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VALERO ENERGY CORPORATION
and
THE BANK OF NEW YORK
as Trustee
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____% Senior Deferrable Notes due 2005
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FIRST SUPPLEMENTAL INDENTURE
Dated as of June ___, 2000
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FIRST SUPPLEMENTAL INDENTURE, dated as of June __, 2000, (herein
called the "First Supplemental Indenture"), between Valero Energy Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(hereinafter called the "Company"), party of the first part, and The Bank of New
York, a national banking association duly organized and existing under the laws
of the United States, as Trustee under the Indenture referred to below
(hereinafter called the "Trustee"), party of the second part.
WITNESSETH:
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Indenture, dated as of December 12, 1997 (hereinafter called the
"Indenture"), to provide for the issuance from time to time of certain of its
unsecured senior notes (hereinafter called the "Securities"), the form and terms
of which are to be established as set forth in Sections 201 and 301 of the
Indenture; and
WHEREAS, Section 901 of the Indenture provides, among other things,
that the Company and the Trustee may enter into indentures supplemental to the
Indenture for, among other things, the purpose of establishing the form or terms
of the Securities of any series as permitted in Sections 201 and 301 of the
Indenture; and
WHEREAS, the Company desires to create a series of the Securities in
an aggregate principal amount of $___________ to be designated the "____ %
Senior Deferrable Notes due 2005" (the "Senior Notes"), and all action on the
part of the Company necessary to authorize the issuance of the Senior Notes
under the Indenture and this First Supplemental Indenture has been duly taken;
and
WHEREAS, all acts and things necessary to make the Senior Notes when
executed by the Company and completed, authenticated and delivered by the
Trustee as in the Indenture and this First Supplemental Indenture provided, the
valid and binding obligations of the Company and to constitute these presents a
valid and binding supplemental indenture and agreement according to its terms,
have been done and performed; and
WHEREAS, Section 901 of the Indenture provides, among other things,
that the Company and the Trustee may enter into indentures supplemental to the
Indenture to, among other things, add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities; and
WHEREAS, VEC Trust I, a Delaware statutory business trust (the
"Trust"), has offered to the public up to $___________, in aggregate liquidation
amount of its ____% Trust Preferred Securities (the "Preferred Securities") and,
in connection therewith, the Company has agreed to purchase up to $_________ in
value of the aggregate liquidation amount of the Trust's common securities (the
"Common Securities" and together with the Preferred Securities, the "Trust
Securities"), each representing an undivided beneficial interest in the assets
of the Trust, and proposes to invest the proceeds from such offerings in up to
$___________ aggregate principal amount of the Senior Notes;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
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That in consideration of the premises, the Company covenants and
agrees with the Trustee, for the equal benefit of holders of the Senior Notes,
as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms. Unless the context otherwise requires:
(a) a term not defined herein that is defined in the Indenture
has the same meaning when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture
has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do not
affect interpretation;
(f) the following terms have the meanings given to them in the
Declaration: (i) Applicable Margin; (ii) Applicable Principal Amount; (iii)
Common Securities; (iv) Delaware Trustee; (v) Failed Remarketing; (vi)
Guarantee; (vii) Preferred Securities; (viii) Preferred Security
Certificate; (ix) Property Trustee; (x) Redemption Amount; (xi) Redemption
Price; (xii) Regular Trustees; (xiii) Remarketing Agreement; (xiv) Tax
Event; (xv) Remarketing Date; (xvi) Reset Rate; (xvii) Tax Event
Redemption; (xviii) Treasury Portfolio; and (xix) Two-Year Benchmark
Treasury Rate;
(g) the following terms have the meanings given to them in the
Purchase Contract Agreement: (i) Cash Settlement; (ii) PEPS Units; (iii)
Purchase Contract and (iv) Purchase Contract Settlement Date; (v) Treasury
PEPS Unit; (vi) Global Certificate;
(h) the following terms have the meanings given to them in this
Section 1.1(h):
"Business Day" means any day other than a Saturday or Sunday or a
day on which banking institutions in the city of New York, New York or
San Antonio, Texas are authorized or required by law or executive
order to remain closed or a day on which the principal office of the
Trustee or the Property Trustee is closed for business.
