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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MAY 26, 1999
POGO PRODUCING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 1-7792 74-1659398
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5 GREENWAY PLAZA, P.O. BOX 2504
HOUSTON, TEXAS 77252-2504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 297-5000
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ITEM 5. OTHER EVENTS.
On May 26, 1999, Pogo Producing Company (the "Company") and Pogo
Trust I (the "Trust") entered into an Underwriting Agreement covering the issue
and sale by the Trust of 3,000,000 6 1/2% Quarterly Income Convertible Preferred
Securities, Series A (liquidation amount $50 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities were registered under the
Securities Act of 1933, as amended, pursuant to the shelf registration statement
(Registration Statement Nos. 333-75105, 333-75105-01 and 333-75105-02) of the
Company, the Trust and Pogo Trust II.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
1.1 Underwriting Agreement, dated as of May 26, 1999, among
the Company, the Trust and Goldman, Sachs & Co., Credit
Suisse First Boston and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
4.1 Amended and Restated Declaration of Trust, dated as of
June 2, 1999, of the Trust.
4.2 Form of Preferred Security of the Trust (included in
Exhibit 4.1 above).
4.3 Junior Subordinated Indenture, dated as of June 1, 1999,
between the Company and Wilmington Trust Company, as
Trustee.
4.4 Supplemental Indenture No. 1, dated as of June 1, 1999,
providing for the issuance of the Company's 6 1/2% Junior
Subordinated Debentures due 2029.
4.5 Form of 6 1/2% Junior Subordinated Debenture due 2029
(included in Exhibit 4.4 above).
4.6 Guarantee Agreement, dated as of June 2, 1999, relating
to the Trust.
8.1 Opinion of Baker & Botts, L.L.P. as to certain tax
matters.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
POGO PRODUCING COMPANY
Date: June 1, 1999 By: /s/ GERALD A. MORTON
-------------------------------------------
Gerald A. Morton
VICE PRESIDENT-LAW AND CORPORATE SECRETARY
-3-
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Exhibit 1.1
Pogo Producing Company
Pogo Trust I
6.50% CUMULATIVE QUARTERLY INCOME CONVERTIBLE PREFERRED
SECURITIES, SERIES A (LIQUIDATION AMOUNT $50 PER QUIPS)
FULLY AND UNCONDITIONALLY GUARANTEED BY
POGO PRODUCING COMPANY, TO THE EXTENT SET FORTH IN
THE GUARANTEE BY, AND CONVERTIBLE INTO
THE COMMON STOCK, PAR VALUE $1.00
PER SHARE OF, POGO PRODUCING COMPANY
UNDERWRITING AGREEMENT
May 26, 1999
Goldman, Sachs & Co.,
Credit Suisse First Boston
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Pogo Trust I, a Delaware business trust, (the "Trust"), and Pogo
Producing Company (the "Company") a Delaware corporation, as sponsor of the
Trust and as guarantor, propose, subject to the terms and conditions stated
herein, that the Trust issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 3,000,000 6.50% Cumulative Quarterly
Income Convertible Preferred Securities, Series A ("QUIPS"), representing
undivided beneficial interests in the assets of the Trust and with a liquidation
preference $50 per QUIPS (the "Securities"). The Securities are convertible
into common stock, par value $1.00 per share, of the Company ("Common Stock"),
including associated rights, and are guaranteed by the Company as to the payment
obligations of the Securities, to the extent set forth in a guarantee agreement
(the "Guarantee") between the Company and Wilmington Trust Company, as trustee
(the "Guarantee Trustee"). The proceeds of the sale of the Securities will be
invested by the Trust in 6.50% junior subordinated convertible debentures,
Series A due 2029 (the "Debentures") of the Company to be issued pursuant to an
indenture dated as of June 1, 1999 between the Company and Wilmington Trust
Company, as trustee under the Indenture (the "Indenture Trustee"), as
supplemented by Supplemental Indenture No. 1 (as so supplemented, the
"Indenture").
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1. Each of the Company and the Trust represent and warrant to, and
agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File Nos.
333-75105; 333-75105-01 and 333-7501-02) (the "Initial Registration
Statement") in respect of the Securities, the shares of the Common Stock
issuable upon conversion thereof and the Debentures has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and amendments numbers 1 and 2 thereto and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or, to the best of the Company's knowledge,
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the
Act, including the preliminary prospectus supplement dated May 17, 1999,
are hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto (but excluding any
Forms T-1, as amended) and including (i) the information contained in
the form of final prospectus filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof and deemed
by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective and (ii)
the documents incorporated by reference in the prospectus contained in
the Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, each as amended at the time
such part of the Initial Registration Statement became effective or such
part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, as will be supplemented by
the final prospectus supplement thereto, is hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; and any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of
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the Exchange Act after the effective date of the Initial Registration
Statement that is incorporated by reference in the Registration
Statement;
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act, and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman,
Sachs & Co. expressly for use therein;
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were
made not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(d) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein
not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in
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the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and
the Prospectus, there has not been any change in the capital stock
(other than changes in the ordinary course of business in the
issuance of shares of capital stock pursuant to the exercise of
outstanding stock options under the Company's stock option plans) or
long-term debt (except for changes in long-term debt that are not in
excess of $10 million in the aggregate) of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of Delaware, with all requisite corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or be in good standing would not
result in a material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse Effect"),
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction;
(g) The Trust has been duly formed and is validly existing as
a business trust in good standing under the laws of the state of
Delaware with all requisite trust powers and authority to own its
property and conduct its business as described in the Prospectus. The
Trust has conducted no business to date, other than as contemplated by
this Agreement and the Trust Agreement (as defined below), and it will
conduct no business in the future that would be inconsistent with the
description of the Trust set forth in the Prospectus; the Trust is not a
party to or bound by any agreement or instrument other than this
Agreement, the Declaration of Trust dated March 17, 1999 among the
Company, and the Trustees named therein, which will be amended and
restated as contemplated by the Prospectus (the "Trust Agreement"), and
any other agreements contemplated by the Trust Agreement; the Trust has
no liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement, the Trust Agreement and as
described in the Prospectus; the Trust is not and will not based on
current law, be classified as an association taxable as a corporation
for United States federal income tax purposes; and the Trust is not a
party to or subject to any action, suit or proceeding of any nature;
(h) Each corporate "significant subsidiary" of the Company
(as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Significant Subsidiary" and, collectively, the "Designated
Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its
<PAGE>
properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect; all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and (except for directors' qualifying
shares or shares representing an immaterial equity interest that are
required under the laws of any foreign jurisdiction to be owned by
others and except as otherwise set forth in the Prospectus) is owned by
the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
and none of the outstanding shares of capital stock of the Designated
Subsidiaries was issued in violation of any preemptive or similar rights
arising by operation of law, or under the charter or by-laws of any
Significant Subsidiary or under any agreement to which the Company or
any Significant Subsidiary is a party. The subsidiaries of the Company
other than Designated Subsidiaries, considered in the aggregate as a
single subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X;
(i) The Company has authorized, issued and outstanding
capital stock as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization," (except for subsequent
issues, if any, pursuant to employee or director benefit plans referred
to or referenced in documents incorporated by reference into the
Prospectus or pursuant to the exercise of convertible securities or
options referred to or incorporated by reference in the Prospectus) and
all of the issued shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable;
the shares of Common Stock initially issuable upon conversion of the
Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the
provisions of the Securities, will be duly and validly issued, fully
paid and non-assessable and will conform in all material respects to the
description of the Common Stock contained in the Prospectus; and all of
the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors' qualifying shares and except
as otherwise set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(j) The Securities have been duly and validly authorized by
the Trust Agreement and, when issued and delivered pursuant to this
Agreement, will have been duly issued and, subject to the qualifications
set forth herein, fully paid and non-assessable undivided beneficial
interests in the assets of the Trust (except to the extent otherwise
provided in Sections 3.12(c)(iv), 9.02 and 9.08 of the Trust Agreement)
and the Securities will conform in all material respects to the
description thereof in the Prospectus; the issuance of the Securities is
not subject to preemptive or other similar rights; the Securities will
have the rights set forth in the Trust Agreement; the Securityholders
will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware;
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(k) The common securities of the Trust issued to the Company
(the "Trust Common Securities") have been duly and validly authorized by
the Trust Agreement and, when issued and delivered to the Company
against payment therefor as set forth in the Trust Agreement, will be
duly and validly issued and fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and will conform in all
material respects to the description thereof contained in the
Prospectus; the issuance of the Common Trust Securities is not subject
to preemptive or other similar rights; and at the Time of Delivery (as
defined in Section 4 hereof), all of the issued and outstanding Common
Trust Securities will be directly or indirectly owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(l) The issue and sale of the Securities by the Trust, the
purchase of the Debentures by the Trust, the compliance by the Trust
with all of the provisions of this Agreement and the transactions
contemplated herein and in the Prospectus will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under (i) this Agreement or (ii) the Trust
Agreement;
(m) The issue and sale of the Securities and the Common Trust
Securities by the Trust, the issue by the Company of the Guarantee, the
issuance and sale by the Company of the Debentures, and the compliance
by each of the Trust and the Company with the provisions of this
Agreement, the Trust Agreement, the Debentures, the Indenture and the
Guarantee will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any
of the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions
of the certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Guarantee or the Indenture, except
the registration under the Act of the Securities and the shares of
Common Stock issuable upon conversion thereof, the listing of the
Securities and the Common Stock issuable upon conversion of the
Securities on the New York Stock Exchange, such as have been obtained
under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(n) Neither the Company nor any of its Significant
Subsidiaries is in violation of its Certificate of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound;
(o) The statements set forth in the Prospectus (1) under the
caption
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"Description of the QUIPS", "Description of Capital Stock",
"Description of Debentures", and "Description of the Guarantee" insofar
as they purport to constitute a summary of the terms of the Securities
and the Common Stock, (2) under the caption "Federal Income Tax
Consequences", and under the caption "Underwriting," insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(p) Other than as set forth in the Prospectus (including the
Company's Form 10-K for the year ended December 31, 1998 and Form 10-Q
for the quarter ended March 31, 1999), there are no legal or
governmental proceedings pending to which the Trust, or the Company or
any of its subsidiaries is a party or of which any property of the Trust
or the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect on the
Trust or on the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(q) The Debentures have been duly and validly authorized and,
when executed and authenticated pursuant to the Indenture, and issued
and delivered against payment therefor as contemplated by this Agreement
will be duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether such enforcement
is considered in a proceeding in equity or at law); the Indenture has
been fully and validly authorized by the Company, is qualified under,
and complies with, the Trust Indenture Act and, when duly executed and
delivered by the Company and the Trustee, will constitute a valid and
legally binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and the Debentures and
the Indenture will conform in all material respects with the
descriptions thereof contained in the Prospectus;
(r) The Guarantee has been duly and validly authorized by the
Company and, when executed and delivered by the Company as contemplated
by this Agreement, will have been duly executed, issued and delivered,
and will constitute a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law); and
the guarantee conforms in all material respects with the description
thereof contained in the Prospectus;
(s) The Trust Agreement has been duly and validly authorized
by the Company, is qualified under, and complies with, the Trust
Indenture Act and when
<PAGE>
validly executed and delivered by the Company and the trustees
thereto, will constitute a valid and legally binding obligation
of the Company, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles (regardless
of whether such enforcement is considered in a proceeding in equity or
at law); and the Trust Agreement conforms in all material respects to
the description thereof contained in the Prospectus;
(t) Neither the Company nor the Trust is and, after giving
effect to the offering and sale of the Securities, will be an
"investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(u) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(v) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local
or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to possess such
Governmental Licenses, would not, singly or in the aggregate, have a
Material Adverse Effect; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to result in a Material
Adverse Effect;
(w) Each of the Company and its subsidiaries has
(i) satisfactory title to its oil and gas properties, except for any
defects in such title as would not reasonably be expected to have a
Material Adverse Effect, (ii) good and marketable title to all other
real property owned by it to the extent necessary to carry on its
business, and (iii) good and marketable title to all personal property
owned by it, in each case free and clear of all liens, encumbrances and
defects except such as are described or incorporated by reference in the
Prospectus or such as do not materially affect the value of the
properties of the Company and its subsidiaries, considered as one
enterprise, and do not interfere with the use made and proposed to be
made of such properties, by the Company and its subsidiaries, considered
as one enterprise; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Prospectus, are in full force and effect,
and neither the Company nor
<PAGE>
any of its subsidiaries has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights
of the Company or its subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
such the Company or any subsidiary thereof to the continued possession
of the leased or subleased premises under any such lease or sublease;
(x) Except as described in the Prospectus or except for such
matters as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any
judicial or administrative thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or, to the knowledge of the
Company, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental
Law against the Company or its subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or
affecting the Company or its subsidiaries relating to Hazardous
Materials or Environmental Laws;
(y) Within the preceding six months, none of the Trust, the
Company or any other person acting on behalf of the Trust or the Company
(other than the Underwriters, as to whom the Company makes no
representation) has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Underwriters hereunder; and
(z) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder, including,
without limitation, Regulations G, T, U, and X of the Board of Governors
of the Federal Reserve System.
2. Subject to the terms and conditions herein set forth, (a) the
Trust and the Company agree that the Trust shall issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $50.00 per QUIPS, plus accrued
distributions, if any, from June 2, 1999 to the Time of Delivery hereunder, the
number of Securities set forth opposite the name of such Underwriter in Schedule
I hereto; and (b) as compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Securities will be used by the Trust to purchase the Debentures of the Company,
the Company at the Time of Delivery will
<PAGE>
pay to Goldman, Sachs & Co., for the accounts of the several Underwriters, an
amount equal to $1.50 per Security by wire transfer of Federal (same day)
funds for the Securities to be delivered by the Company hereunder at the Time
of Delivery.
3. Upon the authorization by you of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus.
4. (a) (i) The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global Securities in
book-entry form which will be deposited by or on behalf of the Trust with The
Depository Trust Company ("DTC") or its designated custodian. The Company
will deliver each of the global Securities to Goldman, Sachs & Co. for the
account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the Trust's account at Bank of America, Dallas, Texas
(Account No. 375-0015-300) (ABA No. 111-0000-12), by causing DTC to credit
the Securities to the account of Goldman, Sachs & Co. at DTC. The Company
will cause the certificates representing the Securities to be made available
to Goldman, Sachs & Co. for checking at least twenty-four hours prior to the
Time of Delivery (as defined below) at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Securities, 9:30 a.m., New York City
time, on June 2, 1999 or such other time and date as Goldman, Sachs & Co. and
the Company may agree upon in writing. Such time and date for delivery of the
Securities is herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 7 hereof, including
the cross-receipt for the Securities and any additional documents requested
by the Underwriters pursuant to Section 7(l) hereof, will be delivered at the
offices of Baker & Botts, L.L.P., 910 Louisiana, Houston, Texas 77002 (the
"Closing Location"), and the Securities will be delivered at the office of
the DTC or its designated custodian (the "Designated Office") at the Time of
Delivery. A meeting will be held at the Closing Location at 2:00 p.m.,
Houston time, on the Houston Business Day next preceding the Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "Houston Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in Houston are generally authorized or
obligated by law or executive order to close.
5. The Trust and the Company jointly and severally agree with
each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior
to the Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any
<PAGE>
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or
sale of the Securities; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus,
of the suspension of the qualification of the Securities or the shares of
Common Stock issuable upon conversion of the Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, to promptly use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities and the shares of Common
Stock issuable upon conversion of the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(c) Prior to 8:00 a.m., Houston time, on the Houston
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as you may reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the
offering or sale of the Securities and the shares of Stock issuable upon
conversion of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify you and upon your request to file such document and
to prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as you may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Securities and the shares of Common Stock issuable upon conversion
of the Securities at any time nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may request of
an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule 158(c)),
an earnings statement of the Company and its subsidiaries (which
<PAGE>
need not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period of 90 days from the date hereof, not
to sell, offer to sell, grant any option (excluding options granted under the
Company's long-term employee incentive plans) for the sale of, or otherwise
dispose of any Securities, Common Trust Securities or Debentures, any
security convertible into or exchangeable into or exercisable for, the
Securities, Common Trust Securities or the Debentures or any debt
substantially similar to the Debentures or any equity securities
substantially similar to the Securities or the Common Trust Securities
(except as issued hereunder) or any Common Stock (except shares of Common
Stock issuable upon the exercise of options granted under the Company's long
term incentive plans) or any security convertible into or exchangeable into
or exercisable for Common Stock or any equity security substantially similar
to the Common Stock, without your prior written consent;
(f) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, shareholders' equity and cash flows
of the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of two years from the effective date of
the Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver
to you as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which the Securities or any class of securities of the
Company is listed;
(h) If the Company and the Trust elect to rely upon Rule
462(b), the Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act;
(i) To file with the Commission such information on Form
10-Q or Form 10-K as may be required by Rule 463 under the Act and such
information and exhibits on Form 8-K as may be required under the Act;
(j) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to satisfy any obligations to issue shares of its Common Stock upon
conversion of the Securities;
(k) To use reasonable best efforts to list, subject to
notice of issuance, the Securities and the shares of Common Stock issuable
upon conversion of the Securities on the New York Stock Exchange (the
"Exchange");
(l) To use the net proceeds received by it from the sale of
the Securities, in the
<PAGE>
case of the Trust, and the Debentures, in the case of the Company, as
contemplated in this Agreement in the manner specified in the Prospectus as
amended or supplemented under the caption "Use of Proceeds"; and
(m) In the case of the Company, to issue and deliver the
Guarantee and the Debentures concurrently with the issuance and sale of the
Securities.
