Exhibit 4.2
SOUTHERN ENERGY, INC.
TO
BANKERS TRUST COMPANY,
TRUSTEE.
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER 2, 2000
$355,670,150
6-1/4% JUNIOR CONVERTIBLE SUBORDINATED NOTES, SERIES A
DUE 2030
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TABLE OF CONTENTS1
PAGE
ARTICLE 1.....................................................1
SECTION 101. Establishment....................................1
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SECTION 102. Definitions......................................2
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SECTION 103. Payment of Principal and Interest................6
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SECTION 104. Deferral of Interest Payments....................7
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SECTION 105. Denominations....................................8
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SECTION 106. Global Securities................................8
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SECTION 107. Transfer.........................................9
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SECTION 108. Redemption.......................................9
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SECTION 109. Exchange of Trust Securities for Series A
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Notes...........................................10
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SECTION 110. Event of Default................................10
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SECTION 111. Amendment of this Indenture.....................11
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ARTICLE 2....................................................11
SECTION 201. Conversion Rights...............................11
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SECTION 202. Cash Settlement.................................11
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SECTION 203. Conversion Procedures...........................12
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SECTION 204. Expiration of Conversion Rights.................14
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SECTION 205. Conversion Price Adjustments....................14
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SECTION 206. Fundamental Change..............................19
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SECTION 207 Notice of Adjustments of Conversion Price........20
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SECTION 208. Prior Notice of Certain Events..................21
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SECTION 209. Certain Additional Rights.......................22
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SECTION 210. Restrictions on Company Common Stock
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Issuable Upon Conversion........................22
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SECTION 211. Trustee Not Responsible for Determining
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Conversion Price or Adjustments.................23
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ARTICLE 3....................................................23
SECTION 301. Recitals by Company.............................23
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SECTION 302. Ratification and Incorporation of
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Original Indenture..............................23
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SECTION 303. Executed in Counterparts........................23
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SECTION 304. Listing of Series A Notes.......................24
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1This Table of Contents does not constitute part of the Indenture or
have any bearing upon the interpretation of any of its terms and provisions.
THIS FIRST SUPPLEMENTAL INDENTURE is made as of the 2ND day of October,
2000, by and between SOUTHERN ENERGY, INC., a Delaware corporation, 900 Ashwood
Parkway, Suite 500, Atlanta, Georgia 30338 (the "Company"), and BANKERS TRUST
COMPANY, a New York banking corporation, Four Albany Street, New York, New York
10006 (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a Subordinated Note
Indenture, dated as of October 1, 2000 (the "Original Indenture") with Bankers
Trust Company;
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by this First Supplemental
Indenture, is herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of Junior
Subordinated Notes may at any time be established by the Board of Directors of
the Company in accordance with the provisions of the Original Indenture and the
terms of such series may be described by a supplemental indenture executed by
the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a new
series of Junior Subordinated Notes;
WHEREAS, additional Junior Subordinated Notes of other series hereafter
established, except as may be limited in the Original Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution, delivery
and recording of this First Supplemental Indenture and to make it a valid and
binding obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Junior Convertible Subordinated Notes, Series A
SECTION 101. Establishment. There is hereby established a new series of
Junior Subordinated Notes to be issued under the Indenture, to be designated as
the Company's 6 1/4% Junior Convertible Subordinated Notes, Series A due 2030
(the "Series A Notes").
The aggregate principal amount of Series A Notes that may be
authenticated and delivered under this Indenture is limited to $355,670,150, and
no further Series A Notes shall be authenticated and delivered except as
provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The
Series A Notes shall be issued in definitive fully registered form. The Series A
Notes will be purchased from the Company by SEI Trust I, a Delaware business
trust (the "Trust"), with proceeds from the issuance and sale by the Trust of
preferred undivided beneficial interests in the Trust (the "Preferred
Securities") and common undivided beneficial interests in the Trust (the "Common
Securities", and collectively with the Preferred Securities, the "Trust
Securities").
The Series A Notes shall be in substantially the form set out in
Exhibit A hereto. The entire principal amount of the Series A Notes shall
initially be evidenced by one certificate issued to the Property Trustee of the
Trust.
The form of the Trustee's Certificate of Authentication for the Series
A Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series A Note shall be dated the date of authentication thereof
and shall bear interest from the Original Issue Date or from the most recent
Interest Payment Date to which interest has been paid or duly provided for.
SECTION 102. Definitions. The following defined terms used herein
shall, unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture.
"Applicable Price" means:
(i) in the case of a Non-Stock Fundamental Change in which the
holders of Company Common Stock receive only cash, the amount
of cash received by the holder of one share of Company Common
Stock and
(ii) in the event of any other Non-Stock Fundamental Change or any
Common Stock Fundamental Change, the average of the Closing
Prices (as defined below) for Company Common Stock during the
ten consecutive Trading Days prior to and including the record
date for the determination of the holders of Company Common
Stock entitled to receive those securities, cash or other
property in connection with that Non-Stock Fundamental Change
or Common Stock Fundamental Change or, if there is no record
date, the date that the holders of Company Common Stock will
have the right to receive those securities, cash or other
property (that record date or distribution date being
hereinafter referred to as the "Entitlement Date"), in each
case as adjusted in good faith by the Company to appropriately
reflect any of the events referred to under Section 205
herein.
"Closing Price" means, on any day, the last reported sale price on that
day or, if no sales take place on that day, the average of the reported closing
bid and asked prices on that day, in either case as reported on the New York
Stock Exchange Consolidated Transactions Tape, or, if the stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such stock is listed or admitted to trading or, if
not listed or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices as furnished by any New York Stock
Exchange member firm, selected by the Company for that purpose.
"Common Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value, as determined in good faith by the Board of
Directors, of the consideration received by holders of Company Common Stock
consists of common stock that for each of the ten consecutive Trading Days prior
to the Entitlement Date 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 will not be
a Common Stock Fundamental Change unless either:
o the Company continues to exist after the occurrence of that
Fundamental Change and the outstanding Preferred Securities
continue to exist as outstanding Preferred Securities or
o not later than the occurrence of that Fundamental Change, the
outstanding Preferred Securities are converted into or
exchanged for shares of convertible preferred stock of any
entity succeeding to the business of the Company or a
subsidiary of the Company, which convertible preferred stock
has powers, preferences and relative participating, optional
or other rights and qualifications, limitations and
restrictions substantially similar to those of the Preferred
Securities.
"Company Common Stock" means common stock, par value $.01 per share, of
the Company.
"Conversion Agent" has the meaning specified in Section 203.
"Conversion Date" has the meaning specified in Section 203.
"Conversion Price" has the meaning specified in Section 201.
"Current Market Price" means, for any day, the last reported sale
price, regular way, on such day of Company Common Stock, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the New York Stock Exchange
Consolidated Transactions Tape, or, if Company Common Stock is not listed or
admitted to trading on the New York Stock Exchange on such day, on the principal
national securities exchange on which Company Common Stock is listed or admitted
to trading, if Company Common Stock is listed on a national securities exchange,
or the Nasdaq National Market, or, if Company Common Stock is not quoted or
admitted to trading on such quotation system, on the principal quotation system
on which the Company Common Stock may be listed or admitted to trading or
quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of Company Common Stock in the over-the-counter market on the day
in question as reported by the National Quotation Bureau Incorporated, or a
similar 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 for that purpose or, if not so available
in such manner, as otherwise determined in good faith by the Board of Directors.
