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EXHIBIT 4.3
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THE AES CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
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FIRST SUPPLEMENTAL INDENTURE
Dated as of March __, 1997
TO
JUNIOR SUBORDINATED INDENTURE
Dated as of March__, 1997
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_____% Junior Subordinated Convertible Securities
Due 2027
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The First Supplemental INDENTURE, dated as of the _____ day of March __,
1997 (the "First Supplemental Indenture"), between THE AES CORPORATION, a
corporation duly organized and existing under the laws of the State of Delaware
(hereinafter sometimes referred to as the "Company") and The First National Bank
of Chicago, a national banking association, as trustee (hereinafter sometimes
referred to as the "Trustee") under the Junior Subordinated Indenture dated as
of March __, 1997 between the Company and the Trustee (the "Indenture") (except
as otherwise set forth herein, all terms used and not defined herein are used as
defined in the Indenture or in the Declaration of Trust);
WHEREAS, the Company executed and delivered the Indenture to the Trustee
to provide for the future issuance of its junior subordinated securities (the
"Debentures"), said Debentures to be issued from time to time in series as might
be determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered thereunder as in the
Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Debentures to be known as
its ____% Junior Subordinated Convertible Debentures due 2027 (said series being
hereinafter referred to as the "Series ____% Debentures"), the form and
substance of such Series ____% Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture; and
WHEREAS, the Company has caused to be formed AES Trust I ("AES Trust I")
as a statutory business trust under the Business Trust Act of the State of
Delaware (12 Del. Code ss. 3801 et seq.) pursuant to a declaration of trust
dated November 1, 1996 (the "Original Declaration") and the filing of an amended
and restated certificate of trust with the Secretary of State of the State of
Delaware on December 5, 1996; and
WHEREAS, the Original Declaration is to be amended and restated in its
entirety pursuant to an Amended and Restated Declaration of Trust dated as of
March __, 1997 (such Amended and Restated Declaration of Trust, as amended from
time to time, the "Declaration of Trust"); and
WHEREAS, AES Trust I desires to issue its $______ Term Convertible
Securities, Series A (the "Preferred Securities" or "TECONS") and sell such
Preferred Securities to initial purchasers; and
WHEREAS, in connection with such purchases of Preferred Securities and the
related purchase by the Company of the Common Securities (as defined in the
Declaration of Trust) of AES Trust I, AES Trust I will purchase as trust assets
Series ____% Debentures; and
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WHEREAS, pursuant to the Declaration of Trust, the legal title to the
Series ____% Debentures shall be owned and held of record in the name of The
First National Bank of Chicago or its successor under the Declaration of Trust,
as Property Trustee (the "Property Trustee"), in trust for the benefit of
holders of the Preferred Securities and the Common Securities; and
WHEREAS, upon the occurrence of a Special Event (as defined in the
Declaration of Trust) the Regular Trustees (as defined in the Declaration of
Trust) of AES Trust I shall, unless the Series ____% Debentures are redeemed as
described herein, dissolve AES Trust I and cause to be distributed to the
holders of Preferred Securities and Common Securities, on a Pro Rata basis
(determined as provided in the terms of the Preferred Securities and Common
Securities attached as Exhibits B and C to the Declaration of Trust), Series
____% Debentures and, in connection with a Liquidation Distribution (as defined
in the Declaration of Trust), the Regular Trustees may cause to be distributed
to holders of Preferred Securities and Common Securities, on such a Pro Rata
basis, Series ____% Debentures (each a "Dissolution Event"); and
WHEREAS, the Company desires and has requested the Trustee to join with it
in the execution and delivery of this First Supplemental Indenture, and all
requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series ____%
Debentures when executed by the Company and authenticated and delivered by the
Trustee, the valid obligations of the Company, have been performed and
fulfilled, and the execution and delivery hereof have been in all respects duly
authorized;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Series ____% Debentures by the holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Series ____%
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE ONE
General Terms and Conditions of
the Series ____% Debentures
SECTION 1.01. There shall be and is hereby authorized a series of
Debentures designated the "____% Junior Subordinated Convertible Debentures Due
2027", limited in aggregate principal amount to $200,000,000 (except as provided
in this Section 1.01 and 7.01). Upon exercise of the overallotment option set
forth in the Underwriting Agreement (as defined in the Declaration of Trust),
additional Series ____% Debentures in the aggregate principal amount of up to
$30,000,000 may be executed by the Company and delivered to
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the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Series ____% Debentures to or upon the written order of the
Company, which order shall be accompanied by evidence satisfactory to the
Trustee that the overallotment option has been exercised. The Series ____%
Debentures shall mature and the principal shall be due and payable together with
all accrued and unpaid interest thereon, including Compounded Interest (as
hereinafter defined) on _________ , 2027 (the "Maturity Date").
SECTION 1.02. (a) Except as provided in Section 1.02(b), the Series ____%
Debentures shall be issued in fully registered certificated form without
interest coupons. Principal and interest on the Series ____% Debentures issued
in certificated form will be payable, the transfer of such Series ____%
Debentures will be registrable and such Series ____% Debentures will be
exchangeable for Series ____% Debentures bearing identical terms and provisions
at the office or agency of the Company in the Borough of Manhattan, The City and
State of New York; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered holder at such
address as shall appear in the Debenture register and that the payment of
principal with respect to the Series ____% Debentures will only be made upon
surrender of the Series ____% Debentures to the Trustee. Notwithstanding the
foregoing, so long as the Property Trustee is the legal owner and record holder
of the Series ____% Debentures, the payment of the principal of and interest
(including Compounded Interest, if any) on the Series ____% Debentures held by
the Property Trustee will be made by the Company in immediately available funds
on the payment date therefor at such place and to the Property Account (as
defined in the Declaration of Trust) established and maintained by the Property
Trustee pursuant to the Declaration of Trust.
(b) In connection with a Dissolution Event;
(i) Series ____% Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a Global Debenture
representing the Series ____% Debentures in an aggregate principal
amount equal to all Outstanding Series ____% Debentures, to be
registered in the name of the Depositary, or its nominee, and
delivered by the Trustee to the Depositary for crediting to the
accounts of its participants pursuant to the instructions of the
Regular Trustees (as defined in the Declaration of Trust). The
Company upon any such presentation shall execute a Global Debenture
representing the Series ____% Debentures in such aggregate principal
amount and deliver the same to the Trustee for authentication and
delivery in accordance with the Indenture and this First
Supplemental Indenture. Payments on the Series ____% Debentures
issued as a Global Debenture will be made to the Depositary; and
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(ii) if any Preferred Securities are held in non book-entry certificated
form, Series ____% Debentures in certificated form may be presented
to the Trustee by the Property Trustee and any Preferred Security
Certificate (as defined in the Declaration of Trust) which
represents Preferred Securities other than Preferred Securities held
by the Clearing Agency (as defined in the Declaration of Trust) or
its nominee ("Non Book-Entry Preferred Securities") will be deemed
to represent beneficial interests in Series ____% Debentures
presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the
Non Book-Entry Preferred Securities until such Preferred Security
Certificate are presented to the Debenture Registrar for transfer or
reissuance at which time such Preferred Security Certificate will be
canceled and a Series ____% Debenture, registered in the name of the
holder of the Preferred Security Certificate or the transferee of
the holder of such Preferred Security Certificate, as the case may
be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate canceled
will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and
this First Supplemental Indenture. On issue of such Series ____%
Debentures, Series ____% Debentures with an equivalent aggregate
amount that were presented by the Property Trustee to the Trustee
will be deemed to have been canceled.