6. The Trust and the Company jointly covenant and agree with the
several Underwriters that they will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Company's and the Trust's
counsel and accountants in connection with the registration of the Securities
and the shares of Common Stock issuable upon conversion of the Securities
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of reproducing any Agreement among Underwriters, this Agreement, the Trust
Agreement, the Indenture, the Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities and the shares of Common Stock issuable upon conversion of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Securities; (vi) the cost of preparing
the Securities; (vii) the fees and expenses of the Trustee and any agent of
the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which
are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees and expenses of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company and the Trust herein are, at
and as of the Time of Delivery, true and correct, the condition that the
Company and the Trust shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all
<PAGE>
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) Vinson & Elkins L.L.P., counsel for the Underwriters,
shall have furnished to you such written opinion or opinions (a draft of each
such opinion is attached as Annex II(a) hereto), dated the Time of Delivery,
with respect to various matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Richards, Layton & Finger, special Delaware counsel to
the Trust and the Company, shall have furnished to you their written opinion
(a draft of such opinion is attached as Annex II(b) hereto), dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act, and, under the Trust Agreement and
the Delaware Business Trust Act, has the trust power and
authority to own its properties and conduct its business as
described in the Prospectus; and all filings required under the
laws of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made;
(ii) The Trust Agreement constitutes a valid and
binding obligation of the Company and the trustees thereto;
enforceable against the Company and the trustees thereof in
accordance with its terms; and the Securities have the rights
set forth in the Trust Agreement subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iii) Under the Trust Agreement and the Delaware
Business Trust Act, the Trust has the trust power and authority
to (a) execute and deliver, and to perform its obligations
under this Agreement and (b) issue and perform its obligations
under the Securities and the Common Trust Securities;
(iv) The execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary action on
the part of the Trust and this Agreement has been duly
authorized, executed and delivered by the Trust;
(v) The Securities have been duly authorized and
validly issued; the Common Trust Securities have been duly and
validly authorized by the Trust and are duly and validly issued
and, subject to the qualifications set forth herein, fully paid
and non-assessable beneficial interests in the assets of the
Trust; the holders of such Securities, as beneficial owners of
the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State
of Delaware; provided that such counsel may note that such
holders may be obligated, pursuant to the Trust Agreement, to
(a) provide indemnity and/or security in connection with and
pay taxes or governmental charges arising from transfers or
exchanges of certificates and (b) provide security and
indemnity in connection with requests of or directions to the
Trustees to exercise its rights and powers under the Trust
Agreement;
<PAGE>
(vi) Under the Trust Agreement and the Delaware
Business Act, the issuances of the Securities and the Common
Trust Securities are not subject to preemptive or other similar
rights;
(vii) No authorization, approval, consent or order of
any Delaware court or Delaware governmental authority or agency
is required to be obtained by the Trust solely in connection
with the issuance and sale of the securities and the common
securities; and
(viii) The holders of the Securities (other than those
holders who reside or are domiciled in the State of Delaware)
will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the
Trust, and the Trust will not be liable for any income tax
imposed by the State of Delaware.
(d) Baker & Botts, L.L.P., counsel for the Company and the
Trust, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(d) hereto), dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus;
(ii) This Agreement has been duly authorized,
executed and delivered by the Company;
(iii) The Guarantee and the Debentures have been duly
authorized, executed and issued by the Company and (assuming
the due authentication thereof by the Trustee in accordance
with the terms of the Indenture) when delivered and paid for in
accordance with the terms of the Underwriting Agreement, will
constitute valid and legally binding obligations of the
Company; the Debentures are entitled to the benefits provided
by the Indenture; and the Guarantee, the Debentures and the
Indenture conform as to legal matters in all material respects
to the descriptions thereof in the Prospectus;
(iv) The Indenture has been duly authorized, executed
and delivered by the Company and constitutes a valid and
legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and the
Indenture has been duly qualified under the Trust Indenture Act;
(v) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Securities being issued at the Time of Delivery or the
consummation by the Company of the transactions contemplated by
this Agreement, the Guarantee, or the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act,
such as may be required under the Act in connection with the
shares of Stock issuable upon conversion of the Securities and
such consents, approvals,
<PAGE>
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the
Underwriters;
(vi) The statements set forth in the Prospectus under
the caption "Description of the Debentures" "Description of
Capital Stock" and "Description of the QUIPS," insofar as they
purport to describe legal matters, fairly present in all
material respects the matters set forth therein;
(vii) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act; and
(viii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than (a) the
financial statements and related schedules therein, including
the notes thereto and the auditor's report thereon, (b) the
summary reserve report of Ryder Scott Petroleum Engineers
contained therein, (c) the other financial and reserve
information included or incorporated by reference therein and
(d) the exhibits thereto, as to which such counsel need express
no opinion) appeared on the face thereof as of the effective
date of the Registration Statement to be appropriately
responsive in all material respects to the requirements of the
Act and the rules and regulations thereunder; although they do
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus, except to the extent stated in
paragraph (vi) of this Section 7(d), no facts have come to such
counsel's attention which lead such counsel to believe that as
of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to the Time
of Delivery (other than (a) the financial statements and
related schedules therein, including the notes thereto and the
auditor's report thereon, (b) the summary reserve report of
Ryder Scott Petroleum Engineers contained therein, (c) the
other financial and reserve information included or
incorporated by reference therein and (d) the exhibits thereto,
as to which such counsel need not comment) contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than (a)
the financial statements and related schedules therein,
including the notes thereto and the auditor's report therein,
(b) the summary reserve report of Ryder Scott Petroleum
Engineers contained therein, (c) the other financial and
reserve information included or incorporated by reference
therein and (d) the exhibits thereto, as to which such counsel
need not comment) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, and they do not know of
any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be incorporated by reference into the Prospectus or required
to be described in the Registration Statement or the Prospectus
which are not filed or incorporated by reference or described.
<PAGE>
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States, the laws of the State of New York and the General Corporation
Law of the State of Delaware.
(e) Baker & Botts, L.L.P., special tax counsel for the
Company and the Trust, shall have furnished to you their written opinion,
dated the First Time of Delivery, in form and substance satisfactory to you,
to the effect that such firm confirms its opinion set forth in the final
supplemental prospectus under the caption "Federal Income Tax Consequences."
(f) Gerald A. Morton, Vice President - Law and Corporate
Secretary of the Company, shall have furnished to you his written opinion (a
draft of such opinion is attached as Annex 11(e) hereto), dated the Time of
Delivery, in form and substance satisfactory to you to the effect that:
(i) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
and the shares of Common Stock initially issuable upon
conversion of the Securities have been duly and validly
authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Securities,
will be duly and validly issued and fully paid and
non-assessable, and will conform in all material respects to
the description of the Common Stock contained in the
Prospectus;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to
require such qualification or except where any such failure to
qualify would not have a Material Adverse Effect;
(iii) Each Significant Subsidiary of the Company has
been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and
issued, are fully paid and validly xand (except for directors'
qualifying shares or shares representing an immaterial equity
interest that are required under the laws of any foreign
jurisdiction to be owned by others and except as otherwise set
forth in the Prospectus) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances,
equities or claims (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(iv) The issuance of the Guarantee and the Debentures
at the Time of Delivery and the compliance by the Company with
all of the provisions of the Guarantee and the Debentures, the
Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of
its subsidiaries is a party or by
<PAGE>
which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such actions result in
any violation of the provisions of the Restated Certificate of
Incorporation or Amended and Restated By-laws of the Company
or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(v) To his knowledge, there are no legal or
governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to such counsel's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) Neither the Company nor any of its subsidiaries
is in violation of its certificate of incorporation or by-laws
or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it
or any of its properties may be bound;
(vii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which
such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder; and he
has no reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may
be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, or, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and
(viii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations thereunder;
although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, he has no
reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by
the Company prior to the Time of Delivery (other than the
financial statements and related schedules
<PAGE>
therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related
schedules therein and the Forms T-1; as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein and the Forms T-1, in the light of the circumstances under which
they were made, not misleading or that, as of the Time of Delivery,
either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein and the Forms T-1, in the light
of the circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration Statement required
to be filed or of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus or required
to be described in the Registration Statement or the Prospectus which
are not filed or incorporated by reference or described as required.
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States, the laws of the State of New York and the General Corporation Law
of the State of Delaware, except with respect to the matters set forth in (i),
(ii) and (iii) of this Section 7(f).
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at the Time of Delivery, Arthur Andersen LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of the Time of Delivery is
attached as Annex I(b) hereto");
(h) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being issued at the Time of Delivery on the terms and
in the manner contemplated in the
<PAGE>
Prospectus;
(i) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(j) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York or Texas State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of the Underwriters makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being issued at the Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(k) The shares of Common Stock issuable upon conversion of the
Securities will be duly listed, subject to notice of issuance, on the New York
Stock Exchange;
(l) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the Houston
Business Day next succeeding the date of this Agreement;
(m) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of the Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to the Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request; and
(n) During a period of 90 days from the date hereof, the Company and
the Trust will not, without the prior written consent of Goldman, Sachs & Co.,
sell, offer to sell, grant any option (excluding options granted under the
Company's long-term employee incentive plans) for the sale of, or otherwise
dispose of any Securities, Common Trust Securities or Debentures, any security
convertible into or exchangeable into or exercisable for, the Securities, Common
Trust Securities or the Debentures or any debt substantially similar to the
Debentures or any equity securities substantially similar to the Securities or
the Common Trust Securities (except as issued hereunder) or any Common Stock
(except shares of Common Stock issuable upon the exercise of options granted
under the Company's long term incentive plans) or any security convertible into
or exchangeable into or exercisable for Common Stock or any equity security
substantially similar to the Common Stock; and the Company shall have obtained a
written undertaking, for delivery to the Underwriters, signed by each director
and officer of the Company stating that such officer or director has agreed to
be bound by this provision.
8. (a) The Company and the Trust will jointly and severally
indemnify and hold
<PAGE>
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through Goldman, Sachs & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Trust against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Goldman, Sachs
& Co. expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any
<PAGE>
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Trust on the one hand and the
Underwriters on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Trust on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Trust on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Trust bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Trust on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by PRO RATA allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Trust under this Section 8
shall be in addition to any liability which the Company and the Trust may
otherwise have and shall extend,
<PAGE>
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and
the Trust (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company) and to
each person, if any, who controls the Company or the Trust within the meaning
of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein at a Time of Delivery. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Securities, then the Company and the Trust shall be
entitled to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to you to purchase such Securities on such
terms. In the event that, within the respective prescribed periods, you notify
the Company and the Trust that you have so arranged for the purchase of such
Securities, or the Company or the Trust notifies you that it has so arranged for
the purchase of such Securities, you or the Company or the Trust shall have the
right to postpone the Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company or the Trust as provided in subsection (a) above, the aggregate number
of such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Securities to be purchased at the Time of Delivery,
then the Company and the Trust shall have the right to require each
non-defaulting Underwriter to purchase the number of Securities which such
Underwriter agreed to purchase hereunder at the Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Securities which such Underwriter agreed to
purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company or the Trust as provided in subsection (a) above, the aggregate number
of Securities which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Securities to be purchased at the Time of Delivery, or if the
Company or the Trust shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Securities of a
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Company or the Trust, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
<PAGE>
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Trust and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, the Company or the Trust, or any officer or director or controlling
person of the Company or the Trust, and shall survive delivery of and payment
for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company and the Trust shall not then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any other
reason, any Securities are not delivered by or on behalf of the Trust as
provided herein, the Company and the Trust will jointly and severally reimburse
the Underwriters through you for all out-of-pocket expenses approved in writing
by you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company shall then be under no further liability to any
Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Underwriters in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention: Registration
Department; if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary and if to the Trust shall be
delivered or sent by mail, telex or facsimile transmission to (713) 297-4970;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Trust, the Company and, to the extent provided
in Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business, unless otherwise specified.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH
<PAGE>
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company, the Trust and each of the Underwriters
plus one for each counsel counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
POGO TRUST I
BY: _____________________________
NAME:
TITLE:
POGO PRODUCING COMPANY
BY: _____________________________
NAME:
TITLE:
ACCEPTED AS OF THE DATE HEREOF:
GOLDMAN, SACHS & CO.
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BY: _____________________________
(GOLDMAN, SACHS & CO.)
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ----------
<S> <C>
Goldman, Sachs & Co. 1,950,000
Credit Suisse First Boston 525,000
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 525,000
Total
3,000,000
</TABLE>
<PAGE>
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
or the Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies
of which have been [SEPARATELY] furnished to the representatives of the
Underwriters (the "Representatives")[AND ARE ATTACHED HERETO];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statement of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form
10-Q incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which [HAVE BEEN SEPARATELY FURNISHED TO THE
REPRESENTATIVES][ARE ATTACHED HERETO]; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in the related in all
material respects with the applicable accounting requirements of the
[ACT AND THE EXCHANGE] Act and the related published rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable
accounting requirements of the [ACT AND THE EXCHANGE] Act and the
related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by
<PAGE>
reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated
financial statements for such five fiscal years which were included
or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus
and/or included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data
<PAGE>
and balance sheet items included in the Prospectus
and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the
audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes in
the consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except
in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E) there
were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with the comparable period of the preceding year
and with any other period of corresponding length specified by
the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the
<PAGE>
Company and its subsidiaries and have found them to be in agreement.
<PAGE>
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
POGO TRUST I
---------------------------------------
Dated as of June 2, 1999
---------------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
ARTICLE 1
DEFINITIONS
<S> <C>
SECTION 1.01. Definitions...........................................................2
Affiliate.....................................................................2
Book Entry Interest...........................................................2
Business Day..................................................................2
Business Trust Act............................................................3
Certificate...................................................................3
Certificate of Trust..........................................................3
Clearing Agency...............................................................3
Clearing Agency Participant...................................................3
Closing Date..................................................................3
Code .......................................................................3
Commission....................................................................3
Common Securities.............................................................3
Common Security Certificate...................................................3
Common Stock..................................................................3
Conversion Agent..............................................................3
Covered Person................................................................3
Creditor......................................................................3
Debenture Trustee.............................................................4
Debentures....................................................................4
Definitive Preferred Security Certificates....................................4
Delaware Trustee..............................................................4
Depositary Agreement..........................................................4
Distribution..................................................................4
DTC .......................................................................4
Event of Default..............................................................4
Exchange......................................................................4
Exchange Act..................................................................4
Fiscal Year...................................................................4
Global Certificate............................................................4
Holder .......................................................................4
Holder Direct Action..........................................................4
Indemnified Person............................................................4
Indenture.....................................................................4
</TABLE>
- --------
*This Table of Contents does not constitute part of the Amended and Restated
Declaration of Trust and should not have any bearing upon the interpretation of
any of its terms or provisions.
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Indenture Event of Default....................................................5
Investment Company............................................................5
Investment Company Act........................................................5
Legal Action..................................................................5
Liquidation Distribution......................................................5
List of Holders...............................................................5
Majority in liquidation amount of the Securities..............................5
NASD .......................................................................5
Nasdaq .......................................................................5
1933 Act Registration Statement...............................................5
1934 Act Registration Statement...............................................5
Officers' Certificate.........................................................5
Opinion of Counsel............................................................6
Original Declaration..........................................................6
Paying Agent..................................................................6
Payment Amount................................................................6
Person .......................................................................6
Pogo .......................................................................6
Preferred Securities Guarantee................................................6
Preferred Securities..........................................................6
Preferred Security Beneficial Owner...........................................6
Preferred Security Certificate................................................6
Property Trustee..............................................................7
Property Account..............................................................7
Quorum .......................................................................7
Regular Trustee...............................................................7
Related Party.................................................................7
Resignation Request...........................................................7
Responsible Officer...........................................................7
Rule 3a-5.....................................................................7
Rule 3a-7.....................................................................7
Securities....................................................................7
Securities Act................................................................7
Special Event.................................................................7
Sponsor or Pogo...............................................................7
Successor Delaware Trustee....................................................7
Successor Entity..............................................................8
Successor Property Trustee....................................................8
Successor Securities..........................................................8
Super Majority................................................................8
Supplemental Indenture........................................................8
10% in liquidation amount of the Securities...................................8
Treasury Regulations..........................................................8
Trust .......................................................................8
</TABLE>
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<TABLE>
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Trustee.......................................................................8
Trustees......................................................................8
Trust Indenture Act...........................................................8
Underwriting Agreement........................................................8
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application......................................9
SECTION 2.02. Lists of Holders of Preferred Securities..............................9
SECTION 2.03. Reports by the Property Trustee.......................................9
SECTION 2.04. Periodic Reports to the Property Trustee.............................10
SECTION 2.05. Evidence of Compliance with Conditions Precedent.....................10
SECTION 2.06. Events of Default; Waiver............................................10
SECTION 2.07. Disclosure of Information............................................12
ARTICLE 3
ORGANIZATION
SECTION 3.01. Name.................................................................12
SECTION 3.02. Office...............................................................12
SECTION 3.03. Issuance of the Securities...........................................12
SECTION 3.04. Purchase of Debentures...............................................13
SECTION 3.05. Purpose..............................................................13
SECTION 3.06. Authority............................................................13
SECTION 3.07. Title to Property of the Trust.......................................14
SECTION 3.08. Powers and Duties of the Regular Trustees............................14
SECTION 3.09. Prohibition of Actions by the Trust and the Trustees.................16
SECTION 3.10. Powers and Duties of the Property Trustee............................17
SECTION 3.11. Delaware Trustee.....................................................20
SECTION 3.12. Certain Rights and Duties of the Property Trustee....................20
SECTION 3.13. Registration Statement and Related Matters...........................23
SECTION 3.14. Filing of Amendments to Certificate of Trust.........................24
SECTION 3.15. Execution of Documents by the Regular Trustees.......................24
SECTION 3.16. Trustees Not Responsible for Recitals or Issuance of Securities......24
SECTION 3.17. Duration of the Trust................................................24
SECTION 3.18. Mergers..............................................................24
SECTION 3.19. Property Trustee May File Proofs of Claim............................26
</TABLE>
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<TABLE>
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ARTICLE 4
SPONSOR
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SECTION 4.01. Purchase of Common Securities by the Sponsor.........................27
SECTION 4.02. Expenses.............................................................27
ARTICLE 5
TRUSTEES
SECTION 5.01. Number of Trustees; Qualifications...................................28
SECTION 5.02. Appointment, Removal and Resignation of the Trustees.................30
SECTION 5.03. Vacancies among the Trustees.........................................31
SECTION 5.04. Effect of Vacancies..................................................31
SECTION 5.05. Meetings.............................................................32
SECTION 5.06. Delegation of Power..................................................32
SECTION 5.07. Merger, Conversion, Consolidation or Succession to Business..........32
ARTICLE 6
DISTRIBUTIONS
SECTION 6.01. Distributions........................................................33
ARTICLE 7
ISSUANCE OF THE SECURITIES
SECTION 7.01. General Provisions Regarding the Securities..........................33
SECTION 7.02. Conversion Agent.....................................................35
ARTICLE 8
DISSOLUTION OF THE TRUST
SECTION 8.01. Dissolution of the Trust.............................................35
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.01. Transfer of Securities...............................................36
SECTION 9.02. Transfer of Certificates.............................................36
SECTION 9.03. Deemed Security Holders..............................................37
SECTION 9.04. Book Entry Interests.................................................37
SECTION 9.05. Notices to Holders of Certificates...................................38
SECTION 9.06. Appointment of Successor Clearing Agency.............................38
</TABLE>
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<TABLE>
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SECTION 9.07. Definitive Preferred Securities Certificates.........................38
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen Certificates....................38
ARTICLE 10
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.01. Exculpation.........................................................39
SECTION 10.02. Indemnification.....................................................39
SECTION 10.03. Outside Business....................................................40
ARTICLE 11
ACCOUNTING
SECTION 11.01. Fiscal Year.........................................................40
SECTION 11.02. Certain Accounting Matters..........................................40
SECTION 11.03. Banking.............................................................41
SECTION 11.04. Withholding.........................................................41
ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.01. Amendments..........................................................42
SECTION 12.02. Meetings of the Holders of Securities; Action by Written Consent....43
ARTICLE 13
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 13.01. Representations and Warranties of the Property Trustee..............44
SECTION 13.02. Representations and Warranties of the Delaware Trustee..............45
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. Notices.............................................................46
SECTION 14.02. Undertaking for Costs...............................................47
SECTION 14.03. Governing Law.......................................................47
SECTION 14.04. Headings............................................................48
SECTION 14.05. Partial Enforceability..............................................48
SECTION 14.06. Counterparts........................................................48
SECTION 14.07. Intention of the Parties............................................48
SECTION 14.08. Successors and Assigns..............................................48
SECTION 14.09. No Recourse.........................................................48
</TABLE>
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<TABLE>
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SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
</TABLE>
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
POGO TRUST I
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated and
effective as of June 2, 1999 by John O. McCoy, Jr., an individual, John W.