"Declaration" means the Amended and Restated Declaration of Trust
of the Trust, dated as of June __, 2000, as amended and restated from
time to time.
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"Direct Action" has the meaning specified in Section 6.2.
"Primary Treasury Dealer" means a primary U.S. government
securities dealer in New York City.
"Purchase Contract Agreement" means the Purchase Contract
Agreement dated as of June __, 2000 between the Company and The Bank
of New York, as Purchase Contract Agent.
"Quotation Agent" means (i) Morgan Stanley & Co. Incorporated and
its respective successors, provided that if Morgan Stanley & Co.
Incorporated ceases to be a Primary Treasury Dealer, the Company will
substitute another Primary Treasury Dealer therefor, or (ii) any other
Primary Treasury Dealer selected by the Company.
"Remarketing" means (i) as long as the Trust has not been
liquidated, the operation of the procedures for remarketing specified
in Section 7.13 of the Declaration and (ii) if the Trust has been
liquidated, the operation of the procedures for remarketing specified
in Section 5.02 of the Purchase Contract Agreement.
"Remarketing Agent" shall mean Morgan Stanley & Co. Incorporated
or any successor remarketing agent selected by the Company.
ARTICLE II
TERMS AND ISSUANCE OF THE SENIOR NOTES
Section 2.1 Issue of Senior Notes. A series of Securities which shall be
designated the "____% Senior Deferrable Notes due 2005" shall be executed,
authenticated and delivered in accordance with the provisions of, and shall in
all respects be subject to, the terms, conditions and covenants of the Indenture
and this First Supplemental Indenture (including the form of Senior Note set
forth as Exhibits A and B hereto). The aggregate principal amount of Senior
Notes of the series created hereby which may be authenticated and delivered
under the Indenture shall not, except as permitted by the provisions of the
Indenture, exceed $__________. The Senior Note shall be initially issued in
certificated form to the Trust (the "Initial Senior Note") and shall be
substantially in the Form of Exhibit B attached hereto. The terms of such Senior
Note are herein incorporated by reference and are part of the First Supplemental
Indenture.
Section 2.2 Maturity. Unless a Tax Event Redemption occurs, the entire
principal amount of the Senior Note will mature and become due and payable
together with any accrued and unpaid interest thereon, on August 18, 2005 (the
"Maturity Date").
Section 2.3 Global Senior Notes. If distributed to holders of Preferred
Securities in connection with the involuntary or voluntary liquidation and
dissolution of the Trust:
(a) If the Preferred Securities are held in book-entry form, the
Initial Senior Note may be presented to the Trustee by the Property Trustee
in exchange for a
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Global Security in the form of Exhibit A in an aggregate principal amount
equal to all Outstanding Senior Notes (a "Global Senior Note"). The
Depositary for the Global Senior Note will be The Depository Trust Company.
The Global Senior Note will be registered in the name of the Depositary or
its nominee, Cede & Co., and delivered by the Trustee to the Depositary or
a custodian appointed by the Depositary for crediting to the accounts of
its participants pursuant to the instructions of the Property Trustee. The
Company upon any such presentation shall execute a Global Senior Note in
such aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture and this First
Supplemental Indenture. Payments on the Senior Notes issued as a Global
Senior Note will be made to the Depositary or its nominee.
(b) If any Preferred Securities are held in non book-entry
certificated form ("Non Book-Entry Preferred Securities"), the Initial
Senior Note may be presented to the Trustee by the Property Trustee, and
such Non Book-Entry Preferred Securities will be deemed to represent
beneficial interests in Senior Notes presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities
until the Preferred Security Certificates representing such Non Book-Entry
Preferred Securities are presented to the Security Registrar for transfer
or reissuance, at which time such Preferred Security Certificates will be
canceled and a Senior Note registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder of such
Preferred Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security Certificate canceled will be executed by the Company and delivered
to the Trustee for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture. On issue of such Senior
Notes, Senior Notes with an equivalent aggregate principal amount that were
presented by the Property Trustee to the Trustee will be deemed to have
been canceled.