SECTION 1.03. Each Series ____% Debenture will bear interest at the rate
of ____% per annum from _______________, 1997 until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum, compounded quarterly,
payable (subject to the provisions of Article Three) quarterly in arrears on the
last day of each calendar quarter (each an "Interest Payment Date", commencing
on __________ __, 1997), to the person in whose name such Series ____% Debenture
or any predecessor Series ____% Debenture is registered, at the close of
business on the regular record date for such interest installment, which, except
as set forth below, shall be, in respect of any Series ____% Debentures of which
the Property Trustee is the registered holder of or a Global Debenture, the
close of business on the business day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if the Preferred Securities are no
longer in book-entry only form or if pursuant to the provisions of Section
2.11(c) of the Indenture the Series ____% Debentures are not represented by a
Global Debenture, the regular record dates for such interest installment shall
be the close of business on the fifteenth day of the month in which that
Interest Payment Date occurs. Any such interest installment not punctually paid
or duly provided for shall forthwith cease to be payable to the registered
holders on such regular record date, and may be paid to the person in whose name
the Series ____% Debenture (or one or more Predecessor Debentures) is registered
at the close of business on a special record date to
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be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered holders of the Series ____% Debentures
not less than 10 days prior to such special record date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Series ____% Debentures may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on the Series ____% Debentures is not a business day,
then payment of interest payable on such date will be made on the next
succeeding day which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding business day, in each case with the same force and effect as if made
on such date.
ARTICLE TWO
Optional Redemption
of the Series ____% Debentures
SECTION 2.01. Except as provided in Section 2.02 and subject to the
provisions below, Series ____% Debentures may not be redeemed by the Company
prior to , 2000. Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Series ____% Debentures, in whole or
in part, from time to time, on or after ___________, 2000, upon not less than 30
nor more than 60 days notice to the Holder of the Series __% Debentures, at the
following prices (expressed as percentages of the principal amount of the Series
__% Debentures) (the "Optional Redemption Price"), together with any accrued and
unpaid interest thereon, including Compounded Interest (as defined herein), if
any, to, but excluding, the date of such redemption, if redeemed during the
12-month period beginning _____:
Year Redemption Price
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2000 ___%
2001 ___%
2002 ___%
2003 ___%
2004 ___%
and 100% if redeemed on or after _____, 2005.
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If the Series __% Debentures are redeemed on any Interest Payment Date,
accrued and unpaid interest shall be payable to Holders of record on the
relevant record date.
The Company may not redeem any Series __% Debentures unless all accrued
and unpaid interest thereon, including Compounded Interest, if any, has been
paid for all quarterly periods terminating on or prior to the date of notice of
redemption. So long as the corresponding Trust Securities are outstanding, the
proceeds from the redemption of the Series __% Debentures will be used to redeem
the Trust Securities.
SECTION 2.02. If, at any time, a Tax Event (as defined below) shall occur
or be continuing and (i) the Regular Trustees and the Company shall have
received an opinion (a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Series ____% Debentures for United
States federal income tax purposes even if the Series ____% Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holder's interest in AES Trust I as set forth in the
Declaration of Trust or (ii) the Regular Trustees shall have been informed by
such tax counsel that a No Recognition Opinion (as defined below) cannot be
delivered to AES Trust I, the Company shall have the right at any time, upon not
less than 30 nor more than 60 days' notice, to redeem the Series ____%
Debentures in whole or in part for cash at a price equal to 100% of the
principal amount thereof, together with any accrued and unpaid interest thereon,
including Compound Interest, if any, to, but excluding the date of redemption,
within 90 days following the occurrence of such Tax Event; provided, however,
that, if at the time there is available to the Company or the Regular Trustees
on behalf of AES Trust I the opportunity to eliminate, within such 90 day
period, the Tax Event by taking some ministerial action ("Ministerial Action"),
such as filing a form or making an election, or pursuing some other similar
reasonable measure, which has no adverse effect on AES Trust I, the Company or
the holders of the Preferred Securities, the Company or the Regular Trustees on
behalf of AES Trust I will pursue such measure in lieu of redemption and
provided further that the Company shall have no right to redeem the Series ____%
Debentures while the Regular Trustees on behalf of AES Trust I are pursuing any
such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel experienced
in such matters (a "Dissolution Tax Opinion") to the effect that on or after
March __, 1997 as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application of
any such laws or regulations by any legislative body, court, governmental agency
or regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any
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governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after March__, 1997 there is more than an insubstantial risk that (i) AES
Trust I is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Series ____% Debentures, (ii) AES Trust I is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by the Company to AES Trust I on
the Series ____% Debentures is not, or within 90 days of the date thereof will
not be, deductible by the Company for United States federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue ruling of the Internal Revenue Service, to
the effect that the holders of the Preferred Securities will not recognize any
gain or loss for United States federal income tax purposes as a result of a
dissolution of AES Trust and distribution of the Series ____% Debentures as
provided in the Declaration of Trust.
SECTION 2.03. If the Series ____% Debentures are only partially redeemed
pursuant to this Article Two, the Series ____% Debentures will be redeemed pro
rata or by lot or by any other method utilized by the Trustee, provided that if
at the time of redemption, the Series ____% Debentures are registered as a
Global Debenture, the Depository shall determine by lot the principal amount of
such Series ____% Debentures held by each Debenture Holder to be redeemed in
accordance with its customary procedures. Notwithstanding the foregoing, if a
partial redemption of the Series ____% Debentures would result in the delisting
of the Preferred Securities by any national securities exchange or other
organization on which the Preferred Securities are then listed, the Company
shall not be permitted to effect such partial redemption and will only redeem
the Series ____% Debentures in whole.
ARTICLE THREE
Extension of Interest Payment Period
SECTION 3.01. So long as the Company is not in default in the payment of
interest on the Series ____% Debentures, the Company shall have the right, at
any time during the term of the Series ____% Debentures, from time to time to
extend the interest payment period of such Series ____% Debentures for up to 20
consecutive quarterly interest periods (the "Extended Interest Payment Period"),
at the end of which period the Company shall pay all interest accrued and unpaid
thereon (together with interest thereon at the rate of ____% per annum to the
extent permitted by applicable law, compounded
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quarterly ("Compounded Interest")); provided that no Extended Interest Payment
Period may extend beyond the Maturity Date or redemption date of the Series __%
Debentures. During such Extended Interest Payment Period the Company shall not
declare or pay any dividend on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any of its common stock or
preferred stock or make any guarantee payments with respect thereto; provided
that the foregoing will not apply to any stock dividends paid by the Company in
Common Stock. Prior to the termination of any such Extended Interest Payment
Period, the Company may pay all or any portion of the interest accrued on the
Series ____% Debentures on any Interest Payment Date to holders of record on the
regular record date for such Interest Payment Date or from time to time further
extend such Period; provided that such Period together with all such further
extensions thereof shall not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all accrued and unpaid interest then due, together with Compounded
Interest, the Company may select a new Extended Interest Payment Period, subject
to the foregoing requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof. At the end of the
Extended Interest Payment Period the Company shall pay all interest accrued and
unpaid on the Series ____% Debentures including any Compounded Interest which
shall be payable to the holders of the Series ____% Debentures in whose names
the Series ____% Debentures are registered in the Debenture register on the
first record date after the end of the Extended Interest Payment Period.