Elsenhans, an individual, and Gerald A. Morton, an individual, as Regular
Trustees (the "Regular Trustees"), Wilmington Trust Company, as Property Trustee
(the "Property Trustee") and Wilmington Trust Company, as Delaware Trustee (the
"Delaware Trustee") (together with all other Persons from time to time duly
appointed and serving as trustees in accordance with the provisions of this
Declaration, the "Trustees"), Pogo Producing Company, a Delaware corporation, as
trust sponsor ("Pogo" or the "Sponsor"), and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a
Declaration of Trust dated as of March 17, 1999 (the "Original Declaration") in
order to establish Pogo Trust I, a statutory business trust (the "Trust"), under
the Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the
Trust was filed with the office of the Secretary of State of the State of
Delaware on March 18, 1999; and
WHEREAS, the Trustees and the Sponsor desire to continue the Trust
pursuant to the Business Trust Act for the purpose of, as described more fully
in Sections 3.03 and 3.04 hereof, (i) issuing and selling Preferred Securities
(as hereinafter defined) representing preferred undivided beneficial interests
in the assets of the Trust for cash and investing the proceeds thereof in
Debentures (as hereinafter defined) of Pogo issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as hereinafter defined) representing common undivided
beneficial interests in the assets of the Trust to Pogo in exchange for cash and
investing the proceeds thereof in additional Debentures issued under the
Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Act, that the
Original Declaration be amended and restated in its entirety as provided herein
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all Debentures referred to in clauses (i) and
(ii) of the previous paragraph purchased by the Trust will be held for the
benefit of the Holders (as hereinafter defined) from time to time, of the
Certificates (as hereinafter defined) representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the provisions
of this Declaration.
<PAGE>
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and C hereto
(the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections and Exhibits
are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of this definition, beneficial ownership of 10% or more
of the voting common equity (on a fully diluted basis) or options or warrants to
purchase such equity (but only if exercisable at the date of determination or
within 60 days thereof) of a Person shall be deemed to constitute control of
such Person. No Person shall be deemed an Affiliate of an oil and gas royalty
trust solely by virtue of ownership of units of beneficial interest in such
trust.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Borough of Manhattan, The City and State of
New York, Wilmington, Delaware or Houston, Texas are authorized or required by
law or executive order to close.
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<PAGE>
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Certificate of Trust" has the meaning set forth in the second WHEREAS
clause above.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depository
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means June 2, 1999, which date is also the date of
execution and delivery of this Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section (Sec.) of
the Code refers not only to such specific section but also to any corresponding
provision of any Federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
"Common Stock" means the common stock, par value $1.00 per share, of
Pogo including associated preferred share purchase rights, or any other class of
stock, other securities, cash or other assets into which the Debentures are then
convertible.
"Conversion Agent" has the meaning specified in Section 7.02.
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of Pogo or of any of its Affiliates and (iii) the Holders from time to
time of the Securities.
"Creditor" has the meaning specified in Section 4.02(c).
3
<PAGE>
"Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder and thereafter means such successor trustee.
"Debentures" means the series of junior subordinated debentures issued
by Pogo under the Indenture to the Property Trustee and entitled the "6 1/2%
Junior Subordinated Convertible Debentures, Series A due 2029".
"Definitive Preferred Security Certificates" has the meaning set forth
in Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended or
supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means that an Indenture
Event of Default has occurred and is continuing with respect to the Debentures.
"Exchange" has the meaning specified in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Holder Direct Action" has the meaning specified in Section 3.10(e).
"Indemnified Person" means any Trustee, any Affiliate of any Trustee,
any Conversion Agent, any Paying Agent, any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trustee,
Conversion Agent or Paying Agent, or any employee or agent of the Trust or of
any of its Affiliates.
"Indenture" means the Junior Subordinated Indenture dated as of June 1,
1999 between Pogo and the Debenture Trustee as supplemented by Supplemental
Indenture No. 1 thereto dated as of June 1, 1999, pursuant to which the
Debentures are to be issued.
4
<PAGE>
"Indenture Event of Default" means that an event or condition defined
as an "Event of Default" with respect to the Debentures under Section 6.01(a)
of the Indenture and Section 2.10 of the Supplemental Indenture has occurred
and is continuing.
"Investment Company" means an "investment company" as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and C
hereto establishing the terms of the Securities.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of section 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"NASD" has the meaning specified in Section 3.13.
"Nasdaq" has the meaning specified in Section 3.13.
"1933 Act Registration Statement" has the meaning specified in Section
3.13.
"1934 Act Registration Statement" has the meaning specified in Section
3.13.
"Officers' Certificate" means a certificate signed by the Chairman of the Board,
the Chief Executive Officer, the President or a Vice President, and by the
Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary of the Sponsor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 2.04 shall be the principal executive, financial or
accounting officer of the Sponsor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
5
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Sponsor, which may be an
employee of the Sponsor but not an employee of the Trust or the Property
Trustee, and who shall be reasonably acceptable to the Property Trustee. Any
Opinion of Counsel pertaining to federal income tax matters may rely on
published rulings of the Internal Revenue Service.
"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Pogo" or "Sponsor" means Pogo Producing Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Preferred Securities Guarantee" means the Guarantee Agreement dated as
of June 2, 1999 of Pogo and Wilmington Trust Company as initial guarantee
trustee thereunder, in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Annex I to Exhibit B.
6
<PAGE>
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.01(c) and having the duties set forth for
the Property Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and
the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of
Pogo or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of Pogo.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, when used with respect to the Property
Trustee, any officer within the corporate department of the Property Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Property Trustee
who customarily performs functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such Person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Declaration.
"Rule 3a-5" Means Rule 3a-5 under the Investment Company Act or any
successor rule thereunder.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities
as set forth in section 4 of Exhibits B and C hereto.
"Sponsor or Pogo" Pogo Producing Company, a Delaware corporation, or any
successor entity resulting from any merger, consolidation, amalgamation or other
business combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Entity" has the meaning specified in Section 3.18(b)(i).
7
<PAGE>
"Successor Property Trustee" has the meaning specified in Section
5.02(b)(i).
"Successor Securities" has the meaning specified in Section
3.18(b)(i)(B).
"Super Majority" has the meaning specified in Section 2.06(a)(ii).
"Supplemental Indenture" means Supplemental Indenture No. 1 dated as of
June 1, 1999 between Pogo and the Debenture Trustee, pursuant to which the
Debentures are to be issued.
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of section 6 of Exhibit B hereto, Holder(s) of outstanding Securities
voting together as a single class or, as the context may require, Holder(s) of
outstanding Preferred Securities or Common Securities, voting separately as a
class, who are the record owners of a relevant class of Securities whose
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) represents 10% or
more of the liquidation amount of all outstanding Securities of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" has the meaning set forth in the first WHEREAS clause above.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated as of
May 26, 1999 among the Trust, the Sponsor and Goldman Sachs & Co., Credit Suisse
First Boston and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
8
<PAGE>
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law
and/or the rules and regulations of the Commission, shall be the only Trustee
which is a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.02. Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee unless the Property Trustee is
registrar for the Securities, (i) on each regular record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such record date, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more
than 15 days before such List of Holders is given to the Property Trustee,
provided that neither the Sponsor nor the Regular Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any time that the
List of Holders does not differ from the most recent List of Holders given to
the Property Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under ss.ss.
310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee.
Within 60 days after May 15 of each year, commencing May 15, 2000, the
Property Trustee shall provide to the Holders of the Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form, in the
manner and at the times provided by ss. 313 of the Trust
9
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Indenture Act. The Property Trustee shall also comply with the requirements of
ss. 313(d) of the Trust Indenture Act. A copy of each such report shall, at the
time of such transmission to Holders, be filed by the Property Trustee with the
Company, with each stock exchange upon which any Preferred Securities are listed
(if so listed) and also with the Commission. The Company agrees to notify the
Property Trustee when any Preferred Securities become listed on any stock
exchange and of any delisting thereof.
SECTION 2.04. Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as required
by ss. 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by ss. 314(a)(4) and (c) of the Trust Indenture Act, any
such certificates to be provided in the form, in the manner and at the times
required by ss. 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to ss. 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each Fiscal Year).
SECTION 2.05. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration which relate to any of the
matters set forth in ss. 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to ss. 314(c) may be given
in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at
least the proportion in aggregate liquidation amount of the Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
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such default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event of Default
under this Declaration as provided above in Section 2.06(a) or below in
this Section 2.06(b), the Event of Default under this Declaration shall
also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under this Declaration as provided above in
Section 2.06(a) or below in this Section 2.06(b), the Event of Default
under this Declaration may only be waived by the vote of the Holders of
at least the proportion in aggregate liquidation amount of the Common
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided, further, that the Holders of Common Securities will be deemed to have
waived any such Event of Default and all Events of Defaults with respect to the
Common Securities and their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. In the event that any Event
of Default with respect to the Preferred Securities is waived by the Holders of
Preferred Securities as provided in this Declaration, the Holders of Common
Securities agree that such waiver shall also constitute the waiver of such Event
of Default with respect to the Common Securities for all purposes under this
Declaration without any further act, vote or consent of the Holders of the
Common Securities. Subject to the foregoing provisions of this Section 2.06(b),
upon waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of
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this Declaration, but no such waiver shall extend to any subsequent or other
default or Event of Default with respect to the Common Securities or impair any
right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of Preferred Securities, constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.07. Disclosure of Information.
The disclosure of information as to the names and addresses of the
Holders of the Securities in accordance with ss. 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted which
does not specifically refer to ss. 312 of the Trust Indenture Act, nor shall the
Property Trustee be held accountable by reason of mailing any material pursuant
to a request made under ss. 312(b) of the Trust Indenture Act.
ARTICLE 3
ORGANIZATION
SECTION 3.01. Name.
The Trust continued by this Declaration is named "Pogo Trust I" as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.02. Office.
The address of the principal office of the Trust is c/o Pogo Producing
Company, 5 Greenway Plaza, Suite 2700, Houston, Texas 77046. Upon ten days'
written notice to the Holders, the Regular Trustees may change the location of
the Trust's principal office.
SECTION 3.03. Issuance of the Securities.
On May 26, 1999 the Sponsor, on behalf of the Trust and pursuant to the
Original Declaration, executed and delivered the Underwriting Agreement. On the
Closing Date and contemporaneously with the execution and delivery of this
Declaration, the Regular Trustees, on behalf of the Trust, shall execute and
deliver (i) one or more Global Certificates, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04 for the
benefit of the
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underwriters named in the Underwriting Agreement, in an aggregate amount of
3,000,000 Preferred Securities having an aggregate liquidation amount of
$150,000,000, against receipt of the aggregate purchase price of such Preferred
Securities of $150,000,000, and (ii) to the Sponsor, one or more Common
Securities Certificates, registered in the name of the Sponsor, in an aggregate
amount of 92,800 Common Securities having an aggregate liquidation amount of
$4,640,000, against receipt of the aggregate purchase price of such Common
Securities of $4,640,000.
SECTION 3.04. Purchase of Debentures.
On the Closing Date and contemporaneously with the execution and
delivery of this Declaration, the Regular Trustees, on behalf of the Trust,
shall purchase from the Sponsor with the proceeds received by the Trust from the
sale of the Securities on such date pursuant to Section 3.03, at a purchase
price of 100% of the principal amount thereof, Debentures, registered in the
name of the Property Trustee and having an aggregate principal amount equal to
$154,640,000, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor the sum of $154,640,000.
SECTION 3.05. Purpose.
The exclusive purposes and functions of the Trust are: (a)(i) to issue
and sell Preferred Securities for cash and use the proceeds of such sales to
acquire from Pogo Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; and (iii) to
issue and sell Common Securities to Pogo for cash and use the proceeds of such
sale to purchase as trust assets an equal aggregate principal amount of
Debentures issued under the Indenture; and (b) except as otherwise limited
herein, to engage in only those other activities necessary, convenient or
incidental thereto, including such other activities specifically authorized in
this Declaration. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, mortgage or pledge any of its assets or at
any time while the Securities are outstanding, otherwise undertake (or permit to
be undertaken) any activity that would result in or cause the Trust not to be
classified for United States Federal income tax purposes as a grantor trust.
SECTION 3.06. Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into
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the authority of the Trustees to bind the Trust. Persons dealing with the Trust
are entitled to rely conclusively on the power and authority of the Trustees as
set forth in this Declaration.
SECTION 3.07. Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the Debentures and
the Property Account or unless otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have
undivided beneficial interests in the assets of the Trust.
SECTION 3.08. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority and duty
to cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to a one-time, simultaneous issuance of both Preferred Securities and
Common Securities on the Closing Date.
(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 3.13 and to
execute, deliver and perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale
of the Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to all of the Debentures to be
vested in, and the Debentures to be held of record in the name of, the Property
Trustee for the benefit of the Holders of the Preferred Securities and the
Common Securities;
(d) if and to the extent that the Sponsor on behalf of the Trust has not
already done so, to cause the Trust to enter into the Underwriting Agreement and
such other agreements and arrangements as may be necessary or desirable in
connection with the sale of the Preferred Securities to the initial purchasers
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of ss. 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices
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to Holders of the Preferred Securities and Common Securities as to such actions
and applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by ss.
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities, the Regular Trustees hereby initially
appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in Exhibits B
and C hereto;
(n) to take all actions which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(o) to take all actions, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the purposes of the Trust and the
activities of the Trust as set out in this Section 3.08, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States Federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures
will be treated as indebtedness of the Sponsor for United States Federal
income tax purposes;
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(p) to take all actions necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust,
and to comply with any requirements imposed by any taxing authority on holders
of instruments treated as indebtedness for United States Federal income tax
purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule 3a-7) and
ss. 317(b) of the Trust Indenture Act, to appoint one or more Paying Agents in
addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all duties and
powers and do all things for and on behalf of the Trust in all matters necessary
or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.08 in a manner which is consistent with the purposes and functions of the
Trust set out in Section 3.05, and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none of
the powers or any of the authority of the Property Trustee set forth in Section
3.10.
The Regular Trustees shall take all actions on behalf of the Trust that
are not specifically required by this Declaration to be taken by any other
Trustee.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.08 shall be reimbursed by the Sponsor.
SECTION 3.09. Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than in connection
with the purposes of the Trust or other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute from the Property Account all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and of the
Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
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(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever, except as otherwise
expressly provided herein;
(f) issue any securities or other evidences of beneficial ownership of,
or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Debenture Trustee or exercising any trust or
power conferred upon the Debenture Trustee with respect to the Debentures, (ii)
waive any past default that is waivable under Section 6.06 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the Debentures, without, in each case,
obtaining the prior approval of the Holders of a Majority in liquidation amount
of all outstanding Securities;
(i) revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities except by subsequent vote of such Holders;
(j) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required, unless in the
case of this clause (j) the Property Trustee shall have received an Opinion of
Counsel experienced in such matters to the effect that such amendment,
modification or termination will not cause more than an insubstantial risk that
for United States Federal income tax purposes the Trust will not be classified
as a grantor trust;
(k) take or consent to any action that would result in the placement of a
lien, pledge, charge, mortgage or other encumbrance on any of the Trust
property;
(l) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(m) after the date hereof, enter into any contract or agreement (other
than any depositary agreement or any agreement with any securities exchange or
automated quotation system) that does not expressly provide that the Holders of
Preferred Securities, in their capacities as such, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust, which express provision shall be in substantially
the following form, "The Holders of the Preferred Securities, in their
capacities as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and the parties hereto
hereby agree that the Holders of the Preferred Securities, in their capacities
as such, shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware."
SECTION 3.10. Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and
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interest of the Property Trustee to the Debentures shall vest automatically in
each Person who may hereafter be appointed as Property Trustee in accordance
with Article 5. Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Debentures have been executed
and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee does not
also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the
Securities and on the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the
Property Account and, without any further acts of the Property Trustee or
the Regular Trustees, promptly make payments to the Holders of the
Preferred Securities and Common Securities from the Property Account in
accordance with Section 6.01. Funds in the Property Account shall be held
uninvested, and without liability for interest thereon, until disbursed
in accordance with this Declaration. The Property Account shall be an
account which is maintained with a banking institution whose long term
unsecured indebtedness is rated by a "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act, at least investment grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary
or appropriate to effect promptly pursuant to terms of the Securities the
distribution of Debentures to Holders of Securities upon the election of
the Holder of Common Securities to distribute the Debentures to Holders
of Securities and dissolve the Trust; and
(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject
to Section 3.10(e), shall for the benefit of the Holders of the
Securities, enforce its rights as holder of the Debentures under the
Indenture, subject to the rights of the Holders of the Preferred
Securities pursuant to the terms of this Declaration, the Business Trust
Act and the Trust Indenture Act.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
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(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of the Preferred Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee or to direct the exercise of
any trust or power conferred upon the Property Trustee under this Declaration,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures. If the Property Trustee fails to
enforce its rights under the Debentures, a Holder of Preferred Securities, to
the extent permitted by applicable law, may, after a period of 30 days has
elapsed since such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against the Sponsor to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
Person; provided further, that, if an Event of Default has occurred and is
continuing and such event is attributed to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Holder Direct Action") on or
after the respective due date specified in the Debentures. In connection with
such Holder Direct Action, the Sponsor will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Sponsor
to such Holders of Preferred Securities in such Holder Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the Holders of
the Debentures.