"Deferred Interest" means each installment of interest not paid during
any Extension Period, and interest thereon. Deferred installments of interest
shall bear interest at the rate of 6 1/4% per annum from the applicable Interest
Payment Date to the date of payment, compounded quarterly.
"Expiration Time" has the meaning specified in Section 205(e).
"Extension Period" means any period during which the Company has
elected to defer payments of interest, which deferral may be for a period of up
to twenty (20) consecutive quarters.
"Fundamental Change" means the occurrence of any transaction or event
in connection with a plan pursuant to which all or substantially all of Company
Common Stock will be exchanged for, converted into, acquired for or constitute
solely the right to receive securities, cash or other property (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise). In the case of a
plan involving more than one of these transactions or events, however, for
purposes of adjustment of the Conversion Price, the Fundamental Change will be
deemed to have occurred when substantially all Company Common Stock is exchanged
for, converted into or acquired for or constitute solely the right to receive
securities, cash or other property, but the adjustment will be based upon the
consideration that a holder of Company Common Stock received in that transaction
or event as a result of which more than 50% of Company Common Stock will have
been exchanged for, converted into or acquired for or constitute solely the
right to receive securities, cash or other property.
"Interest Payment Dates" means January 1, April 1, July 1 and October 1
of each year.
"Investment Company Act Event" means that the Company shall have
received an Opinion of Counsel to the effect that, as a result of the occurrence
of a change (including prospective change) in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended, which change becomes effective on or after the Original Issue
Date.
"Non-Stock Fundamental Change" means any Fundamental Change other than
a Common Stock Fundamental Change.
"Notice of Conversion" means the notice given by a holder of Preferred
Securities to the Conversion Agent to exchange such Preferred Securities for
Series A Notes and to convert such Series A Notes into Company Common Stock on
behalf of such holder.
"Original Issue Date" means October 2, 2000.
"Preferred Securities" has the meaning specified in Section 401.
"Purchased Shares" has the meaning specified in Section 205(e).
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in that Common Stock Fundamental Change for the ten consecutive Trading
Days prior to and including the Entitlement Date, as adjusted in good faith by
the Company to approximately reflect any of the events referred to in Section
205 herein.
"Reference Date" has the meaning specified in Section 205(c).
"Reference Market Price" initially means $14.67 (which is an amount
equal to 66-2/3% of the initial public offering price of Company Common Stock).
In the event of any adjustment of the applicable Conversion Price, other than as
a result of a Non-Stock Fundamental Change, the Reference Market Price will also
be adjusted so that the ratio of the Reference Market Price to the Conversion
Price after giving effect to any adjustment will always be the same as the ratio
of the initial Reference Market Price to the initial Conversion Price of the
Preferred Securities.
"Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day next preceding such
Interest Payment Date.
"Rights" has the meaning specified in Section 203(f).
"Rights Agreement" has the meaning specified in Section 203(f).
"Special Event" means an Investment Company Act Event or Tax Event.
"Spin-Off" means the distribution by The Southern Company of all of its
shares of Company Common Stock to the holders of its common stock.
"Stated Maturity" means October 1, 2030.
"Tax Event" means that the Company shall have received an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, 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 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 by any
legislative body, court, governmental agency or regulatory authority that
provides for a position with respect to such laws or regulations that differs
from its previous position or a commonly accepted position; or (d) any action
taken by any governmental agency or regulatory authority, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
of the Opinion of Counsel, subject to United States federal income tax with
respect to income accrued or received on the Series A Notes, (ii) interest
payable by the Company on the Series A Notes is not, or will not be within 90
days of the date of the Opinion of Counsel, deductible by the Company for United
States federal income tax purposes, (iii) the timing of the deduction for
interest payable by the Company on the Series A Notes is, or will be within 90
days of the date of the Opinion of Counsel, required to be made by reference to
a system that defers the timing of such deductions compared to the timing
permitted under the principles of economic accrual; or (iv) the Trust would be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges, which change or amendment becomes effective on or after
the Original Issue Date.
"Trading Day" means (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national security
exchange, a day on which the New York Stock Exchange or another national
security exchange is open for business, or (y) if the applicable security is
quoted on the Nasdaq National Market, a day on which trades may be made thereon
or (z) if the applicable security is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"Transaction" has the meaning specified in Section 206(a).
"Trust" means SEI Trust I, a statutory business trust formed by the
Company under Delaware law to issue Trust Securities, the proceeds of which will
be used to purchase Series A Notes.
"Underwriters" means the underwriters named in the Underwriting
Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated
September 26, 2000, among the Trust, the Company and the Underwriters.
SECTION 103. Payment of Principal and Interest. The unpaid principal
amount of the Series A Notes shall bear interest at the rate of 6 1/4% per annum
until paid or duly provided for. Interest shall be paid quarterly in arrears on
each Interest Payment Date to the Person in whose name the Series A Notes are
registered on the Regular Record Date for such Interest Payment Date, provided
that interest payable at Maturity of principal or on a Redemption Date as
provided herein will be paid to the Person to whom principal is payable. So long
as an Extension Period is not occurring, any such interest that is not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holders on such Regular Record Date and may either be paid to the Person or
Persons in whose name the Series A Notes are registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed
by the Trustee ("Special Record Date"), notice whereof shall be given to Holders
of the Series A Notes not less than ten (10) days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange, if any, on which the Series A Notes
shall be listed, and upon such notice as may be required by any such exchange,
all as more fully provided in the Original Indenture.
Payments of interest on the Series A Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series A Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. If the amount of interest is calculated
for any period shorter than a full quarterly interest period, it will be
computed on the basis of the number of days elapsed on a 360-day year. In the
event that any date on which interest is payable on the Series A Notes is not a
Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day that is a Business Day without any interest or other
payment resulting from such delay, with the same force and effect as if made on
the date the payment was originally payable.
If a Tax Event occurs, then the Company has the right (i) prior to the
dissolution of the Trust, to shorten the Stated Maturity of the Series A Notes
to the minimum extent required, but not earlier than October 2, 2015, or (ii) to
direct the Property Trustee to dissolve the Trust (if not previously dissolved)
and shorten the Stated Maturity of the Series A Notes to the minimum extent
required, but not earlier than October 2, 2015, in each case such that in the
Opinion of Counsel experienced in such matters, after shortening the Stated
Maturity, interest paid on the Series A Notes will be deductible by the Company
for federal income tax purposes.
Payment of the principal and interest (including Additional Interest,
if any) due at Maturity or earlier redemption of the Series A Notes shall be
made upon surrender of the Series A Notes at the Corporate Trust Office of the
Trustee, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. Payments of
interest (including interest on any Interest Payment Date) will be made, subject
to such surrender where applicable, at the option of the Company, (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer at such place and to
such account at a banking institution in the United States as may be designated
in writing to the Trustee at least sixteen (16) days prior to the date for
payment by the Person entitled thereto.
The Company shall pay, as Additional Interest on the Series A Notes,
when due to the United States or any other taxing authority, the amounts set
forth in clause (i) of the definition of Additional Interest.
SECTION 104. Deferral of Interest Payments. So long as no Event of
Default has occurred and is continuing, the Company has the right at any time
and from time to time to extend the interest payment period of the Series A
Notes for up to twenty (20) consecutive quarters (each, an "Extension Period"),
but not beyond the Stated Maturity. Notwithstanding the foregoing, the Company
has no right to extend its obligation to pay such amounts as are defined in
clause (i) of the definition of Additional Interest. Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period, provided that such Extension Period, together with all such previous and
further extensions of that Extension Period, shall not exceed twenty (20)
consecutive quarters. Upon the termination of any such Extension Period and upon
the payment of all accrued and unpaid interest and any Additional Interest then
due, the Company may select a new Extension Period, subject to the above
limitations and requirements.
Upon the termination of any Extension Period, which termination shall
be on an Interest Payment Date, the Company shall pay all Deferred Interest to
the Person in whose name the Series A Notes are registered on the Regular Record
Date for such Interest Payment Date, provided that Deferred Interest payable at
Maturity or on any Redemption Date will be paid to the Person to whom principal
is payable.
The Company shall give the Trustee, the Property Trustee and the
Administrative Trustees notice of its selection or extension of an Extension
Period at least one Business Day prior to the earlier of (i) the Regular Record
Date relating to the Interest Payment Date on which the Extension Period is to
commence or relating to the Interest Payment Date on which an Extension Period
that is being extended would otherwise terminate, or (ii) the date the Property
Trustee (or if no Preferred Securities are outstanding, the Trustee) is required
to give notice to the New York Stock Exchange or other applicable
self-regulatory organization of the record date or the date distributions are
payable.
The Trustee shall promptly give notice of the Company's selection of an
Extension Period to Holders of Outstanding Series A Notes and holders of
Preferred Securities.
At any time any of the foregoing notices are given to the Trustee, the
Company shall give to the Paying Agent for the Series A Notes such information
as said Paying Agent shall reasonably require in order to fulfill its tax
reporting obligations with respect to such Series A Notes.
SECTION 105. Denominations. The Series A Notes may be issued in
denominations of $50, or any integral multiple thereof.
SECTION 106. Global Securities. If the Series A Notes are distributed
to Holders of the Trust Securities of the Trust in liquidation of such Holders'
interests therein, the Series A Notes will be issued in the form of one or more
Global Securities registered in the name of the Depositary (which shall be The
Depository Trust Company) or its nominee. Except under the limited circumstances
described below, Series A Notes represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Series A Notes in
definitive form. The Global Securities described above may not be transferred
except 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 or to a
successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series A Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.
A Global Security shall be exchangeable for Series A Notes registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security and no successor Depositary shall have been
appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, at a time when
the Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed, (ii) the Company in its sole
discretion determines that such Global Security shall be so exchangeable, or
(iii) there shall have occurred an Event of Default with respect to the Series A
Notes. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Series A Notes registered in such names as
the Depositary shall direct.
SECTION 107. Transfer. No service charge will be made for any transfer
or exchange of Series A Notes, but payment will be required of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.
The Company shall not be required (a) to issue, transfer or exchange
any Series A Notes during a period beginning at the opening of business fifteen
(15) days before the day of the mailing of a notice identifying the serial
numbers of the Series A Notes to be called for redemption, and ending at the
close of business on the day of the mailing, or (b) to transfer or exchange any
Series A Notes theretofore selected for redemption in whole or in part, except
the unredeemed portion of any Series A Note redeemed in part.
SECTION 108. Redemption. The Series A Notes shall be subject to
redemption at the option of the Company, in whole or in part, at any time or
from time to time on or after October 1, 2003; provided, however, that the
Series A Notes may only be redeemed if the Closing Price of the Company Common
Stock exceeds 125% of the Conversion Price for at least 20 Trading Days within a
period of 30 consecutive Trading Days ending within five Trading Days of the
date of the notice of redemption. If a redemption in part shall result in the
delisting of the Preferred Securities issued by the Trust, the Company may only
redeem the Series A Notes in whole. The Series A Notes shall also be subject to
redemption at any time in whole, but not in part, upon the occurrence of a
Special Event.
"Redemption Price," in the case of a redemption, in whole or in part,
at the option of the Company, but not upon the occurrence of a Special Event,
shall equal the following prices expressed in percentages of the principal
amount together with accrued interest to but excluding the date fixed for
redemption if redeemed during the 12-month period beginning October 1:
Year Redemption Price
2003......................................................104.375%
2004......................................................103.750%
2005......................................................103.125%
2006......................................................102.500%
2007......................................................101.875%
2008......................................................101.250%
2009......................................................100.625%
2010 and thereafter.......................................100.000%
.........Upon the occurrence of a Special Event at any time, the Company may,
within ninety (90) days following the occurrence thereof and subject to the
terms and conditions of the Indenture, elect to redeem the Series A Notes, in
whole.
........."Redemption Price," in the case of a redemption following a Special
Event, means for each Series A Note a price equal to 100% of the principal
amount of the Series A Notes being redeemed, plus accrued and unpaid interest to
the date fixed for redemption.
.........In the case of a Tax Event that shall have occurred and be continuing,
the Company may elect to pay any Additional Interest such that the amounts to be
received by holders of the Trust Securities are not reduced as a result of such
Tax Event.
.........In the event of redemption of the Series A Notes in part only, a new
Series A Note or Notes for the unredeemed portion will be issued in the name or
names of the Holders thereof upon the surrender thereof.
.........The Series A Notes will not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.
Any redemption of less than all of the Series A Notes shall, with
respect to the principal thereof, be divisible by $50.
.........Upon (i) repayment at maturity or (ii) as a result of acceleration upon
the occurrence and continuation of an Event of Default, the Company shall redeem
the Outstanding Series A Notes, in whole but not in part, at a redemption price
equal to 100% of the principal amount of such Series A Notes plus any accrued
and unpaid interest, including any Additional Interest, to the date fixed for
redemption.
SECTION 109. Exchange of Trust Securities for Series A Notes. At any
time, the Company shall have the right to dissolve the Trust and cause the
Series A Notes to be distributed to the holders of the Trust Securities in
exchange for the Preferred Securities in dissolution of the Trust after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law.
SECTION 110. Event of Default. In addition to the Events of Default set
forth in Section 501 of the Original Indenture, the failure by the Company to
issue Company Common Stock upon an appropriate election by the Holder or Holders
of the Series A Notes to convert the Series A Notes into shares of Company
Common Stock shall be an Event of Default with respect to the Series A Notes.
SECTION 111. Amendment of this Indenture. Without the consent of the
Holders of each Outstanding Series A Note affected thereby, no amendment or
supplement to this Indenture may adversely affect any right to convert or
exchange any Series A Note.
SECTION 112. Defeasance and Discharge. Notwithstanding Section 403 of
the Original Indenture, the Series A Notes will not be subject to defeasance or
discharge.
ARTICLE 2
Conversion of Series A Notes
SECTION 201. Conversion Rights . Subject to and upon compliance with
the provisions of this Article and subject to the Company's right to elect cash
settlement as set forth below, the Series A Notes are convertible, at the option
of the Holder, at any time on or after October 2, 2001 and prior to the close of
business on the Business Day prior to the redemption or Stated Maturity, into
fully paid and nonassessable shares of Company Common Stock at an initial
conversion rate of 1.8182 shares of Company Common Stock for each $50 in
aggregate principal amount of Series A Notes (equal to a conversion price of
approximately $27.50 per share of Company Common Stock), subject to adjustment
as described in this Article 2 (as adjusted, the "Conversion Price"). A Holder
of a Series A Note may convert any portion thereof that is called for redemption
into that number of fully paid and nonassessable shares of Company Common Stock
(calculated as to each conversion to the nearest 1/100th of a share) obtained by
dividing the principal amount of the Series A Note to be converted by the
Conversion Price. In case a Series A Note or portion thereof is called for
redemption, such conversion right in respect of a Series A Note or portion so
called shall expire at the close of business on the Business Day prior to the
Redemption Date, unless the Company defaults in making the payment due upon
redemption.
SECTION 202. Cash Settlement . At any time after October 2, 2001 and
prior to the Spin-Off, the Company may elect to make a cash settlement in
respect of any Series A Note surrendered for conversion by delivering notice
thereof to the tendering Holder not more than five Trading Days after such
Series A Note is surrendered for conversion. Such cash settlement shall be in an
amount, per $50 principal amount of Series A Notes delivered for conversion,
equal to the product of (i) the then-prevailing Conversion Price and (ii) the
average of the Closing Price of the Company Common Stock on the five Trading
Days commencing two Trading Days after delivery by the Company of such notice to
such Holder. The Company will pay such amount as promptly as practicable after
the completion of such five Trading Day period.
SECTION 203. Conversion Procedures .
(a)......In order to convert all or a portion of the Series A Notes
into Company Common Stock or cash, as the case may be, the Holder thereof shall
deliver to the Property Trustee, as conversion agent or to such other agent
appointed for such purposes (the "Conversion Agent"), an irrevocable Notice of
Conversion setting forth the principal amount of Series A Notes to be converted,
together with the name or names, if other than the Holder, in which the shares
of Company Common Stock or cash, as the case may be, should be issued upon
conversion and, if such Series A Notes are definitive Series A Notes, surrender
to the Conversion Agent the Series A Notes 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 Trust Agreement to convert such
Preferred Securities into Company Common Stock or cash, as the case may be, 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 (i) to exchange such Preferred Securities for a portion of the
Series A Notes held by the Trust (at an exchange rate of $50 principal amount of
Series A Notes for each Preferred Security) and (ii) to immediately (unless the
Spin-Off has not yet occurred, in which case within the time specified in
Section 202) convert such Series A Notes, on behalf of such holder, into Company
Common Stock or cash, as the case may be, pursuant to this Article 2 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 A
Notes except pursuant to a Notice of Conversion delivered to the Conversion
Agent by a holder of Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular Record
Date and prior to the subsequent Interest Payment Date, the Holder of record on
the Regular Record Date will be entitled to receive the interest paid on the
subsequent Interest Payment Date on the portion of Series A Notes to be
converted notwithstanding the conversion thereof prior to such Interest Payment
Date. Except as otherwise provided in the immediately preceding sentence, in the
case of any Series A Note that is converted, interest whose Interest Payment
Date is on or after the date of conversion of such Series A Note 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 A Notes being converted, which shall be deemed to be paid in full.
Series A Notes submitted for conversion prior to the expiration of conversion
rights as provided in Section 204 shall be deemed to have been converted
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 Trust Agreement, as the case
may be. The Person or Persons entitled to receive Company Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such Company Common Stock as of the Conversion Date and such Person
or Persons will cease to be a record Holder or record Holders of the Series A
Notes on that 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 or holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Company 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 Company Common Stock into which the Series A Notes are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at the
Stated Maturity of the portion of Series A Notes so converted and any unpaid
interest (including Additional Interest) accrued on such Series A Notes at the
time of such conversion.
(c)......No fractional shares of Company 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 Current Market Price with respect to such fractional interest on the date on
which the Series A Notes or Preferred Securities, as the case may be, were duly
surrendered to the Conversion Agent for conversion, and the Conversion Agent in
turn will make such payment, if any, to the Holder of the Series A Notes or the
holder of the Preferred Securities so converted.
(d)......In the event of the conversion of any Series A Note in part
only, a new Series A Note or Series A Notes for the unconverted portion thereof
will be issued in the name of the Holder thereof upon the cancellation of the
Series A Note converted in part in accordance with Section 307 of the Original
Indenture.
(e)......In effecting the conversion transaction described in this
Section, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Series A Notes) and as
agent of the Holders of Series A Notes (in the conversion of Series A Notes into
Company Common Stock), as the case may be, directing it to effect such
conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Series A Notes 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 2 and (ii) to convert all or a portion of the
Series A Notes into Company Common Stock and thereupon to deliver such shares of
Company Common Stock in accordance with the provisions of this Article 2 and to
deliver to the Trust a new Series A Note or Series A Notes for any resulting
unconverted principal amount.
(f)......The Company shall at all times reserve and keep available out
of its authorized and unissued Company Common Stock, solely for issuance upon
the conversion of the Series A Notes, such number of shares of Company Common
Stock as shall from time to time be issuable upon the conversion of all the
Series A Notes then outstanding. Notwithstanding the foregoing, the Company
shall be entitled to deliver upon conversion of Series A Notes shares of Company
Common Stock reacquired and held in the treasury of the Company (in lieu of the
issuance of authorized and unissued shares of Company Common Stock) so long as
any such treasury shares are free and clear of all liens, charges, security
interests or encumbrances. Whenever the Company issues shares of Company Common
Stock upon conversion of Series A Notes, and the Company has in effect at such
time a stock purchase rights agreement ("Rights Agreement") under which holders
of Company Common Stock are issued rights ("Rights") entitling the holders under
certain circumstances to purchase an additional share or shares of stock, the
Company will issue, together with each such share of Company Common Stock, such
number of Rights (which number may be a fraction) as shall at that time be
issuable with a share of Company Common Stock pursuant to such Rights Agreement.
Any shares of Company Common Stock issued upon conversion of the Series A Notes
shall be duly authorized, validly issued and fully paid and nonassessable. The
Conversion Agent shall deliver the shares of Company Common Stock received upon
conversion of the Series A Notes to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for United States
withholding taxes. The Company shall use its reasonable best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all applicable
requirements as to registration or qualification of Company Common Stock (and
all requirements to list Company Common Stock issuable upon conversion of Series
A Notes that are at the time applicable), in order to enable the Company to
lawfully issue Company Common Stock upon conversion of Series A Notes and to
lawfully deliver Company Common stock to each Holder upon conversion of the
Series A Notes.
(g)......The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Company Common Stock on conversion
of Series A Notes. The Company shall not, however, be required to pay any tax
that may be payable in respect of any transfer involved in the issue and
delivery of shares of Company Common Stock in a name other than that in which
the Series A Notes so converted were registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Conversion Agent the amount of any such tax, or has established to the
satisfaction of the Conversion Agent that such tax has been paid.
(h)......Nothing in this Article 2 shall limit the requirement of the
Company to withhold taxes pursuant to the terms of the Series A Notes or as set
forth in this Indenture or otherwise require the Trustee or the Company to pay
any amounts on account of such withholdings.
SECTION 204. Expiration of Conversion Rights . The conversion rights of
Holders of Series A Notes shall expire either (i) in the case of Series A Notes
called for redemption, at the close of business on the Business Day prior to the
date set for redemption of the Series A Notes or (ii) at the close of business
on the Business Day prior to the Stated Maturity of the Series A Notes.
SECTION 205. Conversion Price Adjustments . The conversion price shall
be subject to adjustment (without duplication) from time to time as follows:
(a) In case the Company shall, while any of the Series A Notes
are Outstanding, (i) pay a dividend or make a distribution with respect
to its Company Common Stock exclusively in shares of Company Common
Stock, (ii) subdivide its outstanding shares of Company Common Stock,
(iii) combine its outstanding shares of Company Common Stock into a
smaller number of shares or (iv) issue by reclassification of its
shares of Company Common Stock any shares of capital stock of the
Company, the conversion privilege and the Conversion Price in effect
immediately prior to such action shall be adjusted so that the Holder
of any Series A Notes thereafter surrendered for conversion shall be
entitled to receive the number of shares of capital stock of the
Company that he would have owned immediately following such action had
such Series A Notes been converted immediately prior thereto. An
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or other
distribution and shall become effective immediately after the effective
date in case of a subdivision, combination or reclassification (or
immediately after the record date if a record date shall have been
established for such event). If, as a result of an adjustment made
pursuant to this subsection (a), the Holder of any Series A Notes
thereafter surrendered for conversion shall become entitled to receive
shares of two or more classes or series of capital stock of the
Company, the Board of Directors (whose determination shall be
conclusive and shall be described in a Board Resolution filed with the
Trustee) shall determine the allocation of the adjusted Conversion
Price between or among shares of such classes or series of capital
stock. In the event that such dividend, distribution, subdivision,
combination or issuance is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price that would then be
in effect if such record date had not been fixed.
(b) In case the Company shall, while any of the Series A Notes
are Outstanding, issue rights or warrants to all holders of its Company
Common Stock entitling them (for a period expiring within 45 days after
the record date for the determination of stockholders entitled to
receive such rights or warrants) to subscribe for or purchase shares of
Company Common Stock at a price per share less than the Current Market
Price per share of Company Common Stock on such record date, the
Conversion Price for the Series A Notes shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the
number of shares of Company Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares that the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Current Market Price,
and of which the denominator shall be the number of shares of Company
Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Company Common Stock
offered for subscription or purchase. Such adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants. For the
purposes of this subsection, the number of shares of Company Common
Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not issue any rights or
warrants in respect of shares of Company Common Stock held in the
treasury of the Company. In case any rights or warrants referred to in
this subsection in respect of which an adjustment shall have been made
shall expire unexercised within 45 days after the same shall have been
distributed or issued by the Company, the Conversion Price shall be
readjusted at the time of such expiration to the Conversion Price that
would have been in effect if no adjustment had been made on account of
the distribution or issuance of such expired rights or warrants.
(c) Subject to the last sentence of this subparagraph, in case
the Company shall, by dividend or otherwise, distribute to all holders
of its Company Common Stock evidences of its indebtedness, shares of
any class or series of capital stock, cash or assets (including
securities, but excluding any rights or warrants referred to in
subparagraph (b), any dividend or distribution paid exclusively in cash
and any dividend or distribution referred to in subparagraph (a) of
this Section 205), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subparagraph (c) by a
fraction of which the numerator shall be the Current Market Price per
share of Company Common Stock on the date fixed for the payment of such
distribution (the "Reference Date") less the fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), on the
Reference Date, of the portion of the evidences of indebtedness, shares
of capital stock, cash and assets so distributed applicable to one
share of Company Common Stock and the denominator shall be such Current
Market Price per share of Company Common Stock, such reduction to
become effective immediately prior to the opening of business on the
day following the Reference Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again
be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not occurred. For purposes of this
subparagraph (c), any dividend or distribution that includes shares of
Company Common Stock or rights or warrants to subscribe for or purchase
shares of Company Common Stock shall be deemed instead to be (i) a
dividend or distribution of the evidences of indebtedness, shares of
capital stock, cash or assets other than such shares of Company Common
Stock or such rights or warrants (making any Conversion Price reduction
required by this subparagraph (c)) immediately followed by (ii) a
dividend or distribution of such shares of Company Common Stock or such
rights or warrants (making any further Conversion Price reduction
required by subparagraph (a) or (b)), except (A) the Reference Date of
such dividend or distribution as defined in this subparagraph shall be
substituted as (x) "the record date in the case of a dividend or other
distribution," and (y) "the record date for the determination of
stockholders entitled to receive such rights or warrants" and (z) "the
date fixed for such determination" within the meaning of subparagraphs
(a) and (b) and (B) any shares of Company Common Stock included in such
dividend or distribution shall not be deemed outstanding for purposes
of computing any adjustment of the Conversion Price in subparagraph
(a).
(d) In case the Company shall pay or make a dividend or other
distribution on its Company Common Stock exclusively in cash (excluding
(i) all cash dividends, if the amount thereof does not exceed the per
share amount of the immediately preceding regular cash dividend (as
adjusted to reflect any of the events referred to in subparagraphs (a),
(b) or (c) of this Section), (ii) all cash dividends, if the annualized
amount thereof per share of Company Common Stock does not exceed 12.5%
of the Current Market Price per share of Company Common Stock on the
Trading Day immediately preceding the date of declaration of such
dividend and (iii) a redemption of any Rights issued under a Rights
Agreement), the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subparagraph (d) by a fraction of which
the numerator shall be the Current Market Price per share of Company
Common Stock on the date fixed for the payment of such distribution
less the amount of cash so distributed (excluding that portion of such
distribution that does not exceed 12.5% of the Current Market Price per
share, determined as provided above) applicable to one share of Company
Common Stock and the denominator shall be such Current Market Price per
share of Company Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the
date fixed for the payment of such distribution; provided, however,
that in the event the portion of the cash so distributed applicable to
one share of Company Common Stock is equal to or greater than the
Current Market Price per share of Company Common Stock on the record
date mentioned above (excluding that portion of such distribution that
does not exceed 12.5% of the Current Market Price per share, determined
as provided above), in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of Series A Notes shall
have the right to receive upon conversion the amount of cash such
Holder would have received had such Holder converted each Series A
Notes immediately prior to the record date for the distribution of the
cash (less that portion of such distribution that does not exceed 12.5%
of the Current Market Price per share, determined as provided above).
In the event that such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price
that would then be in effect if such record date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or
any portion of Company Common Stock shall expire and such tender or
exchange offer shall involve the payment by the Company or such
Subsidiary of consideration per share of Company Common Stock having a
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it
shall have been amended) that exceeds 110% of the Current Market Price
per share of Company Common Stock on the Trading Day next succeeding
the Expiration Time, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subparagraph (e) by a
fraction of which the numerator shall be the number of shares of
Company Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time (including the Purchased Shares) (as
defined below) multiplied by the Current Market Price per share of
Company 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
stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as
the "Purchased Shares") (excluding that portion of such consideration
that does not exceed 110% of the Current Market Price per share) and
(y) the product of the number of shares of Company Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the
Current Market Price per share of Company 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. In the event that such tender or
exchange offer is not so made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if
such record date had not been fixed.
(f) If the distribution date for any Rights of the Company
provided in any Rights Agreement occurs prior to the Conversion Date,
and a Holder of the Series A Notes who converts such Series A Notes
after such distribution date is not entitled to receive the Rights that
would otherwise be attached (but for the date of conversion) to the
shares of Company Common Stock received upon such conversion, then an
adjustment shall be made to the Conversion Price pursuant to clause
(ii) of Section 205(a) as if the Rights were being distributed to
holders of Company Common Stock immediately prior to such conversion.
If such an adjustment is made and the Rights are later redeemed,
invalidated or terminated, then a corresponding reversing adjustment
shall be made to the Conversion Price, on an equitable basis, to take
account of such event.
(g) The Company shall have the right to reduce from time to
time the Conversion Price by any amount selected by the Company for any
period of at least 20 days, provided, that the Company shall give at
least 15 days' written notice of such reduction to the Trustee and the
Property Trustee. The Company may, at its option, make such reductions
in the Conversion Price, in addition to those set forth above in
Section 205(a), as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of Company Common Stock resulting
from any dividend or distribution of stock (or rights to acquire stock)
or from any event treated as such for United States Federal income tax
purposes.
(h) Notwithstanding anything to the contrary in this Section
205, no adjustment of the Conversion Price will be made upon the
issuance of any shares of Company Common Stock (or securities
convertible or exchangeable for Company Common Stock), except as
specifically provided above, including pursuant to any present or
future 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 Company Common Stock under any such plan,
or the issuance of any shares of Company Common Stock or options or
rights to purchase such shares pursuant to any present or future
employee benefit plan or program of the Company or pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible
security that does not constitute an issuance to all holders of Company
Common Stock of rights or warrants entitling holders of such rights or
warrants to subscribe for or purchase Company Common Stock at less than
the Current Market Price. Further, such issuances shall not be deemed
to constitute an issuance of Company 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 2.
(i) If any action would require adjustment of the Conversion
Price pursuant to more than one of the provisions described above, only
one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to the Holder of the
Series A Notes. No adjustment in the Conversion Price will be required
unless such adjustment would require an increase or decrease of at
least 1% of the Conversion Price, but any adjustment that would
otherwise be required to be made shall be carried forward and taken
into account in a subsequent adjustment.
SECTION 206. Fundamental Change.
(a) In the event that the Company is a party to any
transaction including a merger (other than a merger that does not
result in a reclassification, conversion, exchange or cancellation of
Company Common Stock), consolidation, sale of all or substantially all
of the assets of the Company, recapitalization or reclassification of
Company Common Stock (other than a change in par value, or from par
value to no par value, or from no par value to par value or as a result
of a subdivision or combination of Company Common Stock) or any
compulsory share exchange (each of the foregoing being referred to as a
"Transaction"), in each case, as a result of which shares of Company
Common Stock shall be converted into the right to receive, or shall be
exchanged for the right to receive, (i) in the case of any Transaction
other than a Transaction involving a Common Stock Fundamental Change
(and subject to funds being legally available for such purpose under
applicable law at the time of such conversion), securities, cash or
other property, each Series A Note shall thereafter be convertible into
the kind and amount of securities, cash and other property receivable
upon the consummation of such Transaction by a holder of that number of
shares of Company Common Stock into which a Series A Note was
convertible immediately prior to such Transaction, or (ii) in the case
of a Transaction involving a Common Stock Fundamental Change, common
stock, each Series A Note shall thereafter be convertible (in the
manner described herein) into common stock of the kind received by
holders of Company Common Stock (but in each case after giving effect
to any adjustment discussed in paragraphs (b) and (c) relating to a
Fundamental Change if such Transaction constitutes a Fundamental
Change). The holders of Series A Notes or Preferred Securities will
have no voting rights with respect to any Transaction.
(b) If any Fundamental Change occurs, then the Conversion
Price in effect will be adjusted immediately after such Fundamental
Change as described in paragraph (c) below. In addition, in the event
of a Common Stock Fundamental Change, each Series A Note shall be
convertible solely into common stock of the kind received by holders of
Company Common Stock as a result of such Common Stock Fundamental
Change.
(c) The Conversion Price in the case of any Transaction
involving a Fundamental Change will be adjusted immediately after such
Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change,
the Conversion Price of the Series A Notes will thereupon
become the lower of (A) the Conversion Price in effect
immediately prior to such Non-Stock Fundamental Change, but
after giving effect to any other prior adjustments effected
pursuant to the preceding paragraphs, and (B) the result
obtained by multiplying the greater of the Applicable Price or
the then applicable Reference Market Price by a fraction of
which the numerator will be $50 and the denominator will be
(x) the amount of the Redemption Price for one Series A Note
if the Redemption Date were the date of such Non-Stock
Fundamental Change (or, for the period commencing on the first
date of original issuance of the Series A Notes and through
September 30, 2001, and the twelve-month periods commencing
October 1, 2001 and October 1, 2002, the product of 106.250%,
105.625% and _____%, respectively, multiplied by $50) plus (y)
any then accrued and unpaid interest on one Series A Note; and
(ii) in the case of a Common Stock Fundamental
Change, the Conversion Price of the Series A Notes in effect
immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other prior adjustments effected
pursuant to the preceding paragraphs, will thereupon be
adjusted by multiplying such Conversion Price by a fraction of
which the numerator will be the Purchaser Stock Price and the
denominator will be 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 Company Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, is
paid only with respect to any fractional interests in such
common stock resulting from such Common Stock Fundamental
Change) and (B) all of Company Common Stock will have been
exchanged for, converted into or acquired for common stock
(and cash with respect to fractional interests) of the
successor, acquiror or other third party, the Conversion Price
of the Series A Notes in effect immediately prior to such
Common Stock Fundamental Change will thereupon be adjusted by
multiplying such Conversion Price by a fraction of which the
numerator will be one and the denominator will be the number
of shares of common stock of the successor, acquiror or other
third party received by a holder of one share of Company
Common Stock as a result of such Common Stock Fundamental
Change.
SECTION 207. Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price
and shall prepare a certificate signed by the Chief Financial Officer
or the Treasurer of the Company setting forth the adjusted Conversion
Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed with
the Trustee, the Conversion Agent and the transfer agent for the
Preferred Securities and the Series A Notes; and
(b) a notice stating that 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 A Notes at their last addresses as
they appear upon the stock transfer books of the Company and the Trust
and the Securities Registrar.
SECTION 208. Prior Notice of Certain Events. In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Company Common Stock, other than (A) a dividend
payable in shares of Company Common Stock or (B) a dividend payable in
cash that would not require an adjustment pursuant to Section 205(c) or
(d) or (ii) authorize a tender or exchange offer that would require an
adjustment pursuant to Section 205(e);
(b) the Company shall authorize the granting to all holders of
Company Common Stock of rights or warrants to subscribe for or purchase
any shares of stock of any class or series or of any other rights or
warrants;
(c) of any reclassification of Company Common Stock (other
than a subdivision or combination of the outstanding Company Common
Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of stockholders of
the Company shall be required (except solely as a result of the rules
of the New York Stock Exchange or the NASD), or of the sale or transfer
of all or substantially all of the assets of the Company or of any
compulsory share exchange whereby Company Common Stock is converted
into other securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company;
then the Company shall (A) if any Preferred Securities are outstanding under the
Trust Agreement, 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 (B) shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Security Register, at least
15 days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) 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 Company Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined or (y) 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 Company Common Stock of record shall be entitled to exchange their
shares of Company 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 209. Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on its Company Common
Stock referred to in Section 205(c) or 205(d) (including dividends or
distributions referred to in the last sentence of Section 205(c)), the Holders
of the Series A Notes, upon the conversion thereof subsequent to the close of
business on the date fixed for the determination of stockholders entitled to
receive such distribution and prior to the effectiveness of the Conversion Price
adjustment (such that the Conversion Price is not adjusted with respect to such
distribution) in respect of such distribution, shall also be entitled to receive
for each share of Company Common Stock into which the Series A Notes are
converted, the portion of the shares of Company Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Company Common Stock; provided, however,
that, at the election of the Company (whose election shall be evidenced by a
Board Resolution) 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
Board Resolution). If any conversion of Series A Notes described in the
immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Company Common Stock that the Holder of Series A
Notes so converted is entitled to receive in accordance with the immediately
preceding sentence, the Company may elect (such election to be evidenced by a
Board Resolution) to distribute to such Holder a due bill for the shares of
Company 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 bill (i) meets any applicable requirements of the principal
national securities exchange or other market on which Company Common Stock is
then traded and (ii) requires payment or delivery of such shares of Company
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 Company Common Stock receiving such distribution.
SECTION 210. Restrictions on Company Common Stock Issuable Upon
Conversion.
(a) Shares of Company Common Stock to be issued upon
conversion of a Series A Note in respect of Preferred Securities shall
bear such restrictive legends as the Company may provide in accordance
with applicable law.
(b) If shares of Company Common Stock to be issued upon
conversion of a Series A Note in respect of Preferred Securities are to
be registered in a name other than that of the Holder of such Preferred
Security, then the Person in whose name such shares of Company Common
Stock are to be registered must deliver to the Conversion Agent a
certificate satisfactory to the Company and signed by such Person, as
to compliance with the restrictions on transfer applicable to such
Preferred Security. Neither the Trustee nor any Conversion Agent or
Securities Registrar shall be required to register in a name other than
that of the Holder of such Preferred Securities shares of Company
Common Stock issued upon conversion of any such Series A Note in
respect thereof not so accompanied by a properly completed certificate.
SECTION 211. Trustee Not Responsible for Determining Conversion Price
or Adjustments. Neither the Trustee nor any Conversion Agent shall at any time
be under any duty or responsibility to any Holder of any Series A Note or to any
holder of a Preferred Security to determine whether any facts exist that may
require any adjustment of the Conversion Price, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed,
or herein or in any supplemental indenture provided to be employed, in making
the same. Neither the Trustee nor any Conversion Agent shall be accountable with
respect to the validity or value (or the kind of account) of any shares of
Company Common Stock or of any securities or property, which may at any time be
issued or delivered upon the conversion of any Series A Note; and neither the
Trustee nor any Conversion Agent makes any representation with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver
any shares of Company Common Stock or stock certificates or other securities or
property upon the surrender of any Series A Note for the purpose of conversion,
or, except as expressly herein provided, to comply with any of the covenants of
the Company contained in Article 10 of the Original Indenture or this Article 2.
ARTICLE 3
Miscellaneous Provisions
SECTION 301. Recitals by Company. The recitals in this First
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of Series A Notes and of this First Supplemental Indenture
as fully and with like effect as if set forth herein in full.
SECTION 302. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture, as heretofore supplemented and modified,
and this First Supplemental Indenture shall be read, taken and construed as one
and the same instrument.
SECTION 303. Executed in Counterparts. This First Supplemental
Indenture may be simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.
SECTION 304. Listing of Series A Notes. If the Series A Notes are to be
issued as a Global Security in connection with the distribution of the Series A
Notes to the Holders of the Preferred Securities issued by the Trust, the
Company will use its best efforts to list such Series A Notes on the New York
Stock Exchange or any such other exchange on which such Preferred Securities are
then listed and traded.
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officers, all as of the day
and year first above written.
ATTEST: SOUTHERN ENERGY, INC.
By: By:
----------------------- ---------------------------------
Secretary Vice President
ATTEST: BANKERS TRUST COMPANY, as Trustee
By: By:
----------------------- ---------------------------------
<PAGE>
EXHIBIT A
FORM OF SERIES A NOTE
NO. __ CUSIP NO. 842816AA8
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY 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 SECURITY IS ISSUED SUBJECT TO THE
PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
SOUTHERN ENERGY, INC.
6 1/4% JUNIOR CONVERTIBLE SUBORDINATED NOTE, SERIES A
DUE 2030
Principal Amount: $_________
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: October 2, 2000
Stated Maturity: October 1, 2030
Interest Payment Dates: January 1, April 1, July 1 and October 1
Interest Rate: 6 1/4% per annum
Authorized Denomination: $50
Initial Redemption Date: October 1, 2003
Southern Energy, Inc., a Delaware corporation (the "Company", which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
_____________________________________, or registered assigns, the principal sum
of _________ DOLLARS ($__________) on the Stated Maturity shown above (or upon
earlier redemption or Stated Maturity), and to pay interest thereon from the
Original Issue Date shown above, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, quarterly in arrears on
each Interest Payment Date as specified above, commencing on the Interest
Payment Date next succeeding the Original Issue Date shown above and on Stated
Maturity (or upon earlier redemption) at the rate per annum shown above until
the principal hereof is paid or made available for payment and on any overdue
principal and on any overdue installment of interest. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date (other
than an Interest Payment Date that is Stated Maturity or on a Redemption Date)
will, as provided in such Indenture, be paid to the Person in whose name this
Note (the "Note") is registered on the Regular Record Date for such Interest
Payment Date, provided that any interest payable at Stated Maturity or on any
Redemption Date will be paid to the Person to whom principal is payable. Except
as otherwise provided in the Indenture, any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this Note
is registered at the close of business on a Special Record Date for the payment
of such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Notes of this series shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. If the amount of interest is calculated for any period shorter than a
full quarterly interest period, it will be computed on the basis of the number
of days elapsed on a 360-day year. In the event that any date on which interest
is payable on this Note is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day without any interest or other payment resulting from such delay, with the
same force and effect as if made on the date the payment was originally payable.
A "Business Day" shall mean any day other than a Saturday or a Sunday or a day
on which banking institutions in New York City are authorized or required by law
or executive order to remain closed or a day on which the Corporate Trust Office
of the Trustee or the principal corporate trust office of the Property Trustee
of the Trust are closed for business.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time and from time to time during the term
of this Note to extend the interest payment period of such Note for up to 20
consecutive quarters but not beyond the Stated Maturity of this Note (each, an
"Extension Period"), during which periods unpaid interest (together with
interest thereon) will compound quarterly at the Interest Rate ("Deferred
Interest"). Upon the termination of each Extension Period, which shall be an
Interest Payment Date, the Company shall pay all Deferred Interest to the Person
in whose name this Note is registered at the close of business on the Regular
Record Date for such Interest Payment Date, provided that any Deferred Interest
payable at Stated Maturity or on any Redemption Date will be paid to the Person
to whom principal is payable. Prior to the termination of any such Extension
Period, the Company may extend the interest payment period, provided that such
Extension Period together with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters. Upon the termination of any such
Extension Period, and the payment of all accrued and unpaid interest and any
Additional Interest then due, the Company may select a new Extension Period,
subject to the above requirements. If the Company shall have given notice of its
election to select any Extension Period, the Company shall not, subject to
certain exceptions provided in the Indenture, (i) declare or pay any dividend or
distribution on, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, or make any guarantee payments with
respect to the foregoing, and (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees other than its guarantee of the Trust Securities issued by
the Trust) issued by the Company that rank pari passu with or junior to this
Note. The Company shall give the Trustee, the Property Trustee and the
Administrative Trustees notice of its selection or extension of an Extension
Period at least one Business Day prior to the earlier of (i) the Regular Record
Date relating to the Interest Payment Date on which the Extension Period is to
commence or relating to the Interest Payment Date on which an Extension Period
that is being extended would otherwise terminate, or (ii) the date the Property
Trustee (or if no Preferred Securities are outstanding, the Trustee) is required
to give notice to the New York Stock Exchange or other applicable
self-regulatory organization of the record date or the date distributions are
payable.
The Company also shall be obligated to pay when due and without
extension all additional amounts as may be required so that the net amount
received and retained by the Holder of this Note (if the Holder is a Securities
Trust) after paying taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other taxing authority will not be less than the amounts such Holder would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
Payment of the principal of and interest (including Additional
Interest, if any) due at Stated Maturity or earlier redemption of the Series A
Notes shall be made upon surrender of the Series A Notes at the Corporate Trust
Office of the Trustee, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts. Payment of interest (including interest on an Interest Payment Date) will
be made, subject to such surrender where applicable, at the option of the
Company, (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or (ii) by wire transfer at
such place and to such account at a banking institution in the United States as
may be designated in writing to the Trustee at least 16 days prior to the date
for payment by the Person entitled thereto.
The indebtedness evidenced by this Note 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 Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Note, 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 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, 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.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ________ __, 20__.
SOUTHERN ENERGY, INC.
By:
------------------------------
Attest:
Secretary
{Seal of SOUTHERN ENERGY, INC. appears here}
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By: ______________________
Authorized Officer
<PAGE>
(Reverse Side of Note)
This Note is one of a duly authorized issue of Junior Subordinated
Notes of the Company (the "Notes"), issued and issuable in one or more series
under a Subordinated Note Indenture, dated as of October 1, 2000, as
supplemented by the First Supplemental Indenture, dated October 2, 2000 (the
"Indenture"), between the Company and Bankers Trust Company, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures incidental thereto reference is hereby made
for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Notes
issued thereunder and of the terms upon which said Notes are, and are to be,
authenticated and delivered. This Note is one of the series designated on the
face hereof as 6 1/4% Junior Convertible Subordinated Notes, Series A due 2030
(the "Series A Notes") in the aggregate principal amount of up to $__________.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Indenture.
If a Tax Event occurs, then the Company will have the right (a) prior
to the dissolution of the Trust, to shorten the Stated Maturity of this Note to
the minimum extent required, but not earlier than October 2, 2015, or (b) to
direct the Property Trustee to dissolve the Trust (if not previously dissolved)
and shorten the Stated Maturity of this Note to the minimum extent required, but
not earlier than October 2, 2015, in each case such that in the Opinion of
Counsel experienced in such matters, after shortening the Stated Maturity,
interest paid on the Note will be deductible by the Company for federal income
tax purposes.
The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note at any time on or after October 1, 2003 at
the option of the Company, without premium or penalty, in whole or in part;
provided, however, that the Note may only be redeemed if the Closing Price of
the Company Common Stock exceeds 125% of the Conversion Price for at least 20
Trading Days within a period of 30 consecutive Trading Days ending within five
Trading Days of the date of the notice of redemption. In case of such optional
redemption, the Redemption Price shall equal the following prices expressed in
percentages of the principal amount together with accrued interest to but
excluding the date fixed for redemption if redeemed during the 12-month period
beginning October 1;
Year Redemption Price
2003...................................................104.375%
2004...................................................103.750%
2005...................................................103.125%
2006...................................................102.500%
2007...................................................101.875%
2008...................................................101.250%
2009...................................................100.625%
2010 and thereafter....................................100.000%
<PAGE>
Upon the occurrence of a Special Event at any time, the Company may, within 90
days following the occurrence thereof and subject to the terms and conditions of
the Indenture, redeem this Note without premium or penalty, in whole, at a
Redemption Price equal to 100% of the principal amount thereof plus accrued and
unpaid interest, including any Additional Interest, if any, to the Redemption
Date. A Special Event may be a Tax Event or an Investment Company Act Event.
"Tax Event" means that the Company shall have received an Opinion of Counsel
experienced in such matters to the effect that, as a result of (a) any amendment
to, or change (including any announced prospective change) in, 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 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 by any
legislative body, court, governmental agency or regulatory authority that
provides for a position with respect to such laws or regulations that differs
from its previous position or a commonly accepted position; or (d) any action
taken by any governmental agency or regulatory authority, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
of the Opinion of Counsel, subject to United States federal income tax with
respect to income accrued or received on the Series A Notes, (ii) interest
payable by the Company on the Series A Notes is not, or will not be within 90
days of the date of the Opinion of Counsel, deductible by the Company for United
States federal income tax purposes, (iii) the timing of the deduction for
interest payable by the Company on the Series A Notes is, or will be within 90
days of the date of the Opinion of Counsel, required to be made by reference to
a system that defers the timing of such deductions compared to the timing
permitted under the principles of economic accrual; or (iv) the Trust would be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges, which change or amendment becomes effective on or after
the Original Issue Date. "Investment Company Act Event" means that the Company
shall have received an Opinion of Counsel to the effect that, as a result of the
occurrence of a change (including prospective change) in law or regulation or a
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended, which change becomes effective on or after the Original Issue
Date.
In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the surrender hereof. The Series A Notes will not
have a sinking fund.
At any time, the Company shall have the right to dissolve the Trust and
cause this Note to be exchanged for Preferred Securities in dissolution of the
Trust after satisfaction of liabilities to creditors of the Trust as provided by
applicable law. The Company may also exchange this Note for Preferred Securities
upon the occurrence of a Special Event.
Subject to and upon compliance with the provisions of the Indenture and
subject to the Company's right to elect a cash settlement as set forth below,
this Note is convertible, at the option of the Holder, at any time on or after
October 2, 2001 and prior to the close of business on the Business Day prior to
the redemption or Stated Maturity, into fully paid and nonassessable shares of
Company Common Stock at an initial conversion rate of 1.8182 shares of Company
Common Stock for each $50 in aggregate principal amount of this Note (equal to a
conversion price of approximately $27.50 per share of Company Common Stock),
subject to adjustment as described in the Indenture. The Holder of this Note may
convert any portion hereof that is called for redemption. In case the Note or
portion hereof is called for redemption, such conversion right shall expire at
the close of business on the Business Day prior to the Redemption Date, unless
the Company defaults in making the payment due upon redemption. At any time
after October 2, 2001 and prior to the Spin-Off, the Company may elect to make a
cash settlement in respect of this Note if surrendered for conversion by
delivering notice thereof to the Holder not more than five Trading Days after
the Note is surrendered for conversion.
.........If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
.........The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the Notes at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
.........No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
.........As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and of like tenor and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
.........Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
.........The Notes of this series are issuable only in registered form without
coupons in denominations of $50 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Notes of
this series are exchangeable for a like aggregate principal amount of Notes of
this series of a different authorized denomination, as requested by the Holder
surrendering the same upon surrender of the Note or Notes to be exchanged at the
office or agency of the Company.
.........The Company, and by its acceptance of this Note or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Note agree that for United States federal, state and local tax
purposes it is intended that this Note constitute indebtedness.
This Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM- as tenants in UNIF GIFT MIN ACT- _______ Custodian ________
common (Cust) (Minor)
TEN ENT- as tenants by the
entireties under Uniform Gifts to
JT TEN- as joint tenants Minors Act
with right of
survivorship and ________________________
not as tenants (State)
in common
Additional abbreviations may also be used
though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
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(please insert Social Security or other identifying number of assignee)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
-------------------------------------------------------------------------------
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agent to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:__________________ ________________________________________________
________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.
<PAGE>
NOTICE OF CONVERSION
To:......Southern Energy, Inc.
The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion below designated, into Common Stock
of Southern Energy, Inc. in accordance with the terms of the Indenture referred
to in this Note, 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.
Any Holder, upon the exercise of its conversion rights in accordance
with the terms of the Indenture and the Note, agrees to be bound by the terms of
any Rights Agreement relating to Company Common Stock issuable upon conversion
of the Note.
Date: ____________, ____
Portion of Note to be converted ($50 or integral multiples thereof):
.........in whole ____ in part ___
$------------------
------------------------------------
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 institution that is a member of one
of the following recognized Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) in such other guarantee programs acceptable to the Trustee.
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
-----------------------------------
Authorized Officer