SECTION 3.02. (a) So long as the Property Trustee is the legal owner and
holder of record of the Series ____% Debentures, at the time the Company selects
an Extended Interest Payment Period, the Company shall give both the Property
Trustee and the Trustee written notice of its selection of such Extended
Interest Payment Period one business day prior to the earlier of (i) the next
succeeding date on which distributions on the Preferred Securities are payable
or (ii) the date AES Trust I is required to give notice of the record date or
the date such distributions are payable to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities, but in any event not less than one business day prior to such record
date. The Company shall cause AES Trust I to give notice of the Company's
selection of such Extended Interest Payment Period to the holders of the
Preferred Securities.
(b) If as a result of a Dissolution Event Series ____% Debentures have
been distributed to holders of Preferred Securities and Common Securities, at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Series ____% Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
business days prior to the earlier of (i) the next succeeding Interest Payment
Date or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Series ____%
Debentures.
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SECTION 3.03. The quarter in which any notice is given pursuant to Section
3.02 shall be counted as one of the quarters permitted in the maximum Extended
Interest Payment Period permitted under this Article Three.
ARTICLE FOUR
Covenants Applicable to Series ____% Debentures
SECTION 4.01. So long as any Preferred Securities remain outstanding, the
Company will not declare or pay any dividends on, or redeem, purchase, acquire
or make a distribution or liquidation payment with respect to, any of its common
stock or preferred stock or make any guarantee payments with respect thereto if
at such time (i) the Company shall be in default with respect to its Guarantee
Payments (as defined in the Guarantee Agreement) or other payment obligations
under the Guarantee Agreement, (ii) there shall have occurred any Event of
Default under the Indenture with respect to the Series ____% Debentures or (iii)
the Company shall have given notice of its election of an Extended Interest
Payment Period and such Period, or any extension thereof, is continuing;
provided that the foregoing will not apply to any stock dividends paid by the
Company in Common Stock.
SECTION 4.02. In connection with the distribution of the Series ____%
Debentures to the holders of the Preferred Securities upon a Dissolution Event,
the Company will use its best efforts to list such Series ____% Debentures on
the New York Stock Exchange or on such other exchange as the Preferred
Securities are then listed and traded.
SECTION 4.03. The Company covenants and agrees for the benefit of the
holders of the Preferred Securities to comply fully with all of its obligations
and agreements under the Declaration of Trust, including, without limitation,
its obligations under Article 4 thereof.
SECTION 4.04. Prior to the distribution of Series ____% Debentures to the
holders of Preferred Securities upon a Dissolution Event, the Company covenants
and agrees for the benefit of the holders of the Preferred Securities (i) not to
cause or permit the Common Securities to be transferred except as permitted by
the Declaration of Trust and (ii) that it will use reasonable efforts to cause
the Trust to continue to be treated as a grantor trust for United States federal
income tax purposes, except in connection with a distribution of the Series
____% Debentures as provided in the Declaration of Trust.
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ARTICLE FIVE
Conversion of Debentures
SECTION 5.01. Subject to and upon compliance with the provisions of this
Article Five, the Series __ % Debentures are at the option of the Holder, at any
time through the close of business on ______, 2027 (or, in the case of Series
___% Debentures called for redemption, prior to the close of business on the
Business Day prior to the corresponding redemption date) into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
rate of _____ shares of Common Stock for each $_____ in aggregate principal
amount of Series ___% Debentures (equal to a conversion price (as adjusted from
time to time, the "Conversion Price") of $_____ per share of Common Stock),
subject to adjustment as described in this Article Five. A Holder of Series ___%
Debentures may convert any portion of the principal amount of the Series ___%
Debentures into that number of fully paid and nonassessable shares of Common
Stock obtained by dividing the principal amount of the Series ____% Debentures
to be converted by such conversion price. All calculations under this Article
Five shall be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be.
SECTION 5.02. (a) In order to convert all or a portion of the Series ___%
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable Notice of Conversion setting forth the principal amount of Series
____% Debentures to be converted, together with the name or names, if other than
the Holder, in which the shares of Common Stock should be issued upon conversion
and, if such Series ___% Debentures are definitive Series ___% Debentures,
surrender to the Conversion Agent the Series ___% Debentures to be converted,
duly endorsed or assigned to the Company or in blank. In addition, a holder of
Preferred Securities may exercise its right under the Declaration to convert
such Preferred Securities into Common Stock by delivering to the Conversion
Agent an irrevocable Notice of Conversion setting forth the information called
for by the preceding sentence and directing the Conversion Agent to (i) exchange
such Preferred Security for a portion of the Series ___% Debentures held by the
Trust (at an exchange rate of $___ principal amount of Series ___% Debentures
for each Preferred Security) and (ii) immediately convert such Series ___%
Debentures, on behalf of such holder, into Common Stock of the Company pursuant
to this Article Five and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are outstanding, the Trust
shall not convert any Series ___% Debentures except pursuant to a Notice of
Conversion delivered to the Conversion Agent by a holder of Preferred
Securities. Any reference herein to a "holder" of Preferred Securities shall
mean a "Holder" of such securities as defined in the Declaration of Trust.
If a Preferred Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before the
opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in
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whose name the Series ___% Debenture is registered at the close of business on
such record date, and (other than a Series ___% Debenture or a portion of a
Series ___% Debenture called for redemption on a redemption date occurring after
such record date and on or prior to such Distribution payment date) when so
surrendered for conversion, the Series ___% Debenture must be accompanied by
payment of an amount equal to the Distribution payable on such Distribution
payment date. Except as otherwise provided in the immediately preceding
sentence, in the case of any Series ___% Debenture which is converted, interest
whose Maturity Date is after the date of conversion of such Series ___%
Debenture shall not be payable, and the Company shall not make nor be required
to make any other payment, adjustment or allowance with respect to accrued but
unpaid interest on the Series ___% Debenture being converted, which shall be
deemed to be paid in full. Each conversion shall be deemed to have been effected
immediately prior to the close of business on the day on which the Notice of
Conversion was received (the "Conversion Date") by the Conversion Agent from the
Holder or from a holder of the Preferred Securities effecting a conversion
thereof pursuant to its conversion rights under the Declaration, as the case may
be. The Person or Persons entitled to receive the Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as of the Conversion Date. As promptly as
practicable on or after the Conversion Date, the Company shall issue and deliver
at the office of the Conversion Agent, unless otherwise directed by the Holder
in the Notice of Conversion, a certificate or certificates for the number of
full shares of Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Series ___% Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at maturity of the
portion of Series ___% Debentures so converted and any unpaid interest
(including Compounded Interest) accrued on such Series ___% Debentures at the
time of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Series ___% Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a day on which any securities are traded on the national securities exchange or
quotation system used to determine the Closing Price (a "Trading Day"), on the
next Trading Day, and the Conversion Agent in turn will make such payment, if
any, to the Holder of the Series ___% Debentures or the holder of the Preferred
Securities so converted.
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(d) In the event of the conversion of any Series ___% Debenture in part
only, a new Series ___% Debenture or Series ___% Debentures for the unconverted
portion thereof will be issued in the name of the Holder thereof upon the
cancellation thereof in accordance with Section 2.05 of the Indenture.
(e) In effecting the conversion transactions described in this Section
5.02, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Series ___% Debentures)
and as agent of the Holders of Series ___% Debentures (in the conversion of
Series ___% Debentures into Common Stock), as the case may be. The Conversion
Agent is hereby authorized (i) to exchange Series ___% Debentures held by the
Trust from time to time for Preferred Securities in connection with the
conversion of such Preferred Securities in accordance with this Article Five and
(ii) to convert all or a portion of the Series ___% Debentures into Common Stock
and thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article Five and to deliver to the Trust a new Series ___%
Debenture or Series ___% Debentures for any resulting unconverted principal
amount.