(f) All moneys deposited in the Property Account and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities will
not be subject to any right, charge, security interest, lien or claim of any
kind in favor of, or for the benefit of the Property Trustee or its agents or
their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities actually known to a Responsible Officer
of the Property Trustee, transmit by mail, first class postage prepaid, to the
holders of the Securities, as their names and addresses appear upon the
register, notice of such defaults with respect to the Securities known to the
Property Trustee, unless such defaults shall have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 3.10(g)
being hereby defined to be an Indenture Event of Default, not including any
periods of grace provided for in the Indenture and irrespective of the giving of
any notice provided therein); provided, that, except in the case of default in
the payment of the principal of (or premium, if any) or interest on any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers, of the Property Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Securities. The Property Trustee shall not be deemed to have
knowledge of any default, except (i) a default in the payment of principal,
premium or interest on the Debentures or (ii) any default as to which the
Property Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Declaration shall have obtained written
notice.
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(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the terms of
the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and, if the Preferred Securities are not in book entry only
form, the Preferred Securities and, subject to Section 3.08(q), may authorize
one or more Persons (each, a "Paying Agent") to pay Distributions, redemption
payments or liquidation payments on behalf of the Trust with respect to the
Preferred Securities. Any such Paying Agent shall comply with ss. 317(b) of the
Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee,
after consultation with the Regular Trustees, at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the Property
Trustee, subject to Section 3.08(q).
(j) The Property Trustee shall give prompt written notice to the
Holders of the Securities of any notice received by it from Pogo of (i) its
election to defer payments of interest on the Debentures by extending the
interest payment period with respect thereto or (ii) the shortening of the
maturity date of the Debentures in accordance with the terms of the
Supplemental Indenture.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.08.
(l) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and Section 3.12 in a manner which is consistent with
the purposes and functions of the Trust set out in Section 3.05, and the
Property Trustee shall not take any action which is inconsistent with the
purposes and functions of the Trust set forth in Section 3.05.
SECTION 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.01(a)(3), the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration. Except as set
forth in Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of ss. 3807(a) of the
Business Trust Act. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
SECTION 3.12. Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or
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waived pursuant to Section 2.06), the Property Trustee shall exercise such of
the rights and powers vested in it by this Declaration, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration,
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property Trustee;
and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Property Trustee and conforming to the requirements of this
Declaration; provided, however, that in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Property Trustee hereunder or under the Indenture, or exercising any
trust or power conferred upon the Property Trustee under this
Declaration; and
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Declaration or
adequate indemnity against such risk or liability is not reasonably
assured to it.
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(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the
Trust is excluded from the definition of Investment Company solely by
means of Rule 3a-7, subject to the requirements of Rule 3a-7, request and
rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the Regular Trustees;
(ii) the Property Trustee (A) may consult with counsel (which may
be counsel to the Sponsor or any of its Affiliates and may include any of
its employees) selected by it in good faith and with due care and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion and (B)
shall have the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent
jurisdiction;
(iii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have offered
to the Property Trustee security and indemnity satisfactory to the
Property Trustee against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction; provided that nothing contained in this
clause (iv) shall relieve the Property Trustee of the obligation, upon
the occurrence of an Event of Default (which has not been cured or
waived) to exercise such of the rights and powers vested in it by this
Declaration, and to use the same degree of care and skill in this
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; and
(v) any action taken by the Property Trustee or its agents
hereunder shall bind the Holders of the Securities, and the signature of
the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party shall be
required to inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action.
(d) The Property Trustee, in its individual or any other capacity, may
become the owner or pledgee of Preferred Securities and may otherwise deal with
the Sponsor with the same rights it would have if it were not the Property
Trustee.
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(e) All moneys received by the Property Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by law. The Property Trustee shall be under no liability for interest
on any moneys received by it hereunder except such as it may agree in writing to
pay thereon.
(f) Whether or not expressly stated, every provision of this Declaration
pertaining to the Property Trustee shall be subject to this Section 3.12.
SECTION 3.13. Registration Statement and Related Matters.
In accordance with the Original Declaration, Pogo, as the sponsor of the
Trust, was authorized (i) to file with the Commission and execute, in each case
on behalf of the Trust, (a) the Registration Statement on Form S-3 (Registration
Nos. 333-75105, 333-75105-01 and 333-75105-02) (the "1933 Act Registration
Statement") including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the Preferred
Securities and (b) if Pogo shall deem it desirable, a Registration Statement on
Form 8-A or other appropriate form (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities under Section 12 of the Exchange
Act; (ii) if Pogo shall deem it desirable, to prepare and file with the New York
Stock Exchange or one or more national securities exchange(s) (each, an
"Exchange") or the National Association of Securities Dealers, Inc. (the "NASD")
and execute on behalf of the Trust a listing application or applications and all
other applications, statements, certificates, agreements and other instruments
as shall be necessary or desirable to cause the Preferred Securities to be
listed on any such Exchange or the NASD's Nasdaq National Market ("Nasdaq");
(iii) to file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of
process and all other papers and documents as Pogo, on behalf of the Trust, may
deem necessary or desirable to register the Preferred Securities under the
securities or "Blue Sky" laws of such jurisdictions as Pogo on behalf of the
Trust, may deem necessary or desirable; and (iv) to negotiate the terms and
execute on behalf of the Trust the Underwriting Agreement. In the event that any
filing referred to in clauses (i)-(iii) above is required by the rules and
regulations of the Commission, any Exchange, Nasdaq, the NASD or state
securities or blue sky laws, to be executed on behalf of the Trust by the
Trustees, the Regular Trustees, in their capacities as Trustees of the Trust,
and Pogo are hereby authorized and directed to join in any such filing and to
execute on behalf of the Trust any and all of the foregoing, it being understood
that the Property Trustee and the Delaware Trustee, in their capacities as
Trustees of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, any Exchange, Nasdaq, the NASD or state
securities or blue sky laws. In connection with all of the foregoing, Pogo and
each Trustee, solely in its capacity as Trustee of the Trust, by execution of
this Declaration have constituted and appointed, and hereby confirm the
appointment of, John O. McCoy, Jr., John W. Elsenhans and Gerald A. Morton and
each of them, as his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for Pogo or such Trustee or in Pogo's or such Trustee's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-
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effective amendments) to the 1933 Act Registration Statement and the 1934 Act
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as Pogo or such Trustee might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
SECTION 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the
State of Delaware on March 18, 1999 is attached hereto as Exhibit A. On or after
the date of execution of this Declaration, the Trustees shall cause the filing
with the Secretary of State of the State of Delaware of such amendments, if any,
to the Certificate of Trust as the Trustees shall deem necessary or desirable.
SECTION 3.15. Execution of Documents by the Regular Trustees.
Except as otherwise required by the Business Trust Act with respect to
the Certificate of Trust or otherwise and except as provided in Sections 7.01(c)
and 9.08, any Regular Trustee, or if there is only one, such Regular Trustee is
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
SECTION 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.17. Duration of the Trust.
The Trust, absent dissolution pursuant to the provisions of Article 8
hereof, shall continue without dissolution until December 31, 2053.
SECTION 3.18. Mergers.
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, except as described in
Section 3.18(b) and (c) of this Declaration.
(b) The Trust may, at the request of the Sponsor, with the consent of the
Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders, the Delaware Trustee or the
Property Trustee, merge with or into, convert into, consolidate,
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amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities and this Declaration; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property Trustee
as the holder of the Debentures;
(iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization in which the Preferred
Securities are then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor
Securities) are rated by any nationally recognized statistical rating
organization prior to such transaction, such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Preferred Securities (including any Successor
Securities), or if the Debentures are so rated, the Debentures, to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders (including the holders
of any Successor Securities) in any material respect (other than with
respect to any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has purposes substantially identical to
those of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor has
received an Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders
(including the holders of any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders'
interest in the new entity);
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(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor the Successor Entity will be required to register as
an Investment Company under the Investment Company Act; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Trust
(or the Successor Entity) will continue to be classified as a
grantor trust for United States Federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all
of the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Securities Guarantee; and
(ix) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all conditions precedent in this Declaration to such transaction have
been satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, convert into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, conversion, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States Federal income tax purposes or would cause the Holders
of the Securities not to be treated as owning an undivided interest in the
Debentures.
SECTION 3.19. Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and
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advances of the Property Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or compensation affecting
the Securities or the rights of any Holder thereof to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE 4
SPONSOR
SECTION 4.01. Purchase of Common Securities by the Sponsor.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities to
be issued on such date are issued, such purchase to be in an amount equal to or
greater than 3% of the total capital of the Trust.
SECTION 4.02. Expenses.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible
for and shall pay for all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the issuance
of the Preferred Securities to initial purchasers thereof, the fees and expenses
(including reasonable counsel fees and expenses) of the Trustees (including any
amounts payable under Article 10), 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 disposition of Trust assets).
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(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall 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.
(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.02 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to any Creditor by the Sponsor under this Section
4.02.
ARTICLE 5
TRUSTEES
SECTION 5.01. Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace, the
Trustees, and (ii) after the issuance of the Securities the number of Trustees
may be increased or decreased solely by, and Trustees may be appointed, removed
or replaced solely by, vote of Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(1) the number of Trustees shall be at least five (5) unless the
Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least four (4);
(2) at least a majority of the Trustees shall at all times be
officers, directors or employees of Pogo;
(3) if required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be either a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has
its principal place of business in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the laws of the State of
Delaware, except that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise is permitted to act as a
Trustee hereunder under the
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laws of the State of Delaware, then the Property Trustee shall also be
the Delaware Trustee and Section 3.11 shall have no application; and
(4) there shall at all times be a Property Trustee hereunder which
shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
John O. McCoy, Jr.
John W. Elsenshans
Gerald A. Morton
c/o POGO PRODUCING COMPANY
5 Greenway Plaza, Suite 2700
Houston, Texas 77046
(c) There shall at all times be one Trustee which shall act as the
Property Trustee. In order to act as the Property Trustee hereunder, such
Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association organized and
doing business under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia, or a
corporation, national banking association or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation or national banking
association publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.01(c)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7
requires a trustee having certain qualifications to hold title to the
"eligible assets" (as defined in Rule 3a-7) of the Trust, the Property
Trustee shall possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.02(d). If the
Property Trustee has or shall acquire any "conflicting interest" within the
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meaning of ss. 310(b) of the Trust Indenture Act, the Property Trustee and the
Holders of the Common Securities (as if such Holders were the obligor referred
to in ss. 310(b) of the Trust Indenture Act) shall in all respects comply with
the provisions of ss. 310(b) of the Trust Indenture Act. The Preferred
Securities Guarantee and the Indenture shall be deemed to be specifically
described in this Declaration for the purposes of clause (i) of the first
proviso contained in ss. 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee is
Wilmington Trust Company, whose address is as set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is
Wilmington Trust Company, whose address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of the Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
SECTION 5.02. Appointment, Removal and Resignation of the Trustees.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class.
(b) (i) The Trustee that acts as the Property Trustee shall not be
removed in accordance with Section 5.02(a) until a Successor Trustee possessing
the qualifications to act as the Property Trustee under Section 5.01(c) (a
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
and delivered to the Regular Trustees, the Sponsor and the Property Trustee
being removed; and
(ii) the Trustee that acts as the Delaware Trustee shall not be
removed in accordance with Section 5.02(a) until a successor Trustee
possessing the qualifications to act as the Delaware Trustee under
Section 5.01(a)(3) (a "Successor Delaware Trustee") has been appointed
and has accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees, the
Sponsor and the Delaware Trustee being removed.
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(c) A Trustee appointed to office shall hold such office until his
successor shall have been appointed or until his death, removal or resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees, the Sponsor
and the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7, until the assets
of the Trust have been completely liquidated and the proceeds
thereof distributed to the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Regular Trustees,
the Sponsor and the resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.02
within 60 days after delivery of a notice of removal or a Resignation Request,
the Property Trustee or Delaware Trustee being removed of resigning as the case
may be may petition any court of competent jurisdiction for appointment of a
Successor Property Trustee or Successor Delaware Trustee, as the case may be.
Such court may thereupon after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.03. Vacancies among the Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.01 or if the number of Trustees is
increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with the requirements of this
Article 5.
SECTION 5.04. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate
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to dissolve, terminate or annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur until such vacancy is filled as provided in this
Article 5, the Regular Trustees in office, regardless of their number, shall
have all the powers granted to the Regular Trustees and shall discharge all the
duties imposed upon the Regular Trustees by this Declaration.
SECTION 5.05. Meetings.
Meetings of the Regular Trustees shall be held from time to time upon
the call of any Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees. Notice of
any in-person meeting of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meeting of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before such meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless otherwise provided in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees.
SECTION 5.06. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any registration statement or amendment
thereto or other document or schedule filed with the Commission or making any
other governmental filing (including, without limitation, the filings referred
to in Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.07. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee or
any Regular Trustee that is not a natural person, as the case may be, may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee or the Regular Trustees, as the case may be,
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the
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Property Trustee or the Delaware Trustee or any Regular Trustee, as the case may
be, shall be the successor of the Property Trustee or the Delaware Trustee or
that Regular Trustee, as the case may be, hereunder, provided that such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE 6
DISTRIBUTIONS
SECTION 6.01. Distributions.
Holders shall receive periodic distributions, redemption payments and
liquidation distributions in accordance with the applicable terms of the
relevant Holder's Securities as set forth in Exhibits B and C hereto
("Distributions"). If and to the extent that Pogo makes a payment of interest
(including Additional Interest and/or Compounded Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall and is directed, to the extent funds are available for that
purpose, to promptly make a Distribution of the Payment Amount to Holders in
accordance with the terms of the Securities as set forth in Exhibits B and C
hereto. The record dates and payment dates for Distributions shall be the same
as the record dates and payment dates for the Debentures held by the Property
Trustee.
ARTICLE 7
ISSUANCE OF THE SECURITIES
SECTION 7.01. General Provisions Regarding the Securities.
(a) The Regular Trustees shall on behalf of the Trust issue Securities in
fully registered form representing undivided beneficial interests in the assets
of the Trust in accordance with Section 7.01(b) and for the consideration
specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") hereto, which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") hereto, which terms are incorporated by
reference in, and made a part of, this Declaration as if specifically set forth
herein. The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.
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(c) The Certificates shall be signed on behalf of the Trust by the
Regular Trustees (or if there are more than two Regular Trustees by any two of
the Regular Trustees). Such signatures may be the manual or facsimile signatures
of the present or any future Regular Trustee. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not
affect the validity of any Certificate. In case any Regular Trustee who shall
have signed any of the Certificates shall cease to be such Regular Trustee
before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Certificate, shall be the Regular Trustees, although at the
date of the execution and delivery of this Declaration any such person was not a
Regular Trustee. Certificates shall be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which Securities may be listed or traded, or with any rule
or regulation of the Clearing Agency, or to conform to usage. Pending the
preparation of definitive Certificates, the Regular Trustees on behalf of the
Trust may execute temporary Certificates (printed, lithographed or typewritten),
in substantially the form of the definitive Certificates in lieu of which they
are issued, but with such omissions, insertions and variations as may be
appropriate for temporary Certificates, all as may be determined by the Regular
Trustees. Each temporary Certificate shall be executed by the Regular Trustees
(or, if there are more than two Regular Trustees, by any two of the Regular
Trustees) on behalf of the Trust upon the same conditions and in substantially
the same manner, and with like effect, as definitive Certificates. Without
unnecessary delay, the Regular Trustees on behalf of the Trust will execute and
furnish definitive Certificates and thereupon any or all temporary Certificates
may be surrendered to the transfer agent and registrar in exchange therefor
(without charge to the Holders). Each Preferred Security Certificate whether in
temporary or definitive form shall be countersigned upon receipt of a written
order of the Trust signed by one Regular Trustee, by the manual signature of an
authorized signatory of the Person acting as registrar and transfer agent for
the Preferred Securities, which shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to Pogo the $10
constituting initial trust assets as set forth in the Original Declaration.
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SECTION 7.02. Conversion Agent.
The Trust shall maintain an office or agency where Preferred Securities
may be presented for conversion into Common Stock in accordance with the terms
of the Preferred Securities as set forth in Exhibit B hereto ("Conversion
Agent"). The Trust may appoint the Conversion Agent and may appoint one or more
additional Conversion Agents in such other locations as it may determine. The
term "Conversion Agent" includes any additional Conversion Agent. The Trust may
change any Conversion Agent without prior notice to any Holders. If the Trust
fails to appoint or maintain another entity as Conversion Agent, the Property
Trustee will act as such. The Trust or any of its Affiliates may act as
Conversion Agent. The Conversion Agent shall be entitled to the rights and
protections extended to the Property Trustee when acting in such capacity.
The Property Trustee is hereby initially appointed as the Conversion
Agent for the Preferred Securities.
ARTICLE 8
DISSOLUTION OF THE TRUST
SECTION 8.01. Dissolution of the Trust.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders of the Securities in accordance with the terms
of the Securities; or
(ii) when all of the Debentures shall have been distributed to the
Holders of the Securities in exchange for all of the Securities in
accordance with the terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in
Section 3.17; or
(iv) upon a decree of judicial dissolution; or
(v) upon the distribution of Common Stock to all Securities Holders
upon conversion of all outstanding Securities.
Upon dissolution and the completion of the winding up of the affairs of the
Trust, the Trust and this Declaration shall terminate when a certificate of
cancellation is filed by the Trustees with the Secretary of State of the State
of Delaware. The Trustees shall so file such a certificate as soon as
practicable after the occurrence of an event referred to in this Section 8.01.
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The provisions of Sections 3.12 and 4.02 and Article 10 shall survive
the dissolution and termination of the Trust and this Declaration.
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.01. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that: (i) the Trust would not
be classified for United States Federal income tax purposes as a granter
trust; and (ii) the Trust would be an Investment Company required to register
under the Investment Company Act or the transferee would become an Investment
Company required to register under the Investment Company Act. To the
fullest extent permitted by law, any attempted transfer of the Common
Securities other than as set forth in the immediately preceding sentence
shall be null and void.
SECTION 9.02. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges which may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.03. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
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accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
SECTION 9.04. Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Security Certificates, on original issuance will be issued in the form
of one or more, fully registered, global Preferred Security Certificates (each a
"Global Certificate"), to be delivered to DTC, the initial Clearing Agency, by,
or on behalf of, the Trust. Such Global Certificates shall initially be
registered on the books and records of the Trust in the name of Cede & Co., the
nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.07. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and
effect;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and, except as
set forth herein in Section 9.07 or in Rule 3a-7 (if the Trust is
excluded from the definition of an Investment Company solely by reason of
Rule 3a-7) with respect to the Property Trustee, shall have no obligation
to the Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.04
conflict with any other provisions of this Declaration, the provisions of
this Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of Distributions on
the Global Certificates to such Clearing Agency Participants, provided,
that solely for the purposes of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter
provided for in this Declaration, so long as definitive Preferred
Security Certificates have not been issued (pursuant to Section 9.07
hereof), the Trustees may conclusively rely on, and shall be protected in
relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Security
Beneficial Owners' votes or assigning the right to vote on any matter to
any other Persons either in whole or in part.
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SECTION 9.05. Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is required to
be given under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued pursuant to Section 9.07, the relevant
Trustees shall give all such notices and communications, specified herein to be
given to Holders of Preferred Securities, to the Clearing Agency and, with
respect to any Preferred Security Certificate registered in the name of a
Clearing Agency or the nominee of a Clearing Agency, the Trustees shall, except
in Rule 3a-7 (if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7) with respect to the Property Trustee,
have no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.06. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
the Preferred Securities.
SECTION 9.07. Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.06 or (ii) the Regular Trustees elect after consultation
with the Sponsor to terminate the book entry system through the Clearing Agency
with respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such instructions.
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b) there
shall be delivered to the Regular Trustees such security or indemnity as may be
required by them to keep each of them and the Trust harmless, then in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, the Regular Trustees (or if there are more than two Regular Trustees
by any two of the Regular Trustees) on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection with
the issuance of any new Certificate under this Section 9.08, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this section shall constitute conclusive evidence
of an
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ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE 10
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.01. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
SECTION 10.02. Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
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(b) The provisions of this Section 10.02 shall survive the termination of
this Declaration or the resignation or removal of any Trustee.
SECTION 10.03. Outside Business.
The Sponsor and any Trustee (in the case of the Property Trustee,
subject to Section 5.01(c)) may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. Neither the Sponsor nor any Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and the Sponsor or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor or may act as
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or any of its Affiliates.
ARTICLE 11
ACCOUNTING
SECTION 11.01. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year,
or such other year as is required by the Code.
SECTION 11.02. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States Federal income tax purposes.
(b) If required by applicable law, the Regular Trustees shall, as soon as
available after the end of each Fiscal Year of the Trust, cause to be prepared
and mailed to each Holder of Securities unaudited financial statements of the
Trust for such Fiscal Year, prepared in accordance with generally accepted
accounting principles; provided that if the Trust is required to comply with the
periodic reporting requirements of Section 13(a) or 15(d) of the Exchange Act,
such financial
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statements for such Fiscal Year shall be examined and reported on by a firm of
independent certified public accountants selected by the Regular Trustees (which
firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be duly prepared and mailed to
each Holder of Securities any annual United States Federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States Federal income tax
return, on such form as is required by the Code, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the Trust with
any state or local taxing authority.
SECTION 11.03. Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds from the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the sole signatories for the Property Account.
SECTION 11.04. Withholding.
The Trust and the Trustees shall comply with all withholding
requirements under United States Federal, State and local law. The Regular
Trustees shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Regular Trustees to assist them in determining the extent of,
and in fulfilling, the Trust's withholding obligations. The Trust shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount to be withheld was not
withheld from a Distribution, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.01. Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and only
by, a written instrument executed by a majority of the Regular Trustees;
provided, however, that (i) no amendment or modification to this Declaration
shall be made, and any such purported amendment shall be void and ineffective:
(A) unless the Property Trustee shall have first received: (x) an Officers'
Certificate that such amendment is permitted by, and conforms to, the terms of
this Declaration; and (y) an Opinion of Counsel that such amendment is permitted
by, and conforms to, the terms of this Declaration and that all conditions
precedent, if any, in this Declaration to the execution and delivery of such
amendment have been satisfied; and (B) to the extent the result of such
amendment would be to: (x) cause the Trust to fail to continue to be classified
for purposes of United States Federal income taxation as a grantor trust; (y)
reduce or otherwise adversely affect the rights or powers of the Property
Trustee in contravention of the Trust Indenture Act; or (z) cause the Trust to
be deemed to be an Investment Company required to be registered under the
Investment Company Act; (ii) at such time after the Trust has issued any
Securities which remain outstanding, any amendment which would adversely affect
the rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in the terms
of such Securities; (iii) Section 4.02, Section 9.01(c), this Section 12.01 and
the distribution rate and conversion provisions of the Securities as set forth
in Exhibits B and C hereto shall not be amended without the consent of all of
the Holders of the Securities; (iv) no amendment which adversely affects the
rights, powers and privileges of the Property Trustee or the Delaware Trustee
shall be made without the consent of the Property Trustee or the Delaware
Trustee, respectively; (v) Article 4 shall not be amended without the consent of
the Sponsor; and (vi) the rights of the Holders of Common Securities under
Article 5 to increase or decrease the number of, and to appoint, replace or
remove, Trustees shall not be amended without the consent of each Holder of
Common Securities.
(b) Notwithstanding Section 12.02(a), this Declaration may be amended
without the consent of the Holders of the Securities to (i) cure any
ambiguity, (ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration, (iii) add to the covenants, restrictions or obligations of the
Sponsor, (iv) conform to any changes in Rule 3a-5 or Rule 3a-7 (if the Trust
is excluded from the definition of an Investment Company solely by reason of
Rule 3a-5 or Rule 3a-7) or any change in interpretation or application of
Rule 3a-5 or Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-5 or Rule 3a-7) by the
Commission, (v) make any other provisions with respect to matters or
questions arising under this Declaration which shall not be inconsistent with
the other provisions of this Declaration, (vi) modify, eliminate or add to
any provisions of this Declaration to such extent as shall be necessary to
ensure that the Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Securities are outstanding
or to ensure that the Trust will not be required to register as an Investment
Company under the Investment Company Act, and (vii) pursuant to Section 5.02,
evidence the acceptance of the appointment of a successor Trustee or fill a
vacancy created by an
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increase in the number of Regular Trustees, in each case which amendment does
not adversely affect in any material respect the rights, preferences or
privileges of the Holders.
SECTION 12.02. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or Common
Securities may be called at any time by the Regular Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which the
Holders of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange or
automated quotation system on which the Preferred Securities are then listed,
traded or quoted. The Regular Trustees shall call a meeting of the Holders of
Preferred Securities or Common Securities, if directed to do so by Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more notices in
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provision shall apply to meetings of the Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to all the
Holders of Securities having a right to vote thereat not less than seven
(7) days nor more than sixty (60) days prior to the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange or automated quotation system on which the Preferred Securities
are then listed, traded or quoted, such vote, consent or approval may be
given at a meeting of the Holders of Securities. Any action that may be
taken at a meeting of the Holders of Securities may be taken without a
meeting and without prior notice if a consent in writing setting forth
the action so taken is signed by Holders of Securities owning not less
than the minimum aggregate liquidation amount of Securities that would be
necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be
given to the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any written
ballot submitted to the Holders of Securities for the purpose of taking
any action without a meeting shall be returned to the Trust within the
time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the Holder of
the Security executing it. Except as otherwise provided herein or in the
terms of the Securities, all matters relating to the
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giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act, this
Declaration or the rules of any stock exchange or automated quotation
system on which the Preferred Securities are then listed, traded or
quoted, the Regular Trustees, in their sole discretion, shall establish
all other provisions relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any meeting at which
any matter is to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE 13
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 13.01. Representations and Warranties of the Property Trustee.
The Trustee which acts as the initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as the Property Trustee that:
(i) The Property Trustee is a national banking association or a
banking corporation with trust powers, duly organized, validly existing
and in good standing under the laws of the United States or the laws of
the state of its incorporation, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, this Declaration.
(ii) The execution, delivery and performance by the Property
Trustee of this Declaration have been duly authorized by all necessary
corporate action on the part of the Property Trustee. This Declaration
has been duly executed and delivered by the Property Trustee, and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law).
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(iii) The execution, delivery and performance of this Declaration
by the Property Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with
or notice to, any banking authority which supervises or regulates the
Property Trustee is required for the execution, delivery or performance
by the Property Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in
Section 5.01(c).
SECTION 13.02. Representations and Warranties of the Delaware Trustee.
The Trustee which acts as the initial Delaware Trustee represents and
warrants to the Trust and the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
the Delaware Trustee, that:
(i) The Delaware Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
with corporate power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Delaware
Trustee of this Declaration have been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration
has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law).
(iii) No consent, approval or authorization of, or registration
with or notice to, any banking authority which supervises or regulates
the Delaware Trustee, if any, is required for the execution, delivery or
performance by the Delaware Trustee of this Declaration.
(iv) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has
its principal place of business in the State of Delaware and is a Person
that satisfies for the Trust ss. 3807(a) of the Business Trust Act.
45
<PAGE>
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular Trustees
on behalf of the Trust may give notice of to the Holders of the Securities):
Pogo Trust I
c/o Pogo Producing Company
5 Greenway Plaza, Suite 2700
Houston, Texas 77046
Attention: Corporate Secretary
Telecopy: (713) 297-4970
(b) if given to the Property Trustee, at the mailing address of the
Property Trustee set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19810
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
(c) if given to the Delaware Trustee, at the mailing address of the
Delaware Trustee set forth below (or such other address as the Delaware Trustee
may give notice of to the Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19810
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
46
<PAGE>
Pogo Producing Company
5 Greenway Plaza, Suite 2700
Houston, Texas 77046
Attention: Corporate Secretary
Telecopy: (713) 297-4970
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee
shall also be sent to the Trust. All notices shall be deemed to have been given,
when received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.02. Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any Securities
by his or her acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Declaration, or in any suit against the Property Trustee for
any action taken or omitted by it as Property Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 14.02 shall not apply to any
suit instituted by the Property Trustee, to any suit instituted by any Holder of
Preferred Securities, or group of Holders of Preferred Securities, holding more
than 10% in aggregate liquidation amount of the outstanding Preferred
Securities, or to any suit instituted by any Holder of Preferred Securities for
the enforcement of the payment of the principal of (or premium, if any) or
interest on the Debentures, on or after the respective due dates expressed in
such Debentures.
SECTION 14.03. Governing Law.
This Declaration, the Securities and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.04. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
47
<PAGE>
SECTION 14.05. Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.06. Counterparts.
This Declaration may contain more than one counterpart of the signature
pages and this Declaration may be executed by the affixing of the signature of
the Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
SECTION 14.07. Intention of the Parties.
It is the intention of the parties hereto that the Trust not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or partnership but that the Trust be treated as a
grantor trust for United States federal income tax purposes. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.08. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.09. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of
the Trust and no recourse for the payment of Distributions, or for any claim
upon the Securities or otherwise in respect thereof, shall be had against any
Holder of Securities or any Affiliate of a Holder of Securities, solely by
reason of such Person's being a Holder of Securities or an Affiliate of a Holder
of Securities, it being understood that the Holder of Securities, solely by
reason of being a Holder of Securities, has limited liability (in accordance
with the provisions of the Business Trust Act) for the liabilities and
obligations of the Trust. Nothing contained in this Section 14.09 shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Declaration, the Preferred Guarantee and the Indenture, of the rights and
remedies against the Trust or the Sponsor.
48
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
POGO PRODUCING COMPANY,
as Sponsor
By: __________________________________
Name:
Title:
_______________________________________
John O. McCoy, Jr.,
as Regular Trustee
_______________________________________
John W. Elsenshans,
as Regular Trustee
_______________________________________
Gerald A. Morton,
as Regular Trustee
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Property Trustee
By: ___________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Delaware Trustee
By: ___________________________________
Name:
Title:
49
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
POGO TRUST I
THIS CERTIFICATE OF TRUST of Pogo Trust I (the "Trust"), dated as of
March 17, 1999, is being duly executed and filed by the undersigned, as
trustees, with the Secretary of State of the State of Delaware to form a
business trust under the Delaware Business Trust Act (12 Del. Code ss. 3801 et
seq.).
1. Name. The name of the business trust being formed hereby is Pogo Trust
I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are Wilmington
Trust Company, 1100 North Market Street, Wilmington, Delaware 19810.
3. Effective Date. This Certificate of Trust shall be effective at the time
of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the Trust
at the time of filing this Certificate of Trust, have executed this Certificate
of Trust as of the date first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: _______________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Property Trustee
By: _______________________________
Name:
Title:
GERALD A. MORTON,
as Regular Trustee
By: _______________________________
A-1
<PAGE>
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of
Trust of Pogo Trust I dated as of June 2, 1999 (as amended from time to time,
the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. Designation and Number. Three million (3,000,000) Preferred
Securities of the Trust with an aggregate liquidation amount at any time
outstanding with respect to the assets of the Trust of One Hundred Fifty
Million Dollars ($150,000,000), and each with a liquidation amount with
respect to the assets of the Trust of $50 per Preferred Security, are hereby
designated as "6 1/2% Cumulative Quarterly Income Convertible Preferred
Securities, Series A". The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as
Annex I, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange or automated quotation system on which the
Preferred Securities are then listed, traded or quoted. In connection with
the issuance and sale of the Preferred Securities and the Common Securities,
the Trust will purchase as trust assets Debentures of Pogo having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities so issued and bearing interest
at an annual rate equal to the annual Distribution rate on the Preferred
Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. Distributions. (a) Distributions payable on each Preferred Security
will be fixed at a rate per annum of 6 1/2% (the "Coupon Rate") of the stated
liquidation amount of $50 per Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Preferred Securities will accumulate from
June 2, 1999 and will be payable quarterly in arrears, on March 1, June 1,
September 1 and December 1 of each year, commencing on September 1, 1999,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the
Property Trustee. So long as Pogo shall not be in default in the payment of
interest on the
<PAGE>
Debentures, Pogo has the right under the Indenture for the Debentures to
defer payments of interest on the Debentures by extending the interest
payment period at any time and from time to time on the Debentures for a
period not exceeding 20 consecutive quarterly interest periods (each, an
"Extension Period"), during which Extension Period no interest shall be due
and payable on the Debentures. As a consequence of such deferral,
Distributions shall also be deferred. Despite such deferral, Distributions
will continue to accumulate with additional distributions thereon (to the
extent permitted by applicable law but not at a rate greater than the rate
at which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly during any such Extension Period; provided that no
Extension Period shall extend beyond the stated maturity of the Debentures
or the date on which Debentures are redeemed. Prior to the termination of
any such Extension Period, Pogo may further extend such Extension Period;
provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarterly interest
periods. Upon the termination of any Extension Period and the payment of
all amounts then due, Pogo may commence a new Extension Period, subject to
the above requirements. On the Distribution payment date at the end of an
Extension Period, payments of accumulated Distributions will be payable to
Holders of Preferred Securities as they appear on the books and records of
the Trust (regardless of who the Holders may have been on other dates
during the Extension Period) on the record date for such Distribution
payment date.
(c) Distributions on the Preferred Securities will be payable promptly
by the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates shall
be one business day prior to the relevant Distribution date, and if the
Preferred Securities are no longer in book-entry only form, the relevant
record dates will be the fifteenth (15th) day of the month prior to the
relevant Distribution date, which record and payment dates correspond to
the record and interest payment dates on the Debentures. Distributions
payable on any Preferred Securities that are not punctually paid on any
Distribution payment date as a result of Pogo's having failed to make the
corresponding interest payment on the Debentures will forthwith cease to be
payable to the person in whose name such Preferred Security is registered
on the relevant record date, and such defaulted Distribution will instead
be payable to the person in whose name such Preferred Security is
registered on the special record date established by the Regular Trustees,
which record date shall correspond to the special record date or other
specified date determined in accordance with the Indenture; provided,
however, that Distributions shall not be considered payable on any
Distribution payment date falling within an Extension Period unless Pogo
has elected to make a full or partial payment of interest accrued on the
Debentures on such Distribution payment date. Subject to any applicable
laws and regulations and the provisions of the Declaration, each payment in
respect of the Preferred Securities will be made as described in section 9
hereof. If any date on which Distributions are payable on the Preferred
Securities is not a Business Day, then payment of the Distribution payable
on such date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding
B-2
<PAGE>
Business Day, in each case with the same force and effect as if made on the
date such payment was originally payable. Notwithstanding anything herein
to the contrary, the record dates and payment dates for Distributions shall
be the same as the record dates and payment dates for the Debentures.
(d) All Distributions paid with respect to the Preferred Securities
and the Common Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and
is continuing, the Preferred Securities shall have a priority over the
Common Securities with respect to Distributions.
(e) In the event of an election by the Holder to convert its Preferred
Securities through the Conversion Agent into Common Stock pursuant to the
terms of the Preferred Securities as set forth in this Exhibit B to the
Declaration, no payment, allowance or adjustment shall be made with respect
to accumulated and unpaid Distributions on such Preferred Securities, or be
required to be made; provided, however, that if a Preferred Security is
surrendered for conversion after the close of business on any regular
record date for payment of a Distribution and before the opening of
business on the corresponding Distribution date, then, notwithstanding such
conversion, the Distribution payable on such Distribution date will be paid
in cash to the person in whose name the Preferred Security is registered at
the close of business on such record date.
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money
or property shall be distributed Pro Rata among the Holders of the
Preferred Securities and the Common Securities.
3. Liquidation Distribution Upon Dissolution. (a) In the event of any
voluntary or involuntary dissolution of the Trust, the Holders of the Preferred
Securities and the Common Securities will be entitled to receive Pro Rata solely
out of the assets of the Trust legally available for distribution to Holders of
Preferred Securities and Common Securities after satisfaction of liabilities to
the creditors of the Trust, an amount equal to the aggregate of the stated
liquidation amount of $50 per Preferred Security and Common Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution and after satisfaction of liabilities to the creditors of the Trust,
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities and the Common Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on, such Preferred Securities and the Common Securities,
shall be distributed Pro Rata to the Holders of the Preferred Securities and the
Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a Pro Rata basis.
B-3
<PAGE>
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction is
optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures bear
accrued and unpaid interest in an amount equal to the accumulated and unpaid
Distributions on the Preferred Securities and the Common Securities of such
Holder, in exchange for the Preferred Securities and Common Securities of such
Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Preferred Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
interest equal to accumulated and unpaid Distributions on, such Preferred
Securities until such Certificates are presented to Pogo or its agent for
transfer or reissuance.
(d)If Debentures are distributed to Holders of the Preferred Securities,
Pogo, pursuant to the terms of the Indenture, will use its best efforts to have
the Debentures listed on the New York Stock Exchange or on such other exchange
as the Preferred Securities were listed immediately prior to the distribution of
the Debentures.
4. Redemption or Special Event Exchange of Debentures. The Preferred
Securities may be redeemed only if Debentures having an aggregate principal
amount equal to the aggregate liquidation amount of the Preferred Securities and
the Common Securities are repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in
part, whether at maturity, upon redemption at any time or from time
to time on or after June 1, 2002, the proceeds of such repayment will
be promptly applied to redeem Pro Rata Preferred Securities and
Common Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or redeemed,
upon not less than 30 nor more than 60 days' notice, at a cash
redemption price per Preferred Security equal to the Optional
Redemption Price (as such term is defined in the Supplemental
Indenture) per $50 principal amount of Debenture. The date of any
such repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and
Common Securities are to be so redeemed, the Preferred Securities and
the Common Securities will be redeemed
B-4
<PAGE>
Pro Rata and the Preferred Securities will be redeemed as described in
section 4(f)(ii) below. If a partial redemption would result in the
delisting of the Preferred Securities by any national securities
exchange or other organization on which the Preferred Securities are
then listed or traded, Pogo pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the
Preferred Securities only in whole.
(c) (i) If a Special Event shall occur and be continuing, the
Regular Trustees shall give notice of such Special Event to the
Property Trustee and shall direct the Conversion Agent to exchange
all outstanding Preferred Securities for Debentures having a
principal amount equal to the aggregate liquidation amount of the
Preferred Securities to be exchanged and with accrued interest
(including Additional Interest and Compounded Interest, if any) in an
amount equal to any unpaid Distributions on the Preferred Securities;
provided, however, that, in the case of a Tax Event, the Sponsor
shall have the right to (i) direct that less than all, or none, as
appropriate, of the Preferred Securities be so exchanged if and for
so long as the Sponsor shall have elected to pay any Additional
Interest (as defined in the Supplemental Indenture) such that the net
amounts received by Holders of Preferred Securities not so exchanged
in respect of Distributions and other distributions are not reduced
as a result of such Tax Event, and shall not have revoked any such
election or failed to make such payments or (ii) cause the Preferred
Securities and the Common Securities to be redeemed in the manner set
forth below. If a Tax Event shall occur or be continuing, the Sponsor
shall have the right, within 90 days of the occurrence of such Tax
Event upon not less than 30 nor more than 60 days' notice, to redeem
the Debentures, in whole but not in part, for cash at the Tax
Redemption Price (as defined in the Supplemental Indenture), plus
accrued and unpaid interest thereon (including Additional Interest
and Compounded Interest, if any). Promptly following such redemption,
Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed will be redeemed by the Trust at a cash
redemption price per Preferred Security equal to the Tax Redemption
Price per $50 principal amount of Debentures, plus accrued and unpaid
Distributions thereon to the redemption date on a pro rata basis. The
Common Securites will be redeemed Pro Rata with the Preferred
Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securites will have a priority over the
common Securities with respect to payment of the Tax Redemption Price.
(ii) Notice of any exchange pursuant to this Section
4(c) (an "Exchange Notice") of the Preferred Securities,
which Exchange Notice shall be irrevocable, will be given by
the Property Trustee by first-class mail to the Sponsor and
to each record Holder of Preferred Securities and Common
Securities to be exchanged not fewer than 30 nor more than 60
days prior to the date fixed for exchange thereof. For
purposes of the calculation of the date of exchange and the
dates on which notices are given pursuant to this paragraph
(b), an Exchange Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage
prepaid, to each Holder. Each Exchange Notice shall be
addressed to each Holder of Preferred Securities at the
address of such Holder appearing in the books and records of
the Trust. Each Exchange Notice shall state: (A) the exchange
date; (B) the aggregate liquidation amount and any unpaid
Distributions on the Trust Preferred Securities and Common
Securities to be exchanged and the aggregate principal amount
and any accrued interest on the Debentures to be exchanged
therefor; (C) that on the exchange date the Preferred
Securities to be so exchanged shall be exchanged for
Debentures and that Distributions on the Preferred Securities
so exchanged will cease to accumulate on and after said date;
and (D) the identity of the Conversion Agent, if any, and the
place or places where each Preferred Securities Certificate
to be exchanged is to be surrendered
B-5
<PAGE>
in exchange for Debentures. No defect in the Exchange Notice or
in the mailing thereof with respect to any Preferred Security
shall affect the validity of the exchange proceedings for any
other Preferred Security.
(iii) In the event that fewer than all the
outstanding Preferred Securities are to be exchanged, then,
on the exchange date, (i) if all of the outstanding Preferred
Securities are represented by Definitive Preferred Securities
Certificates, the particular Preferred Securities to be
exchanged will be selected by the Property Trustee from the
outstanding Preferred Securities not previously called for
redemption or exchange on a pro rata basis, (ii) if all of
the outstanding Preferred Securities are represented by
Global Certificates, the Property Trustee shall provide for
the selection for exchange of a portion of the Global
Certificate representing the Preferred Securities on a pro
rata basis and (iii) if outstanding Preferred Securities are
represented by both Global Certificates and Book-Entry
Preferred Securities Certificates, the Property Trustee shall
select the portion of the Global Certificate representing the
Preferred Securities and the particular outstanding Preferred
Securities represented by Definitive Preferred Securities
Certificates to be exchanged on a pro rata basis. In the case
of clause (ii) or (iii) above, the particular Preferred
Securities to be exchanged shall be selected in accordance with
the applicable rules and procedures for the Clearing Agency in
whose name, or whose nominee's name, such Global Certificate is
then held. Any Preferred Securities Certificate that is to be
exchanged only in part shall be surrendered with due endorsement
or by a written instrument of transfer fully executed by the
Holder thereof (or its attorney duly authorized in writing) and
the Trust shall prepare and deliver to such Holder, without
service charge, a new Preferred Securities Certificate or
Certificates in aggregate stated liquidation amount equal to,
and in exchange for, the unredeemed portion of the Preferred
Securities Certificate so surrendered. The Common Securities
shall be exchanged in a similar manner.
(iv) In the event of an exchange pursuant to this
Section 4(c), on the date fixed for any such exchange, (i) if
the Preferred Securities are represented by Global
Certificates, the Clearing Agency or its nominee, as the
record Holder of such Preferred Securities, will exchange
through the Conversion Agent the Global Certificate
representing the Preferred Securities to be exchanged for a
registered Global Certificate or certificates representing
the Debentures to be delivered upon such exchange, (ii) if
the Preferred Securities are represented by Definitive
Preferred Securities Certificates, the certificates
representing the Preferred Securities to be so exchanged will
be deemed to represent Debentures having a principal amount
equal to the aggregate stated Liquidation Preference of such
Preferred Securities until such certificates are presented to
the Conversion Agent for exchange for definitive certificates
representing Debentures and (iii) all rights of the Holders
of the Preferred Securities so exchanged will cease, except
for the right of such Holders to receive Debentures. The
Common Securities shall be exchanged in a similar manner.
B-6
<PAGE>
(v) Each Holder, by becoming a party to the Declaration,
will be deemed to have agreed to be bound by these exchange
provisions in regard to the exchange of Preferred Securities for
Debentures pursuant to the terms described above.
(vi) "Tax Event" means that the Sponsor and the Regular
Trustees shall have received an opinion of counsel from
independent nationally recognized tax counsel experienced in
such matters to the effect that on or after May 26, 1999 as a
result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any
amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body,
court, governmental agency or regulatory authority (including
the enactment of any legislation or 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
theretofore commonly accepted position or (d) any action
taken by any governmental agency or regulatory authority,
which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued
or announced or which action is taken, in each case on or
after May 26, 1999, there is more than a remote risk that (i)
the Trust is, or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust
is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by Pogo to the
Trust on the Debentures is not, or within 90 days of the date
thereof will not be, deductible by Pogo for United States
Federal income tax purposes.
(vii) "Investment Company Event" means that the Sponsor
received an opinion of counsel from independent nationally
recognized counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of
a 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 (a "Change
in Investment Company Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an
Investment Company which is required to be registered under
the Investment Company Act, which Change in Investment
Company Act Law becomes effective on or after May 26, 1999.
(d) The Trust may not redeem fewer than all the outstanding
Preferred Securities unless all accumulated and unpaid Distributions
have been paid on all Preferred Securities for all quarterly
Distribution periods terminating on or prior to the date of redemption.
(e) [Intentionally omitted.]
(f) (i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the Trust by mail to each Holder of
Preferred Securities and Common Securities to be redeemed
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or exchanged not less than 30 nor more than 60 days prior to the date
fixed for redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred
Securities to be redeemed will be redeemed Pro Rata from each
Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and
held of record by DTC (or successor Clearing Agency) or any
other nominee, the Preferred Securities will be redeemed from,
and the distribution of the proceeds of such redemption will be
made to, DTC (or successor Clearing Agency).
(iii) Subject to section 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of
Preferred Securities as provided in this section 4 (which notice
will be irrevocable) then (A) while the Preferred Securities are
in book-entry only form, with respect to the Preferred
Securities, by 12:00 noon, New York City time, on the redemption
date, provided that Pogo has paid the Property Trustee, in
immediately available funds, a sufficient amount of cash in
connection with the related redemption or maturity of the
Debentures, the Property Trustee will deposit irrevocably with
DTC (or successor Clearing Agency) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred
Securities and will give DTC (or successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Preferred Securities and (B) if the
Preferred Securities are issued in definitive form, with respect
to the Preferred Securities and provided that Pogo has paid the
Property Trustee, in immediately available funds, a sufficient
amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Preferred
Securities by check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have
been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the redemption
date, Distributions will cease to accumulate on the Preferred
Securities called for redemption, such Preferred Securities will
no longer be deemed to be outstanding and all rights of Holders
of such Preferred Securities so called for redemption will
cease, except the right of the Holders of such Preferred
Securities to receive the Redemption Price, but without interest
on such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the
transfer of any Preferred Securities which have been so called
for
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redemption. If any date fixed for redemption of Preferred
Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will
be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of
Preferred Securities is improperly withheld or refused and not
paid either by the Property Trustee or by Pogo pursuant to the
Preferred Securities Guarantee, Distributions on such Preferred
Securities will continue to accumulate, from the original
redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to DTC or its
nominee (or any successor Clearing Agency or its nominee) if the
Global Certificates have been issued or, if Definitive Preferred
Security Certificates have been issued, to the Holders of the
Preferred Securities.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States Federal securities
laws), Pogo or any of its Affiliates may at any time and from
time to time purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
5. Conversion Rights. The Holders of Preferred Securities shall have the
right at any time prior to the close of business on May 31, 2029 or, in the case
of Preferred Securities called for redemption, prior to the close of business on
the Business Day prior to the redemption date, at their option, to cause the
Conversion Agent to convert Preferred Securities, on behalf of the converting
Holders, into shares of Common Stock in the manner described herein on and
subject to the following terms and conditions:
(a) The Preferred Securities will be convertible at the office
of the Conversion Agent maintained for such purpose in the Borough of
Manhattan, The City of New York, into fully paid and nonassessable
shares of Common Stock pursuant to the Holder's direction to the
Conversion Agent to exchange such Preferred Securities for a portion of
the Debentures theretofore held by the Trust on the basis of one
Preferred Security per $50 principal amount of Debentures, and
immediately convert such amount of Debentures into fully paid and
nonassessable shares of Common Stock at an initial rate of 2.1053 shares
of Common Stock per $50 principal amount of Debentures (which is
equivalent to a conversion price of $23.75 per share of Common Stock,
subject to certain adjustments set forth in Sections 5.03 and 5.04 of
the Supplemental Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Preferred Securities into Common Stock,
the Holder shall submit to the Conversion Agent at the office referred
to above an irrevocable request to convert Preferred Securities on
behalf of such Holder (the "Conversion Request"), together, if the
Preferred Securities are in certificated form, with such Preferred
Security Certificates.
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<PAGE>
The Conversion Request shall (i) set forth the number of Preferred
Securities to be converted and the name or names, if other than the
Holder, in which the shares of Common Stock should be issued and (ii)
direct the Conversion Agent (a) to exchange such Preferred Securities
for a portion of the Debentures held by the Trust (at the rate of
exchange specified in the preceding paragraph) and (b) to immediately
convert such Debentures on behalf of such Holder into Common Stock,
subject to certain adjustments set forth in the Supplemental Indenture
(at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to
exchange Preferred Securities for a portion of the Debentures held by
the Trust and the Trust shall, upon receipt of such notice, deliver to
the Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Sponsor of the Holder's election to convert such
Debentures into shares of Common Stock. If a Preferred Security is
surrendered for conversion after the close of business on any regular
record date for payment of a Distribution and before the opening of
business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose
name the Preferred Security is registered at the close of business on
such record date. Except as provided above, neither the Trust nor the
Sponsor will make, or be required to make, any payment, allowance or
adjustment upon any conversion on account of any accumulated and unpaid
Distributions accumulated on the Preferred Securities surrendered for
conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, and the delivery of
Common Stock upon conversion of the Preferred Securities shall be deemed
to constitute full payment for all accumulated and unpaid Distributions
on the Preferred Securities. Preferred Securities shall be deemed to
have been converted immediately prior to the close of business on the
day on which a Conversion Request relating to such Preferred Securities
is received by the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive Common
Stock issuable upon conversion of the Debentures shall be treated for
all purposes as the record holder or holders of such Common Stock at
such time. As promptly as practicable on or after the Conversion Date,
the Sponsor shall issue and deliver at the office of the Conversion
Agent a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same calculated in the manner set forth
in Section 5.02(e) of the Supplemental Indenture, unless otherwise
directed by the Holder in the Conversion Request, and the Conversion
Agent shall distribute such certificate or certificates, together with
the applicable cash payment, if any, to such Person or Persons.
(c) Each Holder of a Preferred Security by his acceptance
thereof appoints Wilmington Trust Company as the "Conversion Agent" for
the purpose of effecting the conversion of Preferred Securities in
accordance with this Section. In effecting the conversion and
transactions described in this Section, the Conversion Agent shall be
acting as agent of the Holders of Preferred Securities directing it to
effect such conversion transactions. The Conversion Agent is hereby
authorized (i) to exchange Preferred Securities from time to time for
Debentures held by the Trust in connection with the conversion of such
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<PAGE>
Preferred Securities in accordance with this Section and (ii) to convert
all or a portion of the Debentures into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with the provisions of
this Section and to deliver to the Trust a new Debenture or Debentures
for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will
be paid by the Sponsor in cash (based upon the Closing Price (as defined
in the Supplemental Indenture) of Common Stock on the Conversion Date,
which in turn will make such payment to the Holder or Holders of
Preferred Securities so converted, or, if such day is not a day on which
any securities are traded on the national securities exchange or
quotation system used to determine the Closing Price, on the next such
trading day.
(e) The Sponsor shall at all times reserve and keep available
out of its authorized and unissued Common Stock, solely for issuance
upon the conversion of the Debentures free from any preemptive or other
similar rights, such number of shares of Common Stock as shall from
time to time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Sponsor shall be
entitled to deliver upon conversion of Debentures, shares of Common
Stock reacquired and held in the treasury of the Sponsor (in lieu of
the issuance of authorized and unissued shares of Common Stock), so
long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common
Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The
Conversion Agent shall deliver the shares of Common Stock received
upon conversion of the Debentures to the converting Holder of
Preferred Securities free and clear of all liens, charges, security
interests and encumbrances, except for United States withholding
taxes. Whenever the Company issues shares of Common Stock upon
conversion of Debentures and the Company has in effect at such time a
share purchase rights agreement under which holders of Common Stock
are issued rights ("Rights") entitling the holders under certain
circumstances to purchase an additional share or shares of Common
Stock or other capital stock of the Company, the Company will issue,
together with each such share of Common Stock, such number of Rights
(which number may be a fraction) as shall at that time be issuable
with a share of Common Stock pursuant to such share purchase rights
agreement. Each of the Sponsor and the Trust shall prepare and shall
use its 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 Common Stock (and all requirements to list Common
Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the Sponsor to lawfully issue Common
Stock to the Trust upon conversion of the Debentures and the Trust to
lawfully deliver Common Stock to each Holder of Preferred Securities
upon conversion of the Preferred Securities.
(f) The Sponsor will pay any and all taxes that may be payable
in respect of the issue or delivery of shares of Common Stock excluding
United States withholding taxes on conversion of Debentures and the
delivery of the shares of Common Stock by the Trust upon conversion of
the Preferred Securities. The Sponsor shall not, however, be required to
pay
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<PAGE>
any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that
in which the Preferred Securities 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 Trust that such
tax has been paid.
(g) Nothing in the preceding paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Preferred Securities or set forth in this Exhibit B to the Declaration
or to the Declaration itself or otherwise require the Property Trustee
or the Trust to pay any amounts on account of such withholdings.
6. Voting Rights. (a) Except as provided under paragraph 6(b) below and
as otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for,
or the Regular Trustees otherwise propose to effect, (i) any action
that would adversely affect the powers, preferences or special rights
of the Securities, whether by way of amendment to the Declaration,
other than as described in Section 12.01(b) of the Declaration or
otherwise, or (ii) the dissolution, winding-up or termination of the
Trust, other than as described in Section 8.01 of the Declaration or
section 3 of Exhibit B, then the Holders of outstanding Securities
will be entitled to vote on such amendment or proposal as a single
class and such amendment or proposal shall not be effective except
with the approval of the Holders of Securities of at least a Majority
in liquidation amount of the Securities, voting together as a single
class; provided, however, that (A) if any amendment or proposal
referred to in clause (i) above would adversely affect only the
Preferred Securities or the Common Securities, then only the affected
class of Securities will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except
with the approval of at least a Majority in liquidation amount of
such class of Securities, (B) the rights of Holders of Common
Securities under Section 5.02 of the Declaration to increase or
decrease the number of, and to appoint, replace or remove, Trustees
shall not be amended without the consent of each Holder of Common
Securities, and (C) amendments to the Declaration shall be subject to
such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with
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<PAGE>
the directions of the Holders of Securities unless the Property Trustee shall
have received, at the expense of the Sponsor, an Opinion of Counsel experienced
in such matters to the effect that the Trust will not be classified for United
States Federal income tax purposes as other than a grantor trust on account of
such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waive any past default that is waivable under Section
6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Preferred Securities and Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities except by
subsequent vote of such Holders. The Property Trustee shall notify each Holder
of Preferred Securities of any notice of default with respect to the Debentures.
If an Event of Default has occurred and is continuing, then the Holders
of a Majority in liquidation amount of the Preferred Securities will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee or to direct the exercise of any trust
or power conferred upon the Property Trustee under the Declaration, including
the right to direct the Property Trustee to exercise the remedies available to
it as a holder of the Debentures. If the Property Trustee fails to enforce its
rights under the Debentures, a Holder of Preferred Securities, to the extent
permitted by applicable law, may, after a period of 30 days has elapsed since
such Holder's written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against the Sponsor to enforce the
Property Trustee's rights under the Debentures without first instituting any
legal proceeding against the Property Trustee or any other Person; provided
further, that, if an Event of Default has occurred and is continuing and such
event is attributed to the failure of the Sponsor to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Holder Direct Action") on or after the respective
due date specified in the Debentures. In connection with such Holder Direct
Action, the Sponsor will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Sponsor to such Holders of
Preferred Securities in such Holder Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the Holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
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<PAGE>
Any required approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities or pursuant
to written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Preferred Securities are entitled to vote to be mailed to each
Holder of record of Preferred Securities. Each such notice will include a
statement setting forth (i) the date of such meeting, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by Pogo or by any Affiliate of
Pogo shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
Holders of the Preferred Securities have no rights to increase or
decrease the number of Trustees or to appoint, remove or replace a Trustee,
which voting rights are vested exclusively in the Holders of the Common
Securities.
7. Pro Rata Treatment. A reference in these terms of the Preferred
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. Ranking. The Preferred Securities rank pari passu and payment thereon
will be made Pro Rata with the Common Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Preferred Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise rank in priority to the rights of Holders of the Common Securities.
9. Transfer, Exchange, Method of Payments. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled
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thereto and that the payment on redemption of any Preferred Security will be
made only upon surrender of such Preferred Security to the Property Trustee.
10. Acceptance of Indenture and Preferred Securities Guarantee. Each
Holder of Preferred Securities, by the acceptance thereof, agrees to the
provisions of (i) the Preferred Securities Guarantee, including the
subordination provisions therein, and (ii) the Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. No Preemptive Rights. The Holders of Preferred Securities shall have
no preemptive or similar rights to subscribe to any additional Preferred
Securities or Common Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder of Preferred Securities without charge on written request to the
Trust at its principal place of business.
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Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company ("DTC") or a nominee of DTC. This Preferred Security is exchangeable for
Preferred Securities registered in the name of a person other than DTC or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to Pogo Trust I or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities: ____________
-----------
Aggregate Liquidation Amount: $____________
CUSIP NO. 73044P208
Certificate Evidencing Preferred Securities
of
Pogo Trust I
6 1/2% Cumulative Quarterly Income Convertible Preferred Securities, Series A
(liquidation amount $50 per Preferred Security)
Pogo Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ________ (the "Holder")
is the registered owner of _____ (______) preferred securities of the Trust
representing preferred undivided beneficial interests in the assets of
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the Trust and designated the 6 1/2% Cumulative Quarterly Income Convertible
Preferred Securities, Series A (liquidation amount $50 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this Certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Declaration of Trust of the Trust dated as of June 2, 1999, as the same may be
amended from time to time (the "Declaration") including the designation of the
terms of Preferred Securities as set forth in Exhibit B thereto. The Preferred
Securities and the Common Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the Trust,
including the Debentures (as defined in the Declaration) issued by Pogo
Producing Company, a Delaware corporation ("Pogo"), to the Trust pursuant to the
Indenture referred to in the Declaration. The Holder is entitled to the benefits
of the Guarantee Agreement of Pogo dated as of June 2, 1999 (the "Guarantee") to
the extent provided therein. The Trust will furnish a copy of the Declaration,
the Guarantee and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Debentures, including
that the Debentures are subordinate and junior in right of payment to all Senior
Debt (as defined in the Indenture or Supplemental Indenture thereto) as and to
the extent provided in the Indenture or Supplemental Indenture thereto, and (ii)
agreed to the terms of the Guarantee, including that the Guarantee is
subordinate and junior in right of payment to all other liabilities of Pogo,
including the Debentures, except those made pari passu or subordinate by their
terms, and senior to all capital stock (other than the most senior preferred
stock issued, from time to time, if any, by Pogo, which preferred stock will
rank pari passu with the Guarantee) now or hereafter issued by Pogo and to any
guarantee now or hereafter entered into by Pogo in respect of any of its capital
stock (other than the most senior preferred stock issued, from time to time, if
any, by Pogo).
Upon receipt of this Certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
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IN WITNESS WHEREOF, Trustees of the Trust have executed this
Certificate.
POGO TRUST I
By: ________________________, as Regular Trustee
Name: John W. Elsenshans
Title: Regular Trustee
By: ________________________, as Regular Trustee
Name: Gerald A. Morton
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signatory
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of 6 1/2% (the "Coupon Rate") of the stated liquidation amount of $50
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will accumulate additional distributions thereon at the Coupon
Rate per annum (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Preferred Securities will accumulate from June 2,
1999, and will be payable quarterly in arrears, on March 1, June 1, September 1
and December 1 of each year, commencing on September 1, 1999, but only if and to
the extent that interest payments are made in respect of the Debentures held by
the Property Trustee. So long as Pogo shall not be in default in the payment of
interest on the Debentures, Pogo has the right under the Indenture for the
Debentures to defer payments of interest on the Debentures by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions
shall also be deferred. Despite such deferral, Distributions will continue to
accumulate with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly during any
such Extension Period; provided that no Extension Period shall extend beyond the
stated maturity of the Debentures. Prior to the termination of any such
Extension Period, Pogo may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Extension Period and the payment of all amounts then due,
Pogo may commence a new Extension Period, subject to the above requirements. On
the Distribution payment date at the end of the Extension Period, payments of
accumulated Distributions will be payable to Holders of Preferred Securities as
they appear on the books and records of the Trust (regardless of who the Holders
may have been on other dates during the Extension Period) on the record date for
such Distribution payment date.
The Preferred Securities shall be redeemable or subject to mandatory
exchange upon the occurrence of a Special Event as provided in the Declaration.
The Preferred Securities shall be convertible into shares of Common
Stock (as defined in the Declaration), through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock, in the manner and according to
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<PAGE>
the terms set forth in the Declaration upon submission of a Conversion Request
(as defined in the Declaration) to the Conversion Agent (as defined in the
Declaration). A form of Conversion Request is provided at the end of this
Preferred Securities Certificate.
B-20
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company, as Property Trustee of Pogo Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust, dated as of June 2, 1999 (as amended from time to
time, the "Declaration"), by John O. McCoy, Jr., John W. Elsenshans and Gerald
A. Morton as Regular Trustees, Wilmington Trust Company, as the Delaware
Trustee, Wilmington Trust Company, as the Property Trustee, Pogo Producing
Company, as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to the
Declaration) in accordance with and subject to the terms and conditions of the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Preferred Securities, the undersigned hereby directs the Conversion Agent
(as that term is defined in the Declaration) to (i) exchange such Preferred
Securities for a portion of the Debentures (as that term is defined in the
Declaration) held by Pogo Trust I (at the rate of exchange specified in the
terms of the Preferred Securities set forth as Exhibit B to the Declaration) and
(ii) immediately convert such Debentures on behalf of the undersigned into
Common Stock (at the conversion rate specified in the terms of the Preferred
Securities set forth as Exhibit B to the Declaration, subject to certain
adjustments set forth in the Supplemental Indenture (as that term is defined in
the Declaration)).
The undersigned does also hereby direct the Conversion Agent that the
shares of Common Stock 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 of Common Stock 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.
B-21
<PAGE>
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
-----------------------
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are
to be issued, along with the address or
addresses of such person or persons:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Signature (for conversion only)
Please Print or Type Name and Address, Including Zip Code, and
Social Security or Other Identifying Number
----------------------------------
----------------------------------
----------------------------------
Signature Guarantee:(2) _________
- --------
**(Signature must be guaranteed by an institution which is a member of one or
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.)
B-22
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED,
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(INSERT ADDRESS AND ZIP CODE OF ASSIGNEE)
AND IRREVOCABLY APPOINTS
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
AGENT TO TRANSFER THIS PREFERRED SECURITY CERTIFICATE ON THE BOOKS OF THE
TRUST. SUBSTITUTE ANOTHER TO ACT FOR HIM OR HER.
DATE: _________________________
SIGNATURE: ____________________
NOTICE: THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
B-23
<PAGE>
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of
Trust of Pogo Trust I dated as of June 2, 1999 (as amended from time to time,
the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. Designation and Number. Ninety-two thousand eight hundred (92,800)
Common Securities of the Trust with an aggregate liquidation amount at any time
outstanding with respect to the assets of the Trust of Four Million Six Hundred
Forty Thousand Dollars ($4,640,000), and each with a liquidation amount with
respect to the assets of the Trust of $50 per Common Security, are hereby
designated as "6 1/2% Cumulative Quarterly Income Convertible Common Securities,
Series A". The Common Security Certificates evidencing the Common Securities
shall be substantially in the form attached hereto as Annex I, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as trust
assets Debentures of Pogo having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. Distributions. (a) Distributions payable on each Common Security will
be fixed at a rate per annum of 6 1/2% (the "Coupon Rate") of the stated
liquidation amount of $50 per Common Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Common Securities will accumulate from
June 2, 1999 and will be payable quarterly in arrears, on March 1, June
1, September 1 and December 1 of each year commencing on September 1,
1999, except as otherwise described below, but only if and to the extent
that interest payments are made in respect of the Debentures held by the
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<PAGE>
Property Trustee. So long as Pogo shall not be in default in the payment
of interest on the Debentures, Pogo has the right under the Indenture
for the Debentures to defer payments of interest on the Debentures by
extending the interest payment period at any time and from time to time
on the Debentures for a period not exceeding 20 consecutive quarterly
interest periods (each, an "Extension Period"), during which Extension
Period no interest shall be due and payable on the Debentures. As a
consequence of such deferral, Distributions shall also be deferred.
Despite such deferral, Distributions will continue to accumulate with
additional distributions thereon (to the extent permitted by applicable
law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly
during any such Extension Period; provided that no Extension Period
shall extend beyond the stated maturity of the Debentures or the date on
which Debentures are redeemed. Prior to the termination of any such
Extension Period, Pogo may further extend such Extension Period;
provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarterly
interest periods. Upon the termination of any Extension Period and the
payment of all amounts then due, Pogo may commence a new Extension
Period, subject to the above requirements. On the Distribution payment
date at the end of the Extension Period, payments of accumulated
Distributions will be payable to Holders of Common Securities as they
appear on the books and records of the Trust (regardless of who the
Holders may have been on other dates during the Extension Period) on the
record date for such Distribution payment date.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the
books and records of the Trust on the relevant record dates. While the
Preferred Securities remain in book-entry only form, the relevant record
dates for the Common Securities shall be one business day prior to the
relevant Distribution date, and if the Preferred Securities are no
longer in book-entry only form, the relevant record dates for the Common
Securities will be the fifteenth (15th) day of the month prior to the
relevant Distribution date, which record and payment dates correspond to
the record and interest payment dates on the Debentures. Distributions
payable on any Common Securities that are not punctually paid on any
Distribution payment date as a result of Pogo's having failed to make
the corresponding interest payment on the Debentures will forthwith
cease to be payable to the person in whose name such Common Security is
registered on the relevant record date, and such defaulted Distribution
will instead be payable to the person in whose name such Common Security
is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date
or other specified date determined in accordance with the Indenture;
provided, however, that Distributions shall not be considered payable on
any Distribution payment date falling within an Extension Period unless
Pogo has elected to make a full or partial payment of interest accrued
on the Debentures on such Distribution payment date. Subject to any
applicable laws and regulations and the provisions of the Declaration,
each payment in respect of the Common Securities will be made as
described in section 9 hereof. If any date on which Distributions are
payable on the Common Securities is not a Business Day, then payment of
the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall be
C-2
<PAGE>
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date such payment was originally
payable. Notwithstanding anything herein to the contrary, the record
dates and payment dates for Distributions shall be the same as the
record dates and payment dates for the Debentures.
(d) All Distributions paid with respect to the Common Securities
and the Preferred Securities will be paid Pro Rata (as defined below) to
the Holders thereof entitled thereto. If an Event of Default has
occurred and is continuing, the Preferred Securities shall have a
priority over the Common Securities with respect to Distributions.
(e) In the event that there is any money or other property held
by or for the Trust that is not accounted for under the Declaration,
such money or property shall be distributed Pro Rata among the Holders
of the Preferred Securities and the Common Securities.
3. Liquidation Distribution Upon Dissolution. (a) In the event of any
voluntary or involuntary dissolution of the Trust, the Holders of the Preferred
Securities and the Common Securities will be entitled to receive Pro Rata solely
out of the assets of the Trust legally available for distribution to Holders of
Preferred Securities and Common Securities after satisfaction of liabilities to
the creditors of the Trust, an amount equal to the aggregate of the stated
liquidation amount of $50 per Preferred Security and Common Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities and the Common Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on, such Preferred Securities and the Common Securities,
shall be distributed Pro Rata to the Holders of the Preferred Securities and the
Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction is
optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures bear
accrued and unpaid interest in an amount equal to the accumulated and unpaid
Distributions on the Preferred Securities and the Common Securities of such
Holder, in
C-3
<PAGE>
exchange for the Preferred Securities and Common Securities of such Holder and
(ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed to
be outstanding and may be canceled by the Regular Trustees and (ii) Certificates
representing Common Securities will be deemed to represent beneficial interests
in the Debentures having an aggregate principal amount equal to the stated
liquidation amount of, and bearing accrued and unpaid interest equal to
accumulated and unpaid Distributions on, such Common Securities until such
Certificates are presented to Pogo or its agent for transfer or reissuance.
4. Redemption of Debentures. The Common Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity, upon redemption at any time or from time to time
on or after June 1, 2002, the proceeds of such repayment will be
promptly applied to redeem Pro Rata Preferred Securities and Common
Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or redeemed,
upon not less than 30 nor more than 60 days' notice, at a cash
redemption price per Common Security equal to the Optional Redemption
Price (as such term is defined in the Supplemental Indenture per $50
principal amount of Debenture, the date of any such repayment or
redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities and
Common Securities are to be so redeemed, the Preferred Securities and
the Common Securities will be redeemed Pro Rata and the Common
Securities will be redeemed as described in section 4(e)(ii) below. If a
partial redemption would result in the delisting of the Preferred
Securities by any national securities exchange or other organization on
which the Preferred Securities are then listed or traded, Pogo pursuant
to the Indenture will redeem Debentures only in whole and, as a result,
the Trust may redeem the Common Securities only in whole.
(c) (i) If a Special Event shall occur and be continuing, the
Regular Trustees shall give notice of such Special Event to the Property
Trustee and shall direct the Conversion Agent to exchange all
outstanding Common Securities for Debentures having a principal amount
equal to the aggregate liquidation amount of the Common Securities to be
exchanged and with accrued interest (including Additional Interest and
Compounded Interest, if any) in an amount equal to any unpaid
Distributions on the Common Securities; provided, however, that, in the
case of a Tax Event, the Sponsor shall have the right to (i) direct that
less than all, or none, as appropriate, of the Common Securities be so
exchanged if and for so long as the Sponsor shall have elected to pay
any Additional Interest (as defined in the Supplemental Indenture) such
that the net amounts received by Holders of Common Securities not so
exchanged in respect of Distributions and other distributions are not
reduced as a result of such Tax Event, and shall not have revoked any
such election or failed to make such payments or (ii) cause the Common
Securities and Prefered Securities to be redeemed in the manner
C-4
<PAGE>
set forth below. If a Tax Event shall occur or be continuing, the
Sponsor shall have the right within 90 days of the occurrence of such
Tax Event, upon not less than 30 nor more than 60 days' notice, to
redeem the Debentures, in whole but not in part, for cash at the Tax
Redemption Price (as defined in the Supplemental Indenture), plus
accrued and unpaid interest thereon (including Additional Interest
and Compounded Interest, if any). Promptly following such redemption,
Common Securities and Preferred Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed will be redeemed by the Trust at a cash
redemption price equal to, the Tax Redemption Price, plus accrued and
unpaid Distributions thereon to the redemption date on a pro rata
basis per $50 principal amount of Debentures. The Common Securities
will be redeemed Pro Rata with the Preferred Securities, except that
if an Event of Default has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with
respect to payment of the Tax Redemption Price.
(ii) Notice of any exchange pursuant to this Section
4(c) (an "Exchange Notice") of the Common Securities, which
Exchange Notice shall be irrevocable, will be given by the
Property Trustee by first-class mail to the Sponsor and to
each record Holder of Common Securities and Preferred
Securities to be exchanged not fewer than 30 nor more than 60
days prior to the date fixed for exchange thereof. For
purposes of the calculation of the date of exchange and the
dates on which notices are given pursuant to this paragraph
(b), an Exchange Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage
prepaid, to each Holder. Each Exchange Notice shall be
addressed to each Holder of Common Securities at the address
of such Holder appearing in the books and records of the
Trust. Each Exchange Notice shall state: (A) the exchange
date; (B) the aggregate liquidation amount and any unpaid
Distributions on the Common Securities and Preferred
Securities to be exchanged and the aggregate principal amount
and any accrued interest on the Debentures to be exchanged
therefor; (C) that on the exchange date the Common Securities
to be so exchanged shall be exchanged for Debentures and that
Distributions on the Common Securities so exchanged will
cease to accumulate on and after said date; and (D) the
identity of the Conversion Agent, if any, and the place or
places where each Common Securities Certificate to be
exchanged is to be surrendered in exchange for Debentures. No
defect in the Exchange Notice or in the mailing thereof with
respect to any Common Security shall affect the validity of
the exchange proceedings for any other Common Security.