Section 2.4 Interest. (a) Each Senior Note will bear interest at the
rate of ____% per annum from June __, 2000 until the Purchase Contract
Settlement Date, and at the Reset Rate thereafter, payable quarterly in arrears
on February 18, May 18, August 18 and November 18 of each year, commencing
August 18, 2000 (the "Interest Payment Dates").
(b) The Regular Record Dates for the payment of interest on the Senior
Notes on any Interest Payment Date, shall be (i) as long as the Senior Notes are
represented by a Global Senior Note or the Initial Senior Note, the Business Day
preceding each Interest Payment Date or (ii) if the Senior Notes are issued
pursuant to Section 2.3(b) above, the fifteenth Business Day prior to each
Interest Payment Date.
(c) The interest rate on the Senior Notes outstanding on and after the
Remarketing Date will be reset to the Reset Rate. The Reset Rate will be equal
to the rate per annum that results from the Remarketing, provided that if a
Failed Remarketing occurs, the Reset Rate will be equal to (i) the Two-Year
Benchmark Treasury Rate plus (ii) the Applicable Margin.
(d) The amount of interest payable on the Senior Notes for any period
will be computed (i) for any full quarterly period on the basis of a 360-day
year of twelve 30-day
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months and (ii) for any period shorter than a full quarterly period, on the
basis of a 30-day month and, for any period less than a month, on the basis of
the actual number of days elapsed per 30-day month. In the event that any date
on which interest is payable on the Senior Notes is not a Business Day, then
payment of the interest payable on such date will be made on the next day that
is a Business Day (and without interest or other payment in respect of any such
delay), except that, if such Business Day is in the next calendar year, then
such payment will be made on the preceding Business Day.
Section 2.5 Redemption. (a) If a Tax Event occurs and is continuing, the
Company may, at its option and upon not less than 30 nor more than 60 days'
notice to the Holders of the Senior Notes, redeem the Senior Notes in whole (but
not in part) within 90 days following the occurrence of such Tax Event, at a
price equal to, for each Senior Note, the Redemption Price. The aggregate
Redemption Price shall be paid prior to 12:00 noon, New York City time, on the
date of redemption (the "Tax Event Redemption Date") or such earlier time as the
Company determines, provided that the Company shall have deposited with the
Trustee an amount sufficient to pay the aggregate Redemption Price by 10:00 a.m.
on the Tax Event Redemption Date. Such redemption shall otherwise be in
accordance with the provisions of Article III of the Indenture.
(b) Except as provided in Section 2.5(a), the Company will have no
right to redeem the Senior Notes.
(c) The Senior Notes will not be subject to a sinking fund provision.
Section 2.6 Events of Default. So long as the Senior Notes are held by the
Trust, it shall be an Event of Default with respect to the Senior Notes if the
Trust shall have voluntarily or involuntarily dissolved, wound up its business
or otherwise terminated its existence except in connection with (i) the
distribution of the Senior Notes held by the Trust to the holders of the
Preferred Securities and Common Securities in liquidation of their interests in
the Trust, (ii) the redemption of all of the outstanding Preferred Securities
and Common Securities or (iii) a consolidation, conversion, amalgamation, merger
or other transaction involving the Trust that is permitted under Section 3.15 of
the Declaration.
Section 2.7 Paying Agent; Security Registrar. If the Senior Notes are
issued in certificated form, the Paying Agent and the Security Registrar for the
Senior Notes shall be the Property Trustee.