SECTION 5.03. (a) The Conversion Price shall be adjusted from time to time
as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on Common Stock in shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the date fixed for the determination of shareholders entitled to receive
such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator of which shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (i),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company (except to the extent
such dividend or distribution is being made with respect to such shares)
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock.
(ii) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller amount of shares of
Common Stock, then the Conversion Price in effect at the opening of
business on the day following the day upon which such combination
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becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iii) In case the Company shall issue rights or warrants to all
holders of Common Stock entitling them (for a period expiring within 45
days after the record date fixed for a distribution of such rights or
warrants) to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price (as hereinafter defined) per
share (determined as provided in subparagraph (vii) below) of Common Stock
on the date fixed for the determination of shareholders entitled to
receive such rights or warrants (other than pursuant to a dividend
reinvestment plan), then the Conversion Price in effect at the opening of
business on the day following the date fixed for such determination shall
be reduced by multiplying such Conversion Price by a fraction the
numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered
for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (iii),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees not to issue any
rights or warrants in respect of shares of Common Stock held in the
treasury of the Company. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in
effect had the adjustments made in respect of the issuance of such rights
or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered.
(iv) Subject to the second paragraph of this subparagraph (iv), in
case the Company shall, by dividend or otherwise, distribute to all
holders of Common Stock (A) shares of capital stock of the Company (other
than Common Stock), (B) evidence of indebtedness of the Company and/or (C)
other assets (including securities, but excluding (1) any rights or
warrants referred to in subparagraph (iii) above, (2) any rights or
warrants to obtain capital stock of a company other than the Company or
any subsidiary of the Company (including any rights offerings of the
Company with respect to capital stock of companies in which the Company
has
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an investment (a "Rights Offering")), (3) dividends or distributions in
connection with the liquidation, dissolution or winding-up of the Company,
(4) dividends payable solely in cash that may from time to time be fixed
by the Board of Directors of the Company and (5) dividends or
distributions referred to in subparagraph (i) above), then in each case
(unless the Company makes the election referred to in the next sentence)
the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such record date by a fraction the
numerator of which shall be the Current Market Price per share (determined
as provided in subparagraph (vii) below) of the Common Stock on such
record date (the "Reference Date") less the then fair market value on the
Reference Date (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive and shall be
described in a statement filed with the Depositary and the Trustee) of the
portion of the shares of capital stock of the Company, evidences of
indebtedness or other assets so distributed (and for which an adjustment
to the Conversion Price has not been made previously pursuant to the terms
of this Article Five) applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the Reference Date. However, the
Company may elect, in its sole discretion, in lieu of the foregoing
adjustment, to make adequate provision so that each holder of Securities
shall have the right to receive upon conversion thereof the amount and
kind of shares of capital stock, evidences of indebtedness or other assets
such holder would have received had such holder converted such shares on
such record date. If the Board of Directors of the Company determines the
fair market value of any distribution for purposes of this subparagraph
(iv) by reference to the actual or when issued trading market for any
securities (including shares of capital stock or evidence of indebtedness
of the Company) comprising a distribution of securities, it must in doing
so consider the price in such market over the period used in computing the
Current Market Price of the Common Stock.
For purposes of this subparagraph (iv), any dividend or distribution
that includes both (x) any of the items described in clauses (A), (B) or
(C) of the first paragraph of this subparagraph (iv) and (y) Common Stock
or rights or warrants to subscribe for or purchase Common Stock of the
type referred to in subparagraph (iii) shall be deemed to be (1) a
dividend or distribution of shares of capital stock of the Company (other
than Common Stock), evidences of indebtedness of the Company or other
assets of the type referred to in clause (C) of the first paragraph of
this subparagraph (iv) (making any Conversion Price reduction required by
this subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such Common Stock or rights or warrants to purchase Common
Stock of the type referred to in subparagraph (iii) (making any further
Conversion Price reduction required by subparagraph (i) or (iii) of this
Section 5.03(a)), except (A) the
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Reference Date of such dividend or distribution as defined in this
subparagraph (iv) shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such rights or warrants"
and "the date fixed for such determination" within the meaning of
subparagraphs (i) and (iii) of this Section 5.03(a) and (B) any shares of
Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section
5.03(a).
The occurrence of a distribution or the occurrence of any other
event as a result of which holders of Series ___% Debentures converting
such notes into Common Stock hereunder will not be entitled to receive
rights issued pursuant to any shareholder protective rights agreement now
or hereafter in effect (the "Other Rights") in the same amount and manner
as if such holders had converted such shares immediately prior to the
occurrence of such distribution or other event shall be deemed a
distribution of Other Rights for the purposes of conversion adjustments
pursuant to this subparagraph (iv). In lieu of making any adjustment to
the Conversion Price under this subparagraph (iv) as a result of such a
distribution of Other Rights, the Company may elect, in its sole
discretion, to provide that Other Rights shall be issuable in the same
amount and manner upon conversion of the Series ___% Debentures without
regard to whether the shares of Common Stock issuable upon conversion of
the Series ___% Debentures were issued before or after such distribution
or other event.
(v) In case the Company shall, by dividend or otherwise, at any time
distribute cash to all holders of Common Stock, excluding (A) any cash
dividends on Common Stock to the extent that the aggregate cash dividends
per share of Common Stock in any consecutive 12-month period do not exceed
the greater of (x) the amount per share of Common Stock of the cash
dividends paid on the Common Stock in the immediately preceding 12-month
period, to the extent that such dividends for the immediately preceding
12-month period did not require an adjustment to the Conversion Price
pursuant to this subparagraph (v) (as adjusted to reflect subdivisions or
combinations of the Common Stock) and (y) 15% of the average of the daily
Closing Prices (as hereinafter defined) of the Common Stock for the ten
consecutive Trading Days immediately prior to the date of declaration of
such dividend and (B) any dividend or distribution in connection with the
liquidation, dissolution or winding-up of the Company, whether voluntary
or involuntary; provided, however, that no adjustment shall be made
pursuant to this subparagraph (v) if such distribution would otherwise
constitute a Fundamental Change (as hereinafter defined) and be reflected
in a resulting adjustment to the Conversion Price as provided in this
Article Five) then, in each case (unless the Company makes the election
referred to in the proviso following this clause), the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the
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Conversion Price in effect at the close of business on such record date by
a fraction the numerator of which shall be the Closing Price of a share of
Common Stock on such record date less the amount of cash so distributed
(to the extent not excluded as provided above) applicable to one share of
Common Stock, and the denominator shall be the Closing Price of a share of
Common Stock, such reduction to become effective immediately prior to the
opening of business on the day following such record date; provided,
however, that the Company may elect, in its sole discretion, in lieu of
the foregoing adjustment, to make adequate provision so that each holder
of Securities shall thereafter have the right to receive upon conversion
the amount of cash such holder would have received had such holder
converted each Security on such record date. If any adjustment is required
to be made as set forth in this subparagraph (v) as a result of a
distribution which is a dividend described in clause (A) of this
subparagraph (v), such adjustment will be based upon the amount by which
such distribution exceeds the amount of the dividend permitted to be
excluded pursuant to such clause (A) of this subparagraph (v). If an
adjustment is required to be made pursuant to this subparagraph (v) as a
result of a distribution which is not such a dividend, such adjustment
would be based upon the full amount of such distribution.