(iii) In the event that fewer than all the outstanding
Common Securities are to be exchanged, then, on the exchange
date, the particular Common Securities to be exchanged will be
selected by the Property Trustee from the outstanding Common
Securities not previously called for redemption or exchange on a
pro rata basis. Any Common Securities Certificate that is to be
exchanged only in part shall be surrendered with due endorsement
or by a written instrument of transfer fully executed by the
Holder thereof (or its attorney duly authorized in writing) and
the Trust shall prepare and deliver to such Holder, without
service charge, a new Common Securities Certificate or
Certificates in aggregate stated liquidation amount equal to,
and in exchange for, the unredeemed portion of the Common
Securities Certificate so surrendered. The Common Securities
shall be exchanged in a similar manner.
(iv) Each Holder, by becoming a party to the
Declaration, will be deemed to have agreed to be bound by these
exchange provisions in regard to the exchange of Common
Securities for Debentures pursuant to the terms described above.
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<PAGE>
(v) "Tax Event" means that the Sponsor and the Regular
Trustees shall have received an Opinion of Counsel from
independent nationally recognized tax counsel experienced in
such matters to the effect that on or after May 26, 1999, as
a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any
amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body,
court, governmental agency or regulatory authority (including
the enactment of any legislation or the publication of any
judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position
with respect to such laws or regulations that differs from
its previous position or a theretofore commonly accepted
position or (d) any action taken by any governmental agency
or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which
interpretation or pronouncement by any legislative body,
court, governmental agency or regulatory authority is issued
or announced or which action is taken, in each case on or
after May 26, 1999, there is more than a remote risk that (i)
the Trust is, or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust
is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by Pogo to the
Trust on the Debentures is not, or within 90 days of the date
thereof will not be, deductible by Pogo for United States
Federal income tax purposes.
(vi) "Investment Company Event" means that the Sponsor
and the Regular Trustees shall have received an Opinion of
Counsel from independent nationally recognized Counsel
experienced in practice under the Investment Company Act
that, as a result of the occurrence of a 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 (a "Change in
Investment Company Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an
Investment Company which is required to be registered under
the Investment Company Act, which Change in Investment
Company Act Law becomes effective on or after May 26, 1999.
(d) The Trust may not redeem fewer than all the outstanding
Common Securities unless all accumulated and unpaid Distributions have
been paid on all Common Securities for all quarterly Distribution
periods terminating on or prior to the date of redemption.
(e) (i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the Trust by mail to each Holder of
Preferred Securities and Common Securities to be redeemed or exchanged
not less than 30 nor more than 60 days prior to the date fixed for
redemption or exchange thereof. For purposes of the calculation of the
date of redemption or exchange and the dates on which notices are given
pursuant to this section 4(e)(i) a Redemption/Distribution Notice shall
be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities
and Common Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of
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<PAGE>
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Common Securities are to be redeemed, the Common Securities to
be redeemed will be redeemed Pro Rata from each Holder of Common
Securities (subject to adjustment to eliminate fractional Common
Securities).
(iii) If the Trust gives a Redemption/Distribution
Notice in respect of a redemption of Common Securities as
provided in this section 4 (which notice will be irrevocable),
then immediately prior to the close of business on the
redemption date, provided that Pogo has paid to the Property
Trustee in immediately available funds a sufficient amount of
cash in connection with the related redemption or maturity of
the Debentures, Distributions will cease to accumulate on the
Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of
Holders of such Common Securities so called for redemption will
cease, except the right of the Holders of such Common Securities
to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall be
required to register or cause to be registered the transfer of
any Common Securities which have been so called for redemption.
If any date fixed for redemption of Common Securities is not a
Business Day, then payment of the Redemption Price payable on
such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on
the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of
Common Securities is improperly withheld or refused and not paid
by the Property Trustee, Distributions on such Common Securities
will continue to accumulate, from the original redemption date
to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to Holders of the
Common Securities.
5. Conversion Rights.
The Holders of Common Securities shall have the right at any time prior
to the close of business on May 31, 2029 or, in the case of Common Securities
called for redemption, prior to the close of business on the Business Day prior
to the redemption date, at their option, to cause the Conversion Agent to
convert Common Securities, on behalf of the converting Holders, into shares of
Common Stock in the manner described herein on and subject to the following
terms and conditions:
C-7
<PAGE>
(a) The Common Securities will be convertible at the office of
the Conversion Agent into fully paid and nonassessable shares of Common
Stock pursuant to the Holder's direction to the Conversion Agent to
exchange such Common Securities for a portion of the Debentures
theretofore held by the Trust on the basis of one Common Security per
$50 principal amount of Debentures, and immediately convert such amount
of Debentures into fully paid and nonassessable shares of Common Stock
at an initial rate of 2.1053 shares of Common Stock per $50 principal
amount of Debentures (which is equivalent to a conversion price of
$23.75 per share of Common Stock, subject to certain adjustments set
forth in Sections 5.03 and 5.04 of the Supplemental Indenture (as so
adjusted, "Conversion Price")).
(b) In order to convert Common Securities into Common Stock, the
Holder shall submit to the Conversion Agent at the office referred to
above an irrevocable request to convert Common Securities on behalf of
such Holder (the "Conversion Request"), together, if the Common
Securities are in certificated form, with such Common Security
Certificates. The Conversion Request shall (i) set forth the number of
Common Securities to be converted and the name or names, if other than
the Holder, in which the shares of Common Stock should be issued and
(ii) direct the Conversion Agent (a) to exchange such Common Securities
for a portion of the Debentures held by the Trust (at the rate of
exchange specified in the preceding paragraph) and (b) to immediately
convert such Debentures on behalf of such Holder, into Common Stock,
subject to certain adjustments set forth in the Supplemental Indenture
(at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to
exchange Common Securities for a portion of the Debentures held by the
Trust, and the Trust shall, upon receipt of such notice, deliver to the
Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Sponsor of the Holder's election to convert such
Debentures into shares of Common Stock. If a Common Security is
surrendered for conversion after the close of business on any regular
record date for payment of a Distribution and before the opening of
business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose
name the Common Security is registered at the close of business on such
record date. Except as provided above, neither the Trust nor the Sponsor
will make, or be required to make, any payment, allowance or adjustment
upon any conversion on account of any accumulated and unpaid
Distributions accumulated on the Common Securities surrendered for
conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, and the delivery of
Common Stock upon conversion of the Common Securities shall be deemed to
constitute full payment for all accumulated and unpaid Distributions on
the Common Securities. Common Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which
a Conversion Request relating to such Common Securities is received by
the Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive Common Stock issuable
upon conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, the Sponsor
shall issue and deliver at the office of the Conversion Agent a
certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with the cash payment, if
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any, in lieu of any fraction of any share to the Person or Persons
entitled to receive the same calculated in the manner set forth in
Section 5.02(e) of the Supplemental Indenture, unless otherwise directed
by the Holder in the Conversion Request, and the Conversion Agent shall
distribute such certificate or certificates, together with the
applicable cash payment, if any, to such Person or Persons.
(c) Each Holder of a Common Security by his acceptance thereof
appoints Wilmington Trust Company as the "Conversion Agent" for the
purpose of effecting the conversion of Common Securities in accordance
with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as agent
of the Holders of Common Securities directing it to effect such
conversion transactions. The Conversion Agent is hereby authorized (i)
to exchange Common Securities from time to time for Debentures held by
the Trust in connection with the conversion of such Common Securities in
accordance with this Section and (ii) to convert all or a portion of the
Debentures into Common Stock and thereupon to deliver such shares of
Common Stock in accordance with the provisions of this Section and to
deliver to the Trust a new Debenture or Debentures for any resulting
unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will
be paid by the Sponsor in cash (based upon the Closing Price (as defined
in the Supplemental Indenture) of Common Stock on the Conversion Date,
which in turn will make such payment to the Holder or Holders of Common
Securities so converted, or, if such day is not a day on which any
securities are traded on the national securities exchange or quotation
system used to determine the Closing Price, on the next such trading
day.
(e) The Sponsor shall at all times reserve and keep available
out of its authorized and unissued Common Stock, solely for issuance
upon the conversion of the Debentures free from any preemptive or
other similar rights, such number of shares of Common Stock as shall
from time to time be issuable upon the conversion of all the
Debentures then outstanding. Notwithstanding the foregoing, the
Sponsor shall be entitled to deliver upon conversion of Debentures,
shares of Common Stock reacquired and held in the treasury of the
Sponsor (in lieu of the issuance of authorized and unissued shares of
Common Stock), so long as any such treasury shares are free and clear
of all liens, charges, security interests or encumbrances. Any shares
of Common Stock issued upon conversion of the Debentures shall be
duly authorized, validly issued and fully paid and nonassessable. The
Conversion Agent shall deliver the shares of Common Stock received
upon conversion of the Debentures to the converting Holder of Common
Securities free and clear of all liens, charges, security interests
and encumbrances, except for United States withholding taxes.
Whenever the Company issues shares of Common Stock upon conversion of
Debentures and the Company has in effect at such time a share
purchase rights agreement under which holders of Common Stock are
issued rights ("Rights") entitling the holders under certain
circumstances to purchase an additional share or shares of Common
Stock or other capital stock of the Company, the Company will issue,
together with each such share of Common Stock, such number of Rights
(which number may be a fraction) as shall at that time be issuable
with a share of Common Stock pursuant to such share purchase rights
agreement. Each of the Sponsor and the Trust shall prepare and shall
use its best
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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 Common Stock (and all requirements to list Common Stock
issuable upon conversion of Debentures that are at the time applicable),
in order to enable the Sponsor to lawfully issue Common Stock to the
Trust upon conversion of the Debentures and the Trust to lawfully
deliver Common Stock to each Holder of Common Securities upon conversion
of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable
in respect of the issue or delivery of shares of Common Stock excluding
United States withholding taxes on conversion of Debentures and the
delivery of the shares of Common Stock by the Trust upon conversion of
the Common Securities. The Sponsor shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock in a name other than
that in which the Common Securities 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 Trust that such
tax has been paid.
(g) Nothing in the preceding section 5(f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Common Securities or set forth in this Exhibit C to the Declaration or
to the Declaration itself or otherwise require the Property Trustee or
the Trust to pay any amounts on account of such withholdings.
6. Voting Rights. (a) Except as provided under section 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to
appoint, remove or replace a Trustee, any such increase, decrease,
appointment, removal or replacement to be approved by Holders of Common
Securities representing a Majority in liquidation amount of the Common
Securities.
If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration, other than as described in
Section 12.01(b) of the Declaration, or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than as described in Section 8.01
of the Declaration or section 3 of this Exhibit C, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal as
a single class and such amendment or proposal shall not be effective except with
the approval of the Holders of Securities of at least a Majority in liquidation
amount of the Securities, voting together as a single class; provided, however,
that (A) if any amendment or proposal referred to in clause (i) above would
adversely affect only the Preferred Securities or the Common Securities, then
only the affected class of Securities will be entitled to vote on such amendment
or proposal and such amendment or proposal shall not be effective except with
the approval of at least a Majority in liquidation amount of such class of
Securities, (B) the rights of Holders of Common Securities under Section 5.02 of
the Declaration to increase or decrease the number of, and to appoint, replace
or
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<PAGE>
remove, Trustees shall not be amended without the consent of each Holder of
Common Securities, and (C) amendments to the Declaration shall be subject to
such further requirements as are set forth in Sections 12.01 and 12.02 of the
Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States Federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Common Securities and Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures.
Notwithstanding any other provision of these terms, each Holder of
Common Securities will be deemed to have waived any Event of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by the
Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities have been so cured, waived by the Holders of Preferred Securities or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Declaration or of the Securities. In the event
that any Event of Default with respect to the Preferred Securities is waived by
the Holders of Preferred Securities as provided in the Declaration, the Holders
of Common Securities agree that such waiver shall also constitute the waiver of
such
C-11
<PAGE>
Event of Default with respect to the Common Securities for all purposes under
the Declaration without any further act, vote or consent of the Holders of the
Common Securities.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote to be mailed to each Holder of
record of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the
Debentures in accordance with the Declaration.
7. Pro Rata Treatment. A reference in these terms of the Common
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. Ranking. The Common Securities rank pari passu and payment thereon
will be made Pro Rata with the Preferred Securities, except that when an Event
of Default occurs and is continuing, the rights of Holders of Common Securities
to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise are subordinate to the rights
of Holders of the Preferred Securities.
9. Transfer, Exchange, Method of Payments. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of a like aggregate
liquidation amount, at the principal corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Common Security will be made only upon surrender of such
Common Security to the Property Trustee. Notwithstanding the
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foregoing, transfers of Common Securities are subject to conditions set forth in
Section 9.01(c) of the Declaration.
10. Acceptance of Indenture. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. No Preemptive Rights. The Holders of Common Securities shall have no
preemptive or similar rights to subscribe to any additional Common Securities or
Preferred Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder of Common Securities without charge on written request to the Trust
at its principal place of business.
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ANNEX I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES
------ ----------
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
POGO TRUST I
6 1/2% CUMULATIVE QUARTERLY INCOME CONVERTIBLE COMMON SECURITIES, SERIES A
(LIQUIDATION AMOUNT $50 PER COMMON SECURITY)
POGO TRUST I, A STATUTORY BUSINESS TRUST CREATED UNDER THE LAWS OF THE
STATE OF DELAWARE (THE "TRUST"), HEREBY CERTIFIES THAT ______________ (THE
"HOLDER") IS THE REGISTERED OWNER OF ____________________________ (_________)
COMMON SECURITIES OF THE TRUST REPRESENTING COMMON UNDIVIDED BENEFICIAL
INTERESTS IN THE ASSETS OF THE TRUST AND DESIGNATED THE "6 1/2% CUMULATIVE
QUARTERLY INCOME CONVERTIBLE COMMON SECURITIES, SERIES A" (LIQUIDATION AMOUNT
$50 PER COMMON SECURITY) (THE "COMMON SECURITIES"). THE COMMON SECURITIES ARE
TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST, IN PERSON OR BY A DULY
AUTHORIZED ATTORNEY, UPON SURRENDER OF THIS CERTIFICATE DULY ENDORSED AND IN
PROPER FORM FOR TRANSFER AND SATISFACTION OF THE OTHER CONDITIONS SET FORTH IN
THE DECLARATION (AS DEFINED BELOW) INCLUDING, WITHOUT LIMITATION, SECTION
9.01(C) THEREOF. THE DESIGNATIONS, RIGHTS, PRIVILEGES, RESTRICTIONS, PREFERENCES
AND OTHER TERMS AND PROVISIONS OF THE COMMON SECURITIES ARE SET FORTH IN, AND
THIS CERTIFICATE AND THE COMMON SECURITIES REPRESENTED HEREBY ARE ISSUED AND
SHALL IN ALL RESPECTS BE SUBJECT TO THE TERMS AND PROVISIONS OF, THE AMENDED AND
RESTATED DECLARATION OF TRUST OF THE TRUST DATED AS OF JUNE 2, 1999, AS THE SAME
MAY BE AMENDED FROM TIME TO TIME (THE "DECLARATION") INCLUDING THE DESIGNATION
OF THE TERMS OF COMMON SECURITIES AS SET FORTH IN EXHIBIT C THERETO. THE COMMON
SECURITIES AND THE PREFERRED SECURITIES ISSUED BY THE TRUST PURSUANT TO THE
DECLARATION REPRESENT UNDIVIDED BENEFICIAL INTERESTS IN THE ASSETS OF THE TRUST,
INCLUDING THE DEBENTURES (AS DEFINED IN THE DECLARATION) ISSUED BY POGO
PRODUCING COMPANY, A DELAWARE CORPORATION ("POGO"), TO THE TRUST PURSUANT TO THE
INDENTURE REFERRED TO IN THE DECLARATION. THE TRUST WILL FURNISH A COPY OF
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THE DECLARATION AND THE INDENTURE TO THE HOLDER WITHOUT CHARGE UPON WRITTEN
REQUEST TO THE TRUST AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
THE HOLDER OF THIS CERTIFICATE, BY ACCEPTING THIS CERTIFICATE, IS DEEMED
TO HAVE AGREED TO THE TERMS OF THE INDENTURE AND THE DEBENTURES, INCLUDING THAT
THE DEBENTURES ARE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL SENIOR DEBT
(AS DEFINED IN THE INDENTURE OR THE SUPPLEMENTAL INDENTURE) AS AND TO THE EXTENT
PROVIDED IN THE INDENTURE OR THE SUPPLEMENTAL INDENTURE.
UPON RECEIPT OF THIS CERTIFICATE, THE HOLDER IS BOUND BY THE DECLARATION
AND IS ENTITLED TO THE BENEFITS THEREUNDER.
IN WITNESS WHEREOF, THE TRUSTEES OF THE TRUST HAVE EXECUTED THIS
CERTIFICATE THIS ___ DAY OF _____________, ____.
POGO TRUST I
BY________________________, AS REGULAR TRUSTEE
NAME: JOHN W. ELSENHANS
TITLE: REGULAR TRUSTEE
BY_________________________, AS REGULAR TRUSTEE
NAME: GERALD A. MORTON
TITLE: REGULAR TRUSTEE
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<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 6 1/2% (the "Coupon Rate") of the stated liquidation amount of $50
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one calendar quarter will accumulate additional distributions thereon at
the Coupon Rate per annum (to the extent permitted by applicable law) compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Common Securities will accumulate from June 2, 1999
and will be payable quarterly in arrears, on March 1, June 1, September 1 and
December 1 of each year, commencing on September 1, 1999, but only if and to the
extent that interest payments are made in respect of the Debentures held by the
Property Trustee. So long as Pogo shall not be in default in the payment of
interest on the Debentures, Pogo has the right under the Indenture for the
Debentures to defer payments of interest on the Debentures by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions
shall also be deferred. Despite such deferral, Distributions will continue to
accumulate with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly during any
such Extension Period; provided that no Extension Period shall extend beyond the
stated maturity of the Debentures. Prior to the termination of any such
Extension Period, Pogo may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Extension Period and the payment of all amounts then due,
Pogo may commence a new Extension Period, subject to the above requirements. On
the Distribution payment date at the end of the Extension Period, payments of
accumulated Distributions will be payable to Holders of Common Securities as
they appear on the books and records of the Trust (regardless of who the Holders
may have been on other dates during the Extension Period) on the record date for
such Distribution payment date.
The Common Securities shall be redeemable or subject to mandatory
exchange upon the occurrence of a Special Event as provided in the Declaration.
The Common Securities shall be convertible into shares of Common Stock
(as defined in the Declