common Stock or any other securities included in the
Exchange Property at any time held by the Exchange Agent, and the Exchange Agent
shall have no duty to exercise any such rights. The Company shall not be liable
to any Holder as a result of any vote, or failure to vote, consent or failure to
consent, or any other act or failure to act taken by the Company in respect of
the Chevron Common Stock or any other securities included in the Exchange
Property.
(h) The obligations, covenants and agreements contained in the
Exchange Agreement shall not constitute obligations, covenants or agreements
contained in the Indenture, this Fourth Supplemental Indenture or any of the
Debentures and neither the failure by the Company to observe any obligation,
covenant or agreement contained in the Exchange Agreement (unless such
obligation, covenant or agreement shall also be contained in this Fourth
Supplemental Indenture) nor the failure of the Exchange Agent to fulfill any
obligations, agreements or covenants set forth therein shall constitute (with or
without the giving of notice, the passage of time or both) an Event of Default;
provided, however, that nothing in this paragraph shall impair the right of a
Holder to receive the Exchange Property apportioned to such Holder's Debentures
in exchange for such Debentures in accordance with the terms and conditions of
this Article Two, and nothing in this paragraph shall impair the rights and
remedies of the Trustee and the Holders under Article Five of the Indenture with
respect to a failure by the Company to observe its express agreements and
covenants to cause the exchange of Debentures actually surrendered for exchange
pursuant to this Article Two for Exchange Property apportioned thereto in
accordance with the terms and conditions of this Article Two.
206. Company to Give Notice of Certain Events.
If at any time:
(a) Chevron shall declare a dividend (or any other distribution) on
the Chevron Common Stock which the Exchange Agent would be required to apply for
the benefit of the Holders of the Debentures in accordance with Section 205
hereof; or
(b) Chevron shall authorize the granting of subscription rights,
options, warrants or other similar rights to holders of Chevron Common Stock; or
13
(c) there shall occur any reclassification of Chevron Common Stock
(other than a subdivision or combination of outstanding shares of Chevron Common
Stock) or any consolidation or merger to which Chevron is a party and for which
approval of any stockholders of Chevron is required, or the sale or transfer of
all or substantially all of the assets of Chevron; or
(d) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of Chevron;
then the Company shall as promptly as practicable cause to be filed at the
office or agency maintained pursuant to Section 1002 of the Indenture and cause
to be mailed to the Holders of Debentures at their last addresses as they shall
appear upon the Security Register a notice stating (x) the date, if known by the
Company, on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights, or, if a record is not to be taken, the date as
of which the holders of Chevron Common Stock of record to be entitled to such
dividend or distribution or grant of rights are to be determined, or (y) the
date, if known by the Company, on which such reclassification, merger,
consolidation, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Chevron Common Stock of record shall be entitled to exchange their
shares of Chevron Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
207. Covenants by the Company.
So long as any Debentures shall be Outstanding and exchangeable for
Chevron Common Stock or other Exchange Property pursuant to this Article Two,
the Company shall (i) preserve unimpaired the right of each Holder of
Debentures, upon exchange thereof, to receive shares of Chevron Common Stock or
other Exchange Property as such Holder shall from time to time be entitled to
receive in accordance with the provisions of this Article Two, and (ii) not
pledge, mortgage, hypothecate or grant a security interest in, or permit any
mortgage, pledge, security interest or other lien upon, the Exchange Property.
208. Transfer Taxes.
The Company will pay any and all taxes that may be payable in respect
of the transfer and delivery of shares of Chevron Common Stock (or other
securities included in the Exchange Property) pursuant hereto, other than
income, capital gains and similar taxes imposed on any Holder by reason of
exchange of Debentures for Exchange Property; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the delivery, upon an exchange of Debentures, of shares
of Chevron Common Stock (or other securities included in the Exchange Property)
in a name other than that in which the Debentures so exchanged were registered,
and no such transfer shall be made unless and until the Person requesting such
transfer has paid to the Company or the Exchange Agent the amount of any such
tax, or has established to the satisfaction of the Company and the Exchange
Agent that such tax has been paid.
14
209. Fully Paid Shares.
The Company warrants and covenants that all shares of Chevron Common
Stock delivered upon the exchange of Debentures will be fully paid and
nonassessable and that each Holder of Debentures who receives shares of Chevron
Common Stock or other Exchange Property in exchange for his Debentures pursuant
to this Article Two will receive valid and marketable title to such Exchange
Property, free and clear of all claims, liens and encumbrances (other than those
that may be created or suffered to exist by such Holder). Except as provided in
Section 208 hereof, the Company will pay all taxes, liens and charges with
respect to the delivery of Exchange Property in exchange for Debentures
hereunder.
210. Cancellation of Debentures.
All Debentures delivered for exchange shall be delivered by the
Exchange Agent to the Trustee and be canceled by the Trustee, and the Trustee
shall dispose of the same as provided in Section 309 of the Indenture.
211. Merger of Chevron
In case of any consolidation or merger of Chevron with or into any
other Person that results in shares of Chevron Common Stock, as constituted
prior to the consummation of such transaction, being converted into other
securities and/or property (including cash), or in case of any sale or transfer
of all or substantially all of the assets of Chevron (if in connection with such
sale or transfer holders of Chevron Common Stock receive other securities and/or
property including cash, in exchange for their shares of Chevron Common Stock),
or of any voluntary or involuntary dissolution, liquidation or winding-up of
Chevron, the Company shall execute and deliver to the Trustee a supplemental
indenture, and to the Exchange Agent a supplement to the Exchange Agreement,
each providing that the Holder of each Debenture then Outstanding shall have the
right thereafter (subject to Sections 215 and 216 hereof) to exchange such
Debenture (i) for the kind and amount of securities and other property
receivable upon such consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up by a holder of the number of shares of Chevron Common
Stock for which such Debenture was exchangeable immediately prior to such
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
and (ii) the kind and amount of securities (other than Chevron Common Stock) and
other Exchange Property for which such Debenture was exchangeable immediately
prior to such consolidation, merger, sale, transfer, dissolution, liquidation or
winding up. Such supplemental indenture shall provide for adjustments and
rights to receive and retain dividends or their equivalents, which shall be as
nearly equivalent as may be practicable to the adjustments and rights to receive
and retain dividends or their equivalents provided for in this Article Two. The
above provisions of this Section 211 shall similarly apply to any successive
consolidation, merger, sale, transfers, dissolution, liquidation or winding-up.
Notice of such supplemental indenture shall as soon as practicable be
filed with the Exchange Agent and mailed by or on behalf of the Company to the
Holders of Debentures at their last addresses as they shall appear on the
Security Register.
15
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property or cash receivable by the Debenture holders upon the exchange of their
Debentures as herein provided after any such consolidation, merger, sale,
transfer, dissolution, liquidation or winding up or to any adjustment to be made
with respect thereto.
212. Certain Tender or Exchange Offers for Exchange Property.
In the event of a tender offer or exchange offer for any class of
securities included within the Exchange Property (i) if the Company owns shares
of such class which are not subject to the Exchange Agreement, the Company will
cause the Exchange Agent to tender such shares of such class in the same
proportion that the Company tenders its securities in such class which are not
subject to the Exchange Agreement, and (ii) if the Company does not own
securities of a class which are subject to the Exchange Agreement, the Company
may, at its option and in its sole discretion, elect to cause the Exchange Agent
to tender all or any portion or none of such class of security included within
the Exchange Property held by the Exchange Agent. The proceeds of the sale of
any such Exchange Property pursuant to any such tender or exchange offer will be
held by the Exchange Agent for the benefit of Holders as provided in this Fourth
Supplemental Indenture.
213. Obligations of Trustee and Exchange Agent.
Subject to the provisions of Section 601 of the Indenture, neither the
Trustee nor the Exchange Agent shall at any time be under any duty or
responsibility to any Holder of Debentures to determine whether any facts exist
which may require any adjustment of the Exchange Rate, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor the Exchange Agent shall be accountable
with respect to the validity or value (or the kind or amount) of any Exchange
Property which may at any time be issued or delivered upon the exchange of any
Debenture or the market conditions existing at the time of sale of any Exchange
Property; and neither the Trustee nor the Exchange Agent makes any
representation with respect thereto. Neither the Trustee nor the Exchange Agent
shall be responsible, for any failure of the Company to transfer or deliver any
Exchange Property or certificates or other evidence thereof to the Exchange
Agent as provided herein, or subject to the provisions of Section 601 of the
Indenture and the obligations assumed under the Exchange Agreement, to comply
with any of the covenants of the Company contained in this Article Two.
214. Exchange Arrangements in Case of Redemption.
In connection with any redemption of Debentures, the Company may
arrange for the purchase and exchange of Exchange Property of all or any part of
such Debentures by an arrangement with one or more investment bankers or other
purchasers to purchase such Debentures by paying to the Holders thereof, or to
the Trustee in trust for such Holders, on or before the close of business on the
Business Day next preceding the Redemption Date, an amount not less than the
applicable Redemption Price of the Debentures to be purchased, plus interest
accrued to the
16
Redemption Date. Notwithstanding anything to the contrary contained in Article
Eleven of the Indenture, the obligation of the Company to pay the Redemption
Price of such Debentures, plus interest accrued to the Redemption Date, shall be
satisfied and discharged to the extent such amount is so paid by such
purchasers. Any Debentures to be purchased pursuant to such agreement which are
not presented for redemption or not duly surrendered for exchange by the Holders
thereof shall be deemed acquired by such purchasers from the Holders and
surrendered by such purchasers for exchange, all as of immediately prior to the
close of business on the Business Day next preceding the Redemption Date,
subject to payment of the above amount as aforesaid. Notwithstanding anything
to the contrary contained in this Article Two, in the event that any Debentures
subject to such agreement are surrendered for exchange (other than by the
purchasers) by the close of business on the Business Day next preceding the
Redemption Date, the amounts so paid to the Trustee in trust for the Holders of
the Debentures so surrendered for exchange shall be returned to such purchasers.
215. Tax Adjustments in Exchange Rate.
If an event shall occur which causes the Exchange Rate to be subject
to adjustment pursuant to Section 204 hereof, or a merger, consolidation or sale
or transfer of assets or of any voluntary or involuntary dissolution,
liquidation or winding up of Chevron shall occur requiring a supplemental
indenture under Section 211 hereof, and if, within ten days after the effective
date of such transaction, the Company shall furnish the Exchange Agent with an
Opinion of Counsel to the effect that such transaction is taxable to the Company
or the Exchange Agent and an Officers' Certificate as to the amount of federal,
state and local tax payable by the Company or the Exchange Agent as a result of
such transaction (computed by the Company at the marginal tax rate applicable to
such transaction), the Exchange Agent shall pay to, or to the order of, the
Company, in the case of taxes payable by the Company, or itself, in the case of
taxes payable by it, the cash held by it and apportioned or to be apportioned to
the Exchange Property for which Outstanding Debentures are exchangeable, up to
the amount of such taxes. In the event that the cash held by the Exchange Agent
and so apportioned or to be apportioned is insufficient to pay to the Company or
the Exchange Agent the amount of such taxes, the Exchange Agent shall, as soon
as reasonably practicable and to the extent legally permissible, sell in
accordance with written instructions received by the Company, or if no such
instructions are received, as determined by the Exchange Agent, such Exchange
Property (including any securities or other property included therein) as may be
necessary to pay, from the proceeds thereof after payment of any taxes by the
Company or the Exchange Agent on such sale, the amount of any such
insufficiency. The Exchange Agent shall notify the Company and the Trustee of
any such sale and the Exchange Property sold. Following payment of all
necessary amounts to the Company or the Exchange Agent, such Exchange Property
held by the Exchange Agent and any cash apportioned thereto shall be
proportionately adjusted so as to be apportioned equally to the Debentures
Outstanding as of immediately after the close of business on the record date or
the effective date for the transaction to which this Section 215 applies (as
shall be specified in Section 204 or 211 hereof, whichever is applicable). Any
Holder surrendering any Debentures after such record date, or such effective
date, as the case may be, shall be, entitled to receive the Exchange Property
and any cash apportioned thereto as so adjusted pursuant to this paragraph. If
this Section 215 shall apply to a transaction and the sale by the Company of the
consideration receivable therein shall not be legally permissible and the amount
of cash apportioned to the
17
Exchange Property shall not be sufficient to pay all taxes payable by the
Company or the Exchange Agent which arise from such transaction, the Company may
direct the Exchange Agent to segregate for the benefit of the Company or the
Exchange Agent (as the case may be) or deliver to the Company or the Exchange
Agent (as the case may be) an amount of Exchange Property theretofore held by
the Exchange Agent for exchange of Debentures having a Market Value equal to the
unsatisfied portion of the tax payable by the Company or the Exchange Agent (as
the case may be) with respect to such transaction including any tax payable upon
the delivery or sale thereof in order to satisfy the aforementioned tax, and the
Exchange Property shall thereafter be solely for the account of the Company or
the Exchange Agent (as the case may be) and Holders of Debentures shall have no
rights thereto.
In the event that an Opinion of Counsel given pursuant to this Fourth
Supplemental Indenture concludes that whether taxes are payable by the Company
or the Exchange Agent is uncertain under the then state of the law or facts or
both, the Company shall have the option of requesting the Exchange Agent to
segregate the amount of funds that would be payable (or securities or other
property in lieu thereof), if such taxes were deemed payable, together with the
amount estimated in good faith to be the reasonable costs and expenses
(including attorneys' fees) of obtaining a determination as set forth below.
The Holders shall have no rights to such funds or securities or other property,
which shall be held by the Exchange Agent for the Company (or itself, as the
case may be), the Exchange Property and any cash apportioned thereto deliverable
upon exchange of Debentures pursuant to this Article Two shall be reapportioned
as though such segregated amounts had been paid to the Company or the Exchange
Agent for such taxes, and any Holder surrendering any Debenture after the record
or effective date of the applicable transaction giving rise to an adjustment
pursuant to this Section 215 shall be entitled to receive only such Exchange
Property and any cash apportioned thereto upon exchange of Debentures pursuant
to this Article Two as so reapportioned. The Company shall thereupon in good
faith seek an appropriate determination from the appropriate agencies and, if
judged necessary by the Company in good faith, from appropriate courts, as to
whether taxes are so payable. If an appropriate determination is made that such
taxes are so payable, then the Exchange Agent shall immediately pay the funds or
deliver the securities or other property so segregated to the Company (or, if
taxes are payable by the Exchange Agent, retain such funds or securities or
other property for itself), and if an appropriate determination is made that
such taxes are not payable or an amount of tax is payable which is less than the
amount of funds or property so segregated, then the Exchange Agent, after paying
to the Company (or itself, as the case may be) out of such funds or securities
or other property the reasonable expenses and costs (including attorneys' fees)
of obtaining such determination (and any taxes so payable), shall apportion such
remaining funds or securities or other property which had been so segregated
among the Exchange Property and cash apportioned thereto as of immediately after
the close of business on the record date or the effective date of such
transaction giving rise to an adjustment pursuant to Section 204 or 211 hereof,
whichever is applicable. If any Debenture has been exchanged on or after such
record date or such effective date, as the case may be, and before a
determination is made that no taxes are payable or an amount of tax is payable
which is less than the amount of funds or securities or other property so
segregated, the Company to the extent not previously delivered, shall deliver
such Exchange Property and any cash apportioned thereto as
18
reapportioned following such determination, to the person to which and in the
manner in which the other proceeds of the exchange of such Debenture were
delivered.
216. Cash Equivalent.
Notwithstanding any other provisions in this Article Two, in lieu of
delivering certificates representing shares of Chevron Common Stock or other
Exchange Property in exchange for Debentures surrendered in accordance with
Section 202 hereof, the Company may, at the Company's option, pay to the Holder
surrendering such Debentures an amount in cash equal to the value of the
Exchange Property for which such Debentures are exchangeable (based on the
Market Price on the date of receipt by the Company of the notice of exchange
delivered by such Holder pursuant to Section 202 hereof). Prior to so directing
the Exchange Agent to make any such cash payment, the Company shall deposit with
the Exchange Agent the cash so payable.
217. Repurchase Rights.
In the event that the Company obtains or otherwise releases any
Chevron Common Stock or other Exchange Property in any manner otherwise than as
contemplated by Section 218 hereof, each Holder will have the right ("Repurchase
Right"), at such Holder's option, to require the Company to repurchase all of
such Holder's Debentures, or a portion thereof which is $1,000 or any integral
multiple thereof, in the manner and at the price described below.
Promptly (and in any event within 10 days) after the Company has
obtained or released any Chevron Common Stock or any other Exchange Property in
any manner otherwise than as contemplated by Section 218 hereof, the Exchange
Agent will mail to all Holders of record of the Debentures a notice thereof and
the Repurchase Right arising as a result thereof (a "Repurchase Notice"). To
exercise the Repurchase Right, a Holder of Debentures must deliver on or before
the fifteenth day after the date of the Repurchase Notice irrevocable written
notice to the Exchange Agent of the Holder's exercise of such right, together
with the Debentures with respect to which the right is being exercised, duly
endorsed for transfer.
On the date ("Repurchase Date") that is 30 days after the date of the
Repurchase Notice, the Company will be required to repurchase all Debentures in
respect of which the Repurchase Right has been exercised at the following price:
(i) if the date on which the Company's obtaining or release of Exchange Property
in a manner not contemplated by Section 218 hereof first occurs (the "Triggering
Date") is before July 15, 2000, the product of (a) 120% and (b) the greater of
the principal amount of such Debentures (plus accrued and unpaid interest, if
any, to the Repurchase Date) and the Market Price of the Exchange Property
deliverable in exchange for such Debentures on the Triggering Date (or if such
date is not a Business Day, on the next succeeding Business Day); and (h) if the
Triggering Date occurs on or after July 15, 2000, the greater of (a) the
redemption price specified in Section 103 hereof on the Triggering Date and (b)
the Market Price of the Exchange Property deliverable in exchange for such
Debentures on the Triggering Date (or if such date is not a Business Day, on the
next succeeding Business Day).
19
The obligation of the Company to deliver Exchange Property (or cash in
lieu thereof) in exchange for Debentures shall survive and continue to apply in
full force and effect following and notwithstanding the occurrence of any event
triggering a Repurchase Right. Failure by the Company to exchange Debentures in
accordance with this Fourth Supplemental Indenture or to repurchase Debentures
upon valid exercise of a Repurchase Right will constitute an Event of Default
with respect to the Debentures pursuant to Section 501(7) of the Indenture, and
Holders of Debentures will have the remedies provided for in the Indenture,
including acceleration of the indebtedness evidenced by the Debentures, in the
event of any such failure.
If an offer is made to repurchase Debentures in connection with a
Repurchase Right, the Company will comply with all tender offer rules, including
but not limited to Sections 13(e) and 14(e) under the Exchange Act and Rules
13e-1 and 14e-1 thereunder, to the extent applicable to such offer.
218. Withdrawals of Exchange Property. The Company shall be entitled,
out of the Exchange Property held by the Exchange Agent, to such kind and
quantity of Exchange Property and such amount of any cash (the investments
contemplated by Section 205 hereof being deemed for these purposes to be cash
and to be valued at their outstanding principal balance) and other Exchange
Property as shall be in excess of the quantity of Exchange Property held by the
Exchange Agent that would be deliverable by the Exchange Agent upon the exchange
of all Debentures then outstanding, and such excess shall be held by the
Exchange Agent for the account of the Company and, upon delivery of the
Officers' Certificate provided for in the following sentence, released to the
Company upon demand. Upon demand of any withdrawal of Exchange Property from the
Exchange Agent, the Company shall deliver to the Trustee an Officers'
Certificate (and a copy thereof to the Exchange Agent) which shall state (i) the
principal amount of Debentures then outstanding and the kind and amount of
Exchange Property required for delivery to the Holders thereof upon exchange,
(ii) that the withdrawal of the kind and amount of Exchange Property referred to
in such demand is permitted by the provisions of this Fourth Supplemental
Indenture and (iii) that the Exchange Property so to be withdrawn would not be
deliverable upon exchange of all Debentures then outstanding. In delivering such
certificate, the Company may rely on information furnished to it by the Exchange
Agent as to the kind and amount of Exchange Property held by it and the kind and
amount thereof previously delivered to Holders of Debentures.
219. Certain Definitions. All terms used but not defined in this
Fourth Supplemental Indenture that are defined in the Indenture shall have the
meanings specified in the Indenture unless the context otherwise requires. As
used in this Fourth Supplemental Indenture, the following terms shall have the
following meanings:
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Common Stock" means the common stock of Chevron of the class
authorized and designated as common stock, par value $3.00 per share, as such
common stock may be changed or reclassified from time to time.
20
"Exchange Act" means the Securities Exchange Act of 1934 and any
successor statute thereto, in each case as amended from time to time.
"Exchange Agent" means Chase Bank of Texas, National Association,
Exchange Agent under the Exchange Agreement, until a successor Exchange Agent
shall have become such pursuant to the provisions of Section 16 of the Exchange
Agreement, and thereafter "Exchange Agent" shall mean such successor Exchange
Agent thereunder and from time to time any subsequent successor pursuant to such
provisions.
"Exchange Agreement" means the Exchange Agent Agreement entered into
pursuant to the provisions of Section 205 hereof, as the same may be
supplemented and amended from time to time.
"Exchange Property" means initially the aggregate of the ____________
shares of Chevron Common Stock delivered to the Exchange Agent by the Company
pursuant to the Exchange Agreement simultaneously with the execution and
delivery of this Fourth Supplemental Indenture, and thereafter means the
securities, cash and other property, if any, which at the time are deliverable
upon surrender of the Debentures for exchange in accordance with Article Two of
this Fourth Supplemental Indenture.
"Global Debenture" means a Debenture that evidences all or part of the
Debentures and bears the legend set forth in Section 108 hereof.
"Market Price" means, when used with respect to any security as of any
date, (i) if such security is not then listed or admitted to trading on any
national securities exchange registered under the Exchange Act, the average of
the high bid and low asked prices in the over-the-counter market on such date as
reported by the National Association of Securities Dealers Automated Quotation
System or (ii) if such security is then listed or admitted to trading on any
such national securities exchange, the last reported sales price regular way on
such date or, in case no such reported sale takes place on such date, the
average of the reported closing bid and asked prices regular way on such date,
in each case on the principal national securities exchange on which such
security is then listed or admitted to trading, or (iii) if such prices are not
available on such date, the market value of such security on such date
determined in such manner as shall be satisfactory to the Exchange Agent, which
shall be entitled to rely for such purposes on the advice of any firm of
investment bankers or security dealers having familiarity with such security.
"Market Price" means, when used with respect to any property (other than any
security) as of any date, the market value of such property on such date
determined in such manner as shall be satisfactory to the Exchange Agent, which
shall be entitled to rely for such purposes on the advice of any firm of
investment bankers having familiarity with such property.
21
ARTICLE THREE
301. Acceptance of Trust.
The Trustee accepts the trust hereby created and agrees to perform the
same upon the terms and conditions herein and in the Indenture set forth.
302. Trustee Not Responsible for Validity, Due Execution or Recitals.
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Fourth Supplemental Indenture
or the due execution thereof by the Company or for or in respect of the recitals
herein contained, all such recitals being made by the Company solely.
303. Counterparts.
This Fourth Supplemental Indenture may be executed in several
counterparts, each of which shall be an original and all of which together shall
constitute but one and the same instrument.
22
IN WITNESS WHEREOF, PENNZOIL COMPANY, party hereto of the first part,
has caused its corporate name to be hereunto affixed, and this instrument to be
signed and sealed by a Group Vice President, for and on its behalf, in the [City
of New York, New York] and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, party
hereto of the second part, has caused its corporate name to be hereunto affixed,
and this instrument to be signed and sealed by a Vice President, for and on its
behalf, in the [City of New York], all as of the _____ day of _____________,
1998.
PENNZOIL COMPANY
[Corporate Seal] By:
---------------------------------------------
Xxxxx X. Xxxxxxxx, XX
Group Vice President - Finance and Accounting
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
As Trustee
[Corporate Seal] By:
---------------------------------------------
[Name]
[Title]
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Xxxxx X. Xxxxxxxx, XX, Group Vice President of Pennzoil
Company, known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
therein expressed, in the capacity therein set forth and as the act and deed of
said association.
GIVEN UNDER MY HAND AND SEAL of office, this the _____ day of
_____________, 1998.
---------------------------------------------
[NOTARIAL SEAL] Notary Public
23
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared _____________ of Chase Bank of Texas, National Association,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
therein expressed, in the capacity therein set forth and as the act and deed of
said association.
GIVEN UNDER MY HAND AND SEAL of office, this the _____ day of
_____________, 1998.
[NOTARIAL SEAL]
---------------------------------------------
Notary Public