(vi) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Company or any subsidiary
of the Company for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination
shall be conclusive and shall be described in a resolution of such Board)
of any other consideration included in such payment per share of Common
Stock at the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as amended) exceed by more
than 10%, with any smaller excess being disregarded in computing the
adjustment to the Conversion Price provided in this subparagraph (vi), the
first reported sale price per share of Common Stock on the Trading Day
next succeeding the Expiration Time, then the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the Expiration Time by
a fraction the numerator of which shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the first reported sale price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to shareholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) on the Expiration
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Time and the first reported sale price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day
following the Expiration Time.
(vii) For the purpose of any computation under this Article Five,
the "Current Market Price per share" of Common Stock on any day shall be
deemed to be the average of the daily Closing Prices (as hereinafter
defined) per share of Common Stock for the ten consecutive Trading Days
prior to and including the date in question; provided, however, that (1)
if the "ex" date (as hereinafter defined) for any event (other than the
issuance, distribution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pursuant to this
Article Five (the "Other Event") occurs during such ten consecutive
Trading Days and prior to the "ex" date for the issuance, distribution or
Fundamental Change requiring such computation (the "Current Event"), the
Closing Price for each Trading Day prior to the "ex" date for such Other
Event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such Other Event, (2) if the "ex" date for any Other Event
occurs on or after the "ex" date for the Current Event and on or prior to
the date in question, the Closing Price for each Trading Day on and after
the "ex" date for such Other Event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of such Other Event
(provided that in the event that such fraction is required to be
determined at a date subsequent to the date in question and with reference
to events taking place subsequent to the date in question, the Board of
Directors of the Company or, to the extent permitted by applicable law, a
duly authorized committee thereof, whose determination shall be conclusive
and described in a resolution of the Board of Directors of the Company or
such duly authorized committee thereof, as the case may be, shall in good
faith estimate such fraction based on assumptions it deems reasonable
regarding such events taking place subsequent to the date in question, and
such estimated fraction shall be used for purposes of such adjustment
until such time as the actual fraction by which the Conversion Price is so
required to be adjusted as a result of such Other Event is determined),
and (3) if the "ex" date for the Current Event is on or prior to the date
in question, after taking into account any adjustment required pursuant to
clause (1) or (2) of this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value (as determined in good faith by the
Board of Directors of the Company or, to the extent permitted by
applicable law, a duly authorized committee thereof in a manner consistent
with any determination of such value for purposes of this Article Five,
whose determination shall be conclusive and described in a resolution of
the Board of Directors of the Company or such duly authorized committee
thereof, as the case may be) of the shares of capital stock,
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evidences of indebtedness or other assets being distributed applicable to
one share of Common Stock as of the close of business on the day before
such "ex" date. For purposes of this subparagraph (vii), the term "ex"
date, (1) when used with respect to any issuance, distribution or
Fundamental Change, means the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant market from which
the Closing Price was obtained without the right to receive such issuance,
such distribution or the cash, securities, property or other assets
distributable in such Fundamental Change to holders of the Common Stock,
(2) when used with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective and (3) when used with
respect to any tender or exchange offer means the first date on which the
Common Stock trades regular way on such exchange or in such market after
the Expiration Time of such offer.
(viii) No adjustment in the Conversion Price shall be required
pursuant to this Section 5.03(a) unless the adjustment would require a
change of at least 1% of such price; provided, however, that any
adjustments which by reason of this subparagraph (viii) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent
(with .005 being rounded upward) or to the nearest 1/100th of a share
(with .005 of a share being rounded upward), as the case may be.
Notwithstanding anything to the contrary in this Article Five, the Company
from time to time may, to the extent permitted by law, reduce the
Conversion Price by any amount for any period of at least 20 Business
Days, in which case the Company shall give at least 15 days' notice of
such reduction to the holders of Securities and the Trustee. In addition,
the Company may, at its option, make such reductions in the Conversion
Price in addition to those set forth in this Article Five, as it considers
to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons.
(ix) In any case in which this Article Five provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (A)
issuing to the holder of any Series ___% Debentures converted after such
record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such
holder any amount in cash in lieu of any fractional shares pursuant to
this Article Five.
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(x) For purposes of this Article Five, "Common Stock" includes any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and
which is not subject to redemption by the Company. However, subject to the
provisions of this Article Five, shares issuable on conversion of Series
___% Debentures shall include only shares of the class designated as the
Company Common Stock on the date of the initial issuance of Series ___%
Debentures by the Company or shares of any class or classes resulting from
any reclassification or reclassification thereof and which have no
preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
(b) Whenever the Conversion Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee and
the transfer agent for the Preferred Securities and the Series __%
Debentures; and
(ii) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable
be mailed by the Company to all record holders of Preferred Securities and
the Series __% Debentures at their last addresses as they appear upon the
stock transfer books of the Company and the Trust.
SECTION 5.04. (a) In the event that the Company shall be a party to any
transaction or series of transactions constituting a Fundamental Change,
including, without limitation, (i) any recapitalization or reclassification of
shares of Common Stock (other than a change in the par value or as a result of a
subdivision or combination of the Common Stock), (ii) any consolidation of the
Company with, or merger of the Company into, any other corporation or any merger
of another corporation into the Company as a result of which holders of Common
Stock shall be entitled to receive securities or other property or assets
(including cash) with respect to or in exchange for Common Stock (other than a
merger which does not result in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), (iii) any sale or transfer
of all or substantially all of the assets of the Company, or (iv) any compulsory
share exchange,
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pursuant to any of which the holders of Common Stock shall be entitled to
receive other securities, cash or other property, then appropriate provision
shall be made as part of the terms of such transaction or series of transactions
so that the holder of each Series ___% Debenture then outstanding shall have the
right thereafter to convert such Series ___% Debenture only into (A) if any such
transaction does not constitute a Common Stock Fundamental Change (as
hereinafter defined), the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock into which such Series ___%
Debenture might have been converted immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after, in the case of a Non-Stock Fundamental Change (as hereinafter defined),
giving effect to any adjustment in the Conversion Price required by the
provisions which follow in subparagraph (i) of Section 5.04(c), and (B) in the
case of a Common Stock Fundamental Change (as hereinafter defined), common stock
of the kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions which
follow in subparagraph (ii) of Section 5.04(c). The company formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires the Common Stock, as the case may be, shall enter into a
supplemental indenture with the Trustee, satisfactory in form to the Trustee,
the provisions of which provide for adjustments which, for events subsequent to
the effective date of such supplemental indenture, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article Five. The
above provisions shall similarly apply to successive recapitalization,
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article Five to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 5.04(c). In addition, in the
event of a Common Stock Fundamental Change, each shall be convertible solely
into common stock of the kind received by holders of Common Stock as the result
of such Common Stock Fundamental Change as more specifically provided below in
Section 5.04(c).
(c) For purposes of calculating any adjustment to be made pursuant to this
Article Five in the event of a Fundamental Change, immediately following such
Fundamental Change (and for such purposes a Fundamental Change shall be deemed
to occur on the earlier of (a) the occurrence of such Fundamental Change and (b)
the date, if any, fixed for determination of shareholders entitled to receive
the cash, securities, property or other assets distributable in such Fundamental
Change to holders of the Common Stock);
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price per share of Common Stock shall be the lower of (A) the Conversion
Price in
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effect immediately prior to such Non-Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to this Article
Five, and (B) the product of (1) the greater of the Applicable Price (as
hereinafter defined) or the then applicable Reference Market Price (as
hereinafter defined) and (2) a fraction the numerator of which shall be
$100 and the denominator of which shall be the amount set forth below
(based on the date on which such Non-Stock Fundamental Change occurs). For
the twelve month period beginning ____:
Year Denominator
---- -----------
1997 %
1998
1999
2000
2001
2002
2003
2004
2005
2006
and thereafter, 100.00;
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price per share of Common Stock shall be the Conversion Price
in effect immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other adjustments effected pursuant to this
Article Five, multiplied by a fraction, the numerator of which is the
Purchaser Stock Price (as hereinafter defined) and the denominator of
which is the Applicable Price; provided, however, that in the event of a
Common Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, paid with
respect to any fractional interests in such common stock resulting from
such Common Stock Fundamental Change) and (B) all of the Common Stock
shall have been exchanged for, converted into or acquired for common stock
(and cash, if any, with respect to fractional interests) of the successor,
acquiror or other third party, the Conversion Price per share of Common
Stock immediately following such Common Stock Fundamental Change shall be
the Conversion Price in effect immediately prior to such Common Stock
Fundamental Change divided by the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of one
share of Common Stock as a result of such Common Stock Fundamental Change.
(d) The following definitions shall apply to terms used in this Article
Five:
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(i) "Applicable Price" shall mean (A) in the event of a Non-Stock
Fundamental Change in which the holders of Common Stock receive only cash,
the amount of cash receivable by a holder of one share of Common Stock and
(B) in the event of any other Fundamental Change, the average of the
Closing Prices for one share of Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the holders
of Common Stock entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of Common Stock
shall have the right to receive such cash, securities, property or other
assets.
(ii) "Closing Price" with respect to any securities on any day shall
mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the New York Stock Exchange or,
if such security is not listed or admitted to trading on such Exchange, on
the principal national securities exchange or quotation system on which
such security is quoted or listed or admitted to trading or, if not quoted
or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the date in question as
reported by the National Quotation Bureau Incorporated, or a similarly
generally accepted reporting service or, if not so available, in such
manner as furnished by any New York Stock Exchange member firm selected
from time to time by the Board of Directors of the Company for that
purpose or a price determined in good faith by the Board of Directors of
the Company.
(iii) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors of the Company) of the consideration received by
the holders of Common Stock pursuant to such transactions consists of
shares of common stock that, for the ten consecutive Trading Days
immediately prior to such Fundamental Change, has been admitted for
listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the Nasdaq National Market;
provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless either (A) the Company continues to exist after
the occurrence of such Fundamental Change and the outstanding Series ___%
Debentures continue to exist as outstanding Series ___% Debentures, or (B)
the outstanding Series ___% Debentures continue to exist as Series ___%
Debentures and are convertible into common stock of the successor to the
Company.
(iv) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to which
all or substantially all of the Common Stock shall be exchanged for,
converted into, acquired for or
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constitutes solely the right to receive cash, securities, property or
other assets (whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); provided, however, in the case of a plan
involving more than one such transaction or event, for purposes of
adjustment of the Conversion Price, such Fundamental Change shall be
deemed to have occurred when substantially all of the Common Stock has
been exchanged for, converted into, or acquired for or constitutes solely
the right to receive cash, securities, property or other assets, but the
adjustment shall be based upon the consideration which the holders of
Common Stock received in such transaction or event as a result of which
more than 50% of the Common Stock shall have been exchanged for, converted
into, or acquired for or shall constitute solely the right to receive
cash, securities, property or other assets.
(v) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the Closing Prices for one share
of the common stock received by holders of Common Stock in such Common
Stock Fundamental Change during the ten Trading Days immediately prior to
the record date for the determination of the holders of Common Stock
entitled to receive such common stock or, if there is no such record date,
prior to the date upon which the holders of Common Stock shall have the
right to receive such common stock.
(vii) "Reference Market Price" shall initially mean $_____ (which is
an amount equal to 66-2/3% of the last reported sale price for the Common
Stock on the New York Stock Exchange on ______, 1997) and, in the event of
any adjustment to the Conversion Price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so
that the ratio of the Reference Market Price to the Conversion Price after
giving effect to any such adjustment shall always be the same as the ratio
of $____ to the initial Conversion Price set forth in this Article Five.
(e) In determining the amount and type of consideration received by a
holder of Common Stock in the event of a Fundamental Change, consideration
received by a holder of Common Stock pursuant to a statutory right of appraisal
will be disregarded.
SECTION 5.05. In case:
(i) the Company shall declare a dividend (or any other distribution)
on Common Stock that would cause an adjustment to the Conversion Price of
the Series ___% Debentures pursuant to the terms of any of the
subparagraphs above
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(including such an adjustment that would occur but for the terms of the
first sentence of Section 5.03(a)(viii) above); or
(ii) the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock or combined into a smaller
number of shares of Common Stock; or
(iii) the Company shall authorize the granting to the holders of
Common Stock generally of rights or warrants (for a period expiring within
45 days after the record date fixed for a distribution of such rights and
warrants) to subscribe for or purchase any shares of the Company's capital
stock or other capital stock of any class or of any other rights
(including any Rights Offerings); or
(iv) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company or a compulsory share exchange; or
(v) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall (i) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the stock transfer books of the Trust or
(ii) shall cause to be mailed to all Holders at their last addresses as they
shall appear in the books and records of the Trust, at least 15 days prior to
the applicable record or effective date hereinafter specified, a notice stating
(A) the date on which a record (if any) is to be taken for the purpose of such
dividend, distribution, rights or warrants or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined or (B) the
date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
SECTION 5.06. The Company shall reserve, free from pre-emptive rights, out
of its authorized but unissued shares, sufficient shares to provide for the
conversion of the Series ___% Debentures from time to time as such Series ___%
Debentures are presented
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for conversion, provided, that nothing contained herein shall be construed to
preclude the Company from satisfying its obligations in respect of the
conversion of Series ___% Debentures by delivery of repurchased shares of Common
Stock which are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Series ___% Debentures hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, provided, however, that nothing in
this Section 5.06 shall be deemed to affect in any way the obligations of the
Company to convert Series ___% Debentures into Common Stock as provided in this
Article Five.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Series ___% Debentures will upon issue be fully paid and
non-assessable by the Company and free of pre-emptive rights.
SECTION 5.07. Notwithstanding the foregoing provisions, the issuance of
any shares of Common Stock pursuant to any plan providing for the reinvestment
of dividends or interest payable on securities of the Company and the investment
of additional optional amounts in shares of Common Stock under any such plan,
and the issuance of any shares of Common Stock or options or rights to purchase
such shares pursuant to any employee benefit plan or program of the Company or
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of ______, 1997, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article Five.
SECTION 5.08. In case the Company shall, by dividend or otherwise, declare
or make a distribution on the Common Stock referred to in Section 5.03(a)(iv) or
5.03(a)(v) (including, without limitation, dividends or distributions referred
to in the last sentence of Section 5.03(a)(vi)), the Holder of the Series ___%
Debentures, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the
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Conversion Price adjustment in respect of such distribution, shall also be
entitled to receive for each share of Common Stock into which the Series ___%
Debentures are converted, the portion of the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock; provided, however, that, at
the election of the Company (whose election shall be evidenced by a resolution
of the Board of Directors) with respect to all Holders so converting, the
Company may, in lieu of distributing to such Holder any portion of such
distribution not consisting of cash or securities of the Company, pay such
Holder an amount in cash equal to the fair market value thereof (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors). If any conversion of
Series ___% Debentures described in the immediately preceding sentence occurs
prior to the payment date for a distribution to holders of Common Stock which
the Holder of Series ___% Debentures so converted is entitled to receive in
accordance with the immediately preceding sentence, the Company may elect (such
election to be evidenced by a resolution of the Board of Directors) to
distribute to such Holder a due xxxx for the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets to
which such Holder is so entitled, provided, that such due xxxx (a) meets any
applicable requirements of the principal national securities exchange or other
market on which the Common Stock is then traded and (b) requires payment or
delivery of such shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets no later than the date of
payment or delivery thereof to holders of shares of Common Stock receiving such
distribution.
ARTICLE SIX
Form of Series ____% Debentures
SECTION 6.01. The Series ____% Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[IF THE NOTE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture is a
Global Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
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Unless this Debenture is presented by an authorized representative to The
Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
No. $
CUSIP NO. ____________
THE AES CORPORATION
____% JUNIOR SUBORDINATED DEBENTURE
DUE 2027
The AES Corporation, a corporation duly organized and existing under the laws of
the State of Delaware (herein referred to as the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _____, or registered assigns, the
principal sum of _________ Dollars on ___________, 2027, and to pay interest on
said principal sum from ___________, 1997 or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears commencing ___________, 1997 at the rate of ____% per annum
plus Compounded Interest, if any, until the principal hereof shall have become
due and payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year twelve 30-day months. In the event that
any date on which interest is payable on this Debenture is not a business day,
then payment of interest payable on such date will be made on the next
succeeding day which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding business day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture (or one or more Predecessor
Debentures, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest
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installment, [which shall be the close of business on the day next preceding
such Interest Payment Date, provided if the Preferred Securities of AES Trust I
are no longer in book-entry only form, the regular record dates shall be the
close of business on the fifteenth (15th) day of each month next preceding such
Interest Payment Date] [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE
INDENTURE THE SERIES ____% DEBENTURES ARE NOT REPRESENTED BY A GLOBAL DEBENTURE
-- which shall be the close of business on the fifteenth (15th) day of each
month in which such Interest Payment Date occurs.] Any such interest installment
not punctually paid or duly provided for shall forthwith cease to be payable to
the registered holders on such regular record date, and may be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City and State of New York, in any coin or currency of the United
States of America which at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered holder at
such address as shall appear in the Debenture register and that the payment of
principal will only be made upon the surrender of this Debenture to the Trustee.
Notwithstanding the foregoing, so long as the owner and record holder of this
Debenture is the Property Trustee (as defined in the Indenture referred to on
the reverse hereof), the payment of the principal of (and premium, if any) and
interest (including Compounded Interest, if any) on this Debenture will be made
at such place and to such account of the Property Trustee as may be designated
by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, hereby waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon said
provisions.
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This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof, this Debenture shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be executed.
Dated ___________
The AES Corporation
By ____________________
Attest:
By ______________________
Secretary
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
The First Bank of Chicago _________________________
as Trustee or as Authentication Agent
By _______________________ By ______________________
Authorized Signatory Authorized Signatory
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(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of March __, 1997 duly executed and delivered between
the Company and The First National Bank of Chicago, a national banking
association, as Trustee (herein referred to as the "Trustee"), as supplemented
by the First Supplemental Indenture dated as of March __, 1997 between the
Company and the Trustee (said Indenture as so supplemented being hereinafter
referred to as the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures, and, to the extent
specifically set forth in the Indenture, the holders of Senior Indebtedness and
Preferred Securities. By the terms of the Indenture, the Debentures are issuable
in series which may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This series of Debentures is
designated the ____% Junior Subordinated Debentures due 2027 and is limited in
aggregate principal amount as specified in said First Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may not be
redeemed by the Company prior to ____________, 2000. The Company shall have the
right to redeem this Debenture at the option of the Company, without premium or
penalty, in whole or in part at any time on or after __________ __, 2000 (an
"Optional Redemption"), upon not less than 30 nor move than 60 days notice to
the Holder of the Series __% Debentures, at the following prices (as expressed
as percentages of the principal amount of the Debentures) (the "Optional
Redemption Price"), together with any accrued but unpaid interest, including any
Compounded Interest, if any, to, but including, the date of such redemption, if
redeemed during the 12-month period beginning _____:
Year Redemption Price
---- ----------------
2000 ___%
2001 ___%
2002 ___%
2003 ___%
2004 ___%
and 100% if redeemed on or after _____, 2005.
If the Series __% Debentures are redeemed on any Interest Payment Date,
accrued and unpaid interest shall be payable to Holders of record on the
relevant record date.
The Company may not redeem any Series __% Debentures unless all accrued
and unpaid interest thereon, including Compounded Interest, if any, has been
paid for all quarterly periods terminating on or prior to the date of notice of
redemption. So long as the corresponding Trust Securities are outstanding, the
proceeds from the redemption of the Series __% Debentures will be used to redeem
the Trust Securities.
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If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided if, at the time of
redemption, the Debentures are registered as a Global Debenture, the Depository
shall determine the principal amount of such Debentures held by each holder of
Debentures to be redeemed in accordance with its customary procedures.
If, at any time, a Tax Event (as defined below) shall occur or be
continuing after receipt of a Dissolution Tax Opinion (as defined below) and (i)
the Regular Trustees and the Company shall have received an opinion (a
"Redemption Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Series ____% Debentures for United States federal income tax
purposes even if the Series ____% Debentures were distributed to the holders of
Preferred Securities and Common Securities in liquidation of such holder's
interest in AES Trust I as set forth in the Declaration of Trust or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion (as defined below) cannot be delivered to AES Trust I, the
Company shall have the right at any time, upon not less than 30 nor more than 60
days' notice, to redeem the Series ____% Debentures in whole or in part for cash
at the Optional Redemption Price within 90 days following the occurrence of such
Tax Event; provided, however, that, if at the time there is available to the
Company or the Regular Trustees on behalf of AES Trust I the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
AES Trust I, the Company or the holders of the Preferred Securities, the Company
or the Regular Trustees on behalf of AES Trust I will pursue such measure in
lieu of redemption and provided further that the Company shall have no right to
redeem the Series ____% Debentures while the Regular Trustees on behalf of AES
Trust I are pursuing any such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel experienced
in such matters (a "Dissolution Tax Opinion") to the effect that on or after
_____________, 1997, as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application of
any such laws or regulations by any legislative body, court, governmental agency
or regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or
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announced or which action is taken, in each case on or after ______________,
1997, there is more than an insubstantial risk that (i) AES Trust I is, or will
be within 90 days of the date thereof, subject to United States federal income
tax with respect to income accrued or received on the Series ____% Debentures,
(ii) AES Trust I is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other governmental charges or
(iii) interest payable by the Company to AES Trust I on the Series ____%
Debentures is not, or within 90 days of the date thereof will not be, deductible
by the Company for United States federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue ruling of the Internal Revenue Service, to
the effect that the holders of the Preferred Securities will not recognize any
gain or loss for United States federal income tax purposes as a result of a
dissolution of AES Trust I and distribution of the Series ____% Debentures as
provided in the Declaration of Trust.
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption or as a result of a Tax Event as described above, the
Debentures will be redeemed pro rata or by lot or in some other equitable manner
determined by the Trustee. Notwithstanding the foregoing, if a partial
redemption of the Series ____% Debentures would result in the delisting of the
Preferred Securities by any national securities exchange or other organization
on which the Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and will only redeem the Series
____% Debentures in whole.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Debenture upon compliance by the Company with certain
conditions set forth therein.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture (and, in the case of any series of
Debentures held as trust assets of an AES Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders
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of the Preferred Securities and the Common Securities of such AES Trust) as may
be required under the Declaration of Trust of such AES Trust to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental indenture shall
(i) extend the fixed maturity of any Debentures of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Debenture (and, in the case of any series of Debentures held as trust
assets of a AES Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred Securities
and the Common Securities of such AES Trust as may be required under the
Declaration of Trust of such AES Trust) then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures of a series at the time outstanding
affected thereby (subject, in the case of any series of Debentures held as trust
assets of a AES Trust and with respect to which a Securities Exchange has not
theretofore occurred, to such consent of holders of Preferred Securities and
Common Securities of such AES Trust as may be required under the Declaration of
Trust of such AES Trust), on behalf of the Holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Debentures of
such series. Any such consent or waiver by the registered Holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
Debenture and of any Debenture issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
Subject to Section 13.12 of the Indenture, no reference herein to the
Indenture (other than such Section) and no provision of this Debenture or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and premium, if any, and interest on
this Debenture at the time and place at the rate and in the money herein
prescribed.
So long as the Company is not in default in the payment of interest on the
Debentures, the Company shall have the right, at any time during the term of the
Debentures, from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarterly interest periods (the "Extended
Interest Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate of
____% per annum to the extent
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permitted by applicable law, compounded quarterly ("Compounded Interest"));
provided that no Extended Interest Payment Period may extend beyond the date of
maturity or any redemption date of the Debentures. During such Extended Interest
Payment Period the Company shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect to,
any of its common stock or preferred stock, or make any guarantee payments with
respect thereto, provided that the foregoing will not apply to any stock
dividends, paid by the Company in Common Stock. Prior to the termination of any
such Extended Interest Payment Period, the Company may pay all or any portion of
the interest accrued on the Debentures on any Interest Payment Date to holders
of record on the regular record date for such Interest Payment Date or from time
to time further extend such Extended Interest Payment Period, provided that such
Period together with all such further extensions thereof shall not exceed 20
consecutive quarterly interest periods. At the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and unpaid interest
then due, together with Compounded Interest, the Company may select a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest on this Debenture shall be due and payable during an Extended Interest
Payment Period, except at the end thereof. At the end of the Extended Interest
Payment Period the Company shall pay all interest accrued and unpaid on the
Series ____% Debentures including any Compounded Interest which shall be payable
to the holders of the Series ____% Debentures in whose names the Series ____%
Debentures are registered in the Debenture register on the first record date
after the end of the Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on the
Debenture register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company in the Borough
of Manhattan, The City and State of New York accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company or the Trustee
duly executed by the registered holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and any Debenture Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Debenture Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
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No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Holder of any Debenture has the right, exercisable at any time through
the close of business (New York time) on _______, 20__ (or, in the case of a
Debenture called for redemption, prior to the close of business on the Business
Day prior to the corresponding redemption date), to convert the principal amount
thereof (or any portion thereof that is an integral multiple of $__) into shares
of Common Stock at the initial conversion rate of ______ shares of Common Stock
for each Debenture (equivalent to a Conversion Price of $__ per share of Common
Stock), subject to adjustment under certain circumstances.
To convert a Debenture, a Holder must (a) complete and sign a conversion
notice substantially in the form attached hereto, (b) surrender the Debenture to
a Conversion Agent, (c) furnish appropriate endorsements or transfer documents
if required by the Conversion Agent and (d) pay any transfer or similar tax, if
required. If a Debenture is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before the
opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in whose name the Debenture is
registered at the close of business on such record date, and (other than a
Debenture or a portion of a Debenture called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Debenture must be accompanied by
payment of an amount equal to the Distribution payable on such Distribution
payment date. The number of shares issuable upon conversion of a Debenture is
determined by dividing the principal amount of the Debenture converted by the
Conversion Price in effect on the Conversion Date. No fractional shares will be
issued upon conversion but a cash adjustment will be made for any fractional
interest. The outstanding principal amount of any Debenture shall be reduced by
the portion of the principal amount thereof converted into shares of Common
Stock.
[If certificated Debentures -- The Debentures of this series are issuable
only in registered form without coupons in denominations of $__ and any integral
multiple thereto.] [If Global Debenture -- This Global Debenture is exchangeable
for Debentures in definitive form under certain limited circumstances set forth
in the Indenture. Debentures of this series so issued are issuable only in
registered form without coupons in denominations of $__ or any integral multiple
thereof.] As provided in the Indenture and
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subject to certain limitations [If Global Debenture -- herein and] therein set
forth, Debentures of this series [If Global Debenture -- so issued] are
exchangeable for a like aggregate principal amount of Debentures of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: The AES Corporation
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion below designated,
into Common Stock of THE AES CORPORATION, in accordance with the terms of the
Indenture referred to in this Debenture, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Date: _____________, ___
in whole Portions of Debenture to be converted ($__ or integral
multiples thereof):
$_____________
____________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
____________________________
____________________________
____________________________
Signature Guarantee:* _________
----------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership of participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934, as
amended.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________ _________________________________
________________________________________________________________________________
___________________________________________________ agent to transfer this
Debenture on the books of the Trust. The agent may substitute another to act
for him or her.
Date:_______________________________________
Signature:__________________________________
(Sign exactly as your name appears on the other side of this Debenture)
Signature Guarantee*:_________________________________________________
----------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership of participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934, as
amended.
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ARTICLE SEVEN
Original Issue of Series ____% Debentures
SECTION 7.01. Except as provided in Section 1.01 and this Section 7.01,
Series ____% Debentures in the aggregate principal amount equal to $____________
may, upon execution of this First Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Debentures to or
upon the written order of the Company, signed by its Chairman, its President, or
any Vice President and its Treasurer or an Assistant Treasurer, without any
further action by the Company. Upon exercise of the overallotment option set
forth in the Underwriting Agreement, additional Series ____% Debentures in the
aggregate principal amount of up to $______________ may be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Series ____%
Debentures executed as aforesaid by the Company, to or upon the written order of
the Company, which order shall be accompanied by evidence satisfactory to the
Trustee that the overallotment option has been exercised.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this First
Supplemental Indenture or in the form of Series ____% Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
said form of Series ____% Debenture that are defined in the Indenture shall have
the several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed. This First Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the Company and
not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.
SECTION 8.04. This First Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
The AES Corporation
By ____________________
Name:
Title:
Attest:
______________________
Name:
Title:
The First National Bank of Chicago
as Trustee
By ____________________
Name:
Title:
Attest:
______________________
Name:
Title:
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK ) __________, 1997
On the ______ day of ________, in the year one thousand nine hundred
ninety-seven, before me personally came __________________ to me known, who,
being by me duly sworn, did depose and say that he resides at ________________
________________________________; that he is ___________________________ of THE
AES CORPORATION, one of the corporations described in and which executed the
above instrument; that he knows the corporate seal of said corporation; that the
seal affixed to the said instrument is such corporation seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
_______________________
NOTARY PUBLIC
My Commission Expires
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK ) ____________, 1997
On the ______ day of __________, in the year one thousand nine hundred
ninety-seven before me personally came ______________________ to me known, who,
being by me duly sworn, did depose and say that he resides at
________________________ that he is a ____________ of The First National Bank of
Chicago , one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation and that he signed his
name thereto by like authority.
_______________________
NOTARY PUBLIC
My Commission Expires
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