Section 2.8 Extension of Interest Payment Period. The Company shall have
the right at any time, and from time to time, during the term of the Senior
Notes, to defer payments of interest by extending the interest payment period of
such Senior Notes for a period not exceeding 20 consecutive quarters or
extending beyond the Maturity Date of the Senior Notes (the "Extension Period"),
during which Extension Period no interest shall be due and payable. To the
extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 2.8, will bear interest thereon at the rate of ____% until August
18, 2000, and at the Reset Rate thereafter compounded quarterly for each quarter
of the Extension Period ("Compounded Interest"). At the end of the Extension
Period, the Company shall pay all interest accrued and unpaid on the Senior
Notes and
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Compounded Interest (together, "Deferred Interest") that shall be payable to the
Holders of the Senior Notes in whose names the Senior Notes are registered in
the Security Register on the first Regular Record Date after the end of the
Extension Period. During any such Extension Period or an Event of Default,
however, the Company shall not (a) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities that rank
junior to the Senior Notes in the right of payment issued by the Company, or (b)
make any guarantee payments with respect to any guarantee by the Company of any
securities of any of its subsidiaries if such guarantee ranks junior to the
Senior Notes in right of payment or (c) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock, except for or as a result
of (i) dividends or distributions in, or options, warrants or rights to
subscribe for or purchase, the Company's common stock; (ii) any declaration of a
dividend in connection with the implementation of a shareholder's rights plan,
or the issuance of shares under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto; (iii) a reclassification of
the Company's capital stock solely into shares of one or more classes or series
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for or into another class or series of the
Company's capital stock; (iv) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged; and (v) the
purchase of the Company's common stock in connection with the Company's normal
course issuer bid-purchases for the satisfaction by the Company of its
obligations under any benefit plans for the Company and the Company's
subsidiaries' directors, officers or employees or under any of the Company's
dividend reinvestment plans. Prior to the expiration of any Extension Period,
the Company may further extend such period, provided that such period together
with all such previous and further extensions thereof shall not exceed 20
quarters or extend beyond the Maturity Date of the Senior Notes. Upon
termination of any Extension Period and the payment of all Deferred Interest
then due, the Company may commence a new Extension Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extension
Period except at the end thereof, but the Company, at its option, may prepay on
any Interest Payment Date all or any portion of the interest accrued during the
then elapsed portion of an Extension Period.
Section 2.9 Notice of Extension. The Company shall give written notice to
the Trustee of its election of any Extension Period (or any further extension
thereof) at least five Business Days before the earlier of (i) the date the
interest on the Senior Notes would have been payable except for the election to
begin or extend the Extension Period; (ii) the date the Trustee is required to
give notice to any securities exchange or to Holders of Senior Notes of the
Record Date or the Interest Payment Date, and (iii) the Record Date.
Section 2.10 Place of Payment. The Place of Payment will be initially the
corporate trust offices of the Trustee which, at the date hereof, are located at
_______________________________________. Attention: Corporate Trust
Administration Department.
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ARTICLE III
EXPENSES
Section 3.1 Payment of Expenses. In connection with the offering, sale and
issuance of the Senior Notes to the Trust in connection with the sale of the
Preferred Securities and Common Securities by the Trust, the Company will:
(a) pay for all costs and expenses relating to the offering, sale
and issuance of the Senior Notes, including compensation of the Trustee
under the Indenture in accordance with the provisions of Section 607 of the
Indenture; and
(b) pay for all costs and expenses of the Trust, including, but
not limited to, costs and expenses relating to the organization of the
Trust, the offering, sale and issuance of the Trust Securities; the fees
and expenses of the Property Trustee (including, without limitation, those
incurred in connection with the enforcement by the Property Trustee of the
rights of the holders of the Preferred Securities), the Delaware Trustee
and the Regular Trustees; the costs and expenses relating to the operation
of the Trust (including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses); and costs and expenses
incurred in connection with the acquisition, financing and disposition of
Trust assets;
(c) be primarily liable for any indemnification obligations
arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
ARTICLE IV
COVENANTS
Section 4.1 Covenants in the Event of an Event of Default. As long as the
Senior Notes are held by the Trust, if an Event of Default occurs and written
notice of such event has been given to the Company, then the Company may not:
(a) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of
its capital stock; or
(b) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities that rank on a parity
with or junior in interest to the Senior Notes or make any guarantee
payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks on a
parity with or junior in interest to the Senior Notes; other than (i)
purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any employee
benefit plans or the
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satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such Event of Default requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock for another class or series
of the Company's capital stock, (iii) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of the
Company, (v) redemptions or repurchases of any rights pursuant to a rights
agreement and (vi) payments under the Guarantee.
Section 4.2 Additional Covenants Relating to the Trust. For as long as the
Preferred Securities remain outstanding, the Company will:
(a) maintain, directly or indirectly, 100% ownership of the
Common Securities;
(b) cause the Trust to remain a statutory business trust and not
to voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by the Declaration;
(c) use its commercially reasonable efforts to ensure that the
Trust will not be an "investment company" required to be registered under
the Investment Company Act of 1940;
(d) not take any action that would be reasonably likely to cause
the Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes; and
(e) pay all of the debts and obligations of the Trust (other than
with respect to the securities issued by the Trust) and all costs and
expenses of the Trust (including, but not limited to, all costs and
expenses relating to the organization of the Trust, the fees and expenses
of the trustees and all costs and expenses relating to the operation of the
Trust) and any and all taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed on the Trust by
the United States, or any other taxing authority, so that the net amounts
received and retained by the Trust after paying such expenses will be equal
to the amounts the Trust would have received had no such costs or expenses
been incurred by or imposed on the Trust.
ARTICLE V
ORIGINAL ISSUE OF SENIOR NOTES
Section 5.1 Original Issue of Senior Notes. Senior Notes in an aggregate
principal amount of up to $___________ may, upon execution of this First
Supplemental Indenture, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
said Senior Notes upon receipt of a Company Order for authentication and
delivery, without any further action by the Company.
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ARTICLE VI
RIGHTS OF HOLDERS OF PREFERRED SECURITIES
Section 6.1 Preferred Security Holders' Rights. Notwithstanding Section 507
of the Indenture, if the Property Trustee fails to enforce its rights under the
Senior Notes after a holder of Preferred Securities has made a written request,
the holder of Preferred Securities may, to the fullest extent permitted by law,
institute a legal proceeding directly against the Company to enforce the
Property Trustee's rights under the Indenture without first instituting any
legal proceeding against the Property Trustee or any other Person.
Section 6.2 Direct Action. Notwithstanding any other provision of the
Indenture, for as long as any Preferred Securities remain outstanding, to the
fullest extent permitted by law, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Senior Notes on the date such interest or principal
is otherwise payable (or in the case of redemption, the redemption date), then a
holder of Preferred Securities may institute a proceeding directly against the
Company (a "Direct Action") to enforce payment to such holder of the principal
or interest on Senior Notes having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder.
Section 6.3 Payments Pursuant to Direct Actions. The Company will have the
right to set off against its obligations to the Trust, as Holder of the Senior
Notes, any payment made to a holder of Preferred Securities in connection with a
Direct Action.
ARTICLE VII
REMARKETING
Section 7.1 Effectiveness of this Article. Upon a distribution of the
Senior Notes upon the liquidation and dissolution of the Trust which occurs
prior to the Remarketing of the Preferred Securities pursuant to the
Declaration, the Senior Notes shall be Remarketed in accordance with the
Remarketing procedures of the Declaration where all references in the
Remarketing procedures to Preferred Securities shall be read as references to
the Senior Notes, unless the context requires otherwise. Until such a
distribution, or if such distribution occurs after the Remarketing of the
Preferred Securities pursuant to the Declaration, this Article VIII will have no
effect.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Execution of Supplemental Indenture. This First Supplemental
Indenture is executed and shall be construed as an indenture supplemental to the
Indenture and, as provided in the Indenture, this First Supplemental Indenture
forms a part thereof.
Section 8.2 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this First Supplemental Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
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Section 8.3 Effect of Headings. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
Section 8.4 Successors and Assigns. All covenants and agreements in this
First Supplemental Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
Section 8.5 Separability Clause. In case any provision in this First
Supplemental Indenture or in the Senior Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 8.6 Benefits of First Supplemental Indenture. Nothing in this First
Supplemental Indenture or in the Senior Notes, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder and the
holders, any benefit or any legal or equitable right, remedy or claim under this
First Supplemental Indenture.
Section 8.7 Governing Law. This First Supplemental Indenture and each
Senior Note shall be deemed to be a contract made under the laws of the State of
New York, and for all purposes shall be governed by and construed in accordance
with the laws of said State.
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
VALERO ENERGY CORPORATION
[Seal] By:
--------------------------------
Name:
Title:
Attest:
-------------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Trustee
[Seal] By:
--------------------------------
Name:
Title:
Attest:
-------------------------------------
Name:
Title:
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STATE OF ________ )
) Section:
COUNTY OF _______ )
On the ____ day of June 2000, before me personally came ___________,
to me known, who, being by me duly sworn, did depose and say that he is
__________________of Valero Energy Corporation, the corporation described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
----------------------------------------
Notary Public,
State of________________
STATE OF ________ )
) Section:
COUNTY OF________ )
On the ____ day of June 2000, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is ________________ of The Bank of New York, the national banking
association described in and which executed the foregoing instrument; that he
knows the seal of said association; that the seal affixed to said instrument is
such association seal; that it was so affixed by authority of the Board of
Directors of said association, and that he signed his name thereto by like
authority.
----------------------------------------
Notary Public,
State of________________
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EXHIBIT A
[FORM OF FACE OF SENIOR DEFERRABLE NOTE]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR.
REGISTERED REGISTERED
VALERO ENERGY CORPORATION
____% SENIOR DEFERRABLE NOTE DUE 2005
$___________
VALERO ENERGY CORPORATION, a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay VEC Trust I, or registered assigns,
the principal sum of _______________________ Dollars on August 18, 2005, and to
pay interest on said principal sum from _________, 2000, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
quarterly in arrears on February 18, May 18, August 18 and November 18 of each
year (an "Interest Payment Date") commencing August 18, 2000, at the rate of
____% per annum until August 18, 2003, and at the Reset Rate thereafter, until
the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any
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overdue installment of interest at the same rate per annum compounded quarterly.
Any deferred interest shall accrue interest at the rate set forth in the First
Supplemental Indenture. The amount of interest payable for any period will be
computed (1) for any full quarterly period on the basis of a 360-day year of
twelve 30-day months and (2) for any period shorter than a full quarterly
period, on the basis of a 30-day month and, for any period less than a month, on
the basis of the actual number of days elapsed per 30-day month. In the event
that any date on which interest is payable is not a Business Day, then payment
of the interest payable on such date will be made on the next day that is a
Business Day (and without any interest or other payment in respect of such
delay), except that, if such Business Day is in the next calendar year, then
such payment will be made on the preceding Business Day. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, referred to on the
reverse side hereof, be paid to the Holder in whose name this Security (or one
or more Predecessor Securities, as defined in said Indenture) is registered at
the close of business on the Regular Record Date for such interest installment,
which, shall be the close of business on the Business Day preceding such
Interest Payment Date. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Holder in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date to be fixed by the Trustee referred to on the reverse side
hereof for the payment of such defaulted interest, notice whereof shall be given
to the Holders of the Security not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
Payment of the principal of and premium, if any, and interest
on this Security will be made at the office or agency of the Trustee maintained
for that purpose in such coin or currency of the United States of America that
at the time of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such money mailed
to the Holder's registered address or by wire transfer to a dollar account
designated by the Holder.
Interest on the Securities is deferrable in accordance with
the terms of the First Supplemental Indenture.
This Security is, to the extent provided in the Indenture,
unsecured and will rank in right of payment on a parity with all other unsecured
and unsubordinated obligations of the Company.
Unless the Certificate of Authentication hereon has been
executed by or on behalf of the Trustee, this Security shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose. The
provisions of this Security are continued on the reverse side hereof, and such
continued provisions shall for all purposes have the same effect as though fully
set forth at this place.
A-2
<PAGE> 16
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
VALERO ENERGY CORPORATION
Dated: By:
-------------------------------------
John D. Gibbons
Vice President-Finance
and Chief Financial Officer
Attest:
By:
-------------------------------------
Jay D. Browning
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series referred to in the
within-mentioned Indenture.
Dated: THE BANK OF NEW YORK as
Trustee
By:
-------------------------------------
Authorized Officer
A-3
<PAGE> 17
(FORM OF REVERSE OF SENIOR DEFERRABLE NOTE)
VALERO ENERGY CORPORATION
____% SENIOR DEFERRABLE NOTE DUE 2005
This Senior Deferrable Note is one of a duly authorized series
of securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of December 12, 1997,
as amended and supplemented (as amended and supplemented, the "Indenture"),
between the Company and The Bank of New York as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $___________.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
This Security is not subject to any sinking fund, nor may this
Security be redeemed at the option of the Company prior to the Maturity Date.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth therein.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
If a Tax Event occurs and is continuing, the Company may, at
its option and upon not less than 30 nor more than 60 days' notice to the
Holders of the Securities, redeem the Securities in whole (but not in part)
within 90 days following the occurrence of such Tax Event at the Redemption
Price. The Redemption Price shall be paid prior to 12:00 noon, New York City
time, on the Tax Event Redemption Date, by check or wire transfer in immediately
available funds at such place and to such account as may be designated by each
such Holder.
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 Securities 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 Outstanding Securities at the time of all series to be
affected (voting as a class). The Indenture also contains provisions permitting
the Holders of a majority in
A-4
<PAGE> 18
aggregate principal amount of the Outstanding Securities of each series at the
time, on behalf of the Holders of all Securities 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 Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security 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
Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest, if any, on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
This Security shall be exchangeable for Securities registered
in the names of Persons other than the Depositary with respect to such series or
its nominee only as provided in this paragraph. This Security shall be so
exchangeable if (x) the Depositary is at any time unwilling or unable to
continue as Depositary for such series, (y) the Company executes and delivers to
the Trustee a Company Order providing that this Security shall be so
exchangeable or (z) there shall have occurred and be continuing an Event of
Default with respect to the Securities of such series. Securities so issued in
exchange for this Security shall be of the same series, having the same interest
rate, if any, and maturity and having the same terms as this Security, in
authorized denominations and in the aggregate having the same principal amount
as this Security and registered in such names as the Depositary for such Global
Security shall direct.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of a Security of the series of which
this Security is a part is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the
Company in any place where the principal of and premium, if any, and interest,
if any, on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of the series of which this Security is a part
are issuable only in registered form without coupons in denominations of $25 and
in integral multiples thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
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 Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Holder in whose name
A-5
<PAGE> 19
this Security is registered as the owner hereof for all purposes, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
This Security shall be governed by and construed in accordance
with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
A-6
<PAGE> 20
EXHIBIT B
[FORM OF FACE OF SENIOR DEFERRABLE NOTE]
REGISTERED REGISTERED
VALERO ENERGY CORPORATION
____% SENIOR DEFERRABLE NOTE DUE 2005
$__________
VALERO ENERGY CORPORATION, a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay VEC Trust I, or registered assigns,
the principal sum of _______________________ Dollars on August 18, 2005, and to
pay interest on said principal sum from ________, 2000, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
quarterly in arrears on February 18, May 18, August 18 and November 18 of each
year (an "Interest Payment Date") commencing August 18, 2000, at the rate of
____% per annum until August 18, 2003, and at the Reset Rate thereafter, until
the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. Any
deferred interest shall accrue interest at the rate set forth in the First
Supplemental Indenture. The amount of interest payable for any period will be
computed (1) for any full quarterly period on the basis of a 360-day year of
twelve 30-day months and (2) for any period shorter than a full quarterly
period, on the basis of a 30-day month and, for any period less than a month, on
the basis of the actual number of days elapsed per 30-day month. In the event
that any date on which interest is payable is not a Business Day, then payment
of the interest payable on such date will be made on the next day that is a
Business Day (and without any interest or other payment in respect of such
delay), except that, if such Business Day is in the next calendar year, then
such payment will be made on the preceding Business Day. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, referred to on the
reverse side hereof, be paid to the Holder in whose name this Security (or one
or more Predecessor Securities as defined in said Indenture) is registered at
the close of business on the Regular Record Date for such interest installment,
which, shall be the close of business on the Business Day preceding such
Interest Payment Date. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Holder in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date to be fixed by the Trustee referred to on the reverse side
hereof for the payment of such defaulted interest, notice whereof shall be given
to the Holders of the Security not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
B-1
<PAGE> 21
inconsistent with the requirements of any securities exchange on which the
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
Payment of the principal of and premium, if any, and interest
on this Security will be made at the office or agency of the Trustee maintained
for that purpose in such coin or currency of the United States of America that
at the time of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such money mailed
to the Holder's registered address or by wire transfer to a dollar account
designated by the Holder.
Interest on the Securities is deferrable in accordance with
the terms of the First Supplemental Indenture.
This Security is, to the extent provided in the Indenture,
unsecured and will rank in right of payment on a parity with all other unsecured
and unsubordinated obligations of the Company.
Unless the Certificate of Authentication hereon has been
executed by or on behalf of the Trustee, this Security shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose. The
provisions of this Security are continued on the reverse side hereof, and such
continued provisions shall for all purposes have the same effect as though fully
set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
VALERO ENERGY CORPORATION
Dated: By:
------------------------------
John D. Gibbons
Vice President-Finance
and Chief Financial Officer
Attest:
By:
------------------------------
Jay D. Browning
Secretary
B-2
<PAGE> 22
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series referred to in the
within-mentioned Indenture.
Dated: THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------
Authorized Officer
B-3
<PAGE> 23
(FORM OF REVERSE OF SENIOR DEFERRABLE NOTE)
VALERO ENERGY CORPORATION
____% SENIOR DEFERRABLE NOTE DUE 2005
This Senior Deferrable Note is one of a duly authorized series
of securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of December 12, 1997,
as amended and supplemented (as amended and supplemented, the "Indenture"),
between the Company and The Bank of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $___________.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
This Security is not subject to any sinking fund, nor may this
Security be redeemed at the option of the Company prior to the Maturity Date.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth therein.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
If a Tax Event occurs and is continuing, the Company may, at
its option and upon not less than 30 nor more than 60 days' notice to the
Holders of the Securities, redeem the Securities in whole (but not in part)
within 90 days following the occurrence of such Tax Event at the Redemption
Price. The Redemption Price shall be paid prior to 12:00 noon, New York City
time, on the Tax Event Redemption Date, by check or wire transfer in immediately
available funds at such place and to such account as may be designated by each
such Holder.
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 Securities 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 Outstanding Securities at the time of all series to be
affected (voting as a class). The Indenture also contains provisions permitting
the Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series at the time, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
B-4
<PAGE> 24
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security 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 Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest, if any, on this Security 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 a Security of the series of which
this Security is a part is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the
Company in any place where the principal of and premium, if any, and interest,
if any, on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of the series of which this Security is a part
are issuable only in registered form without coupons in denominations of $25 and
in integral multiples thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
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 Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Holder in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Security shall be governed by and construed in accordance
with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
B-5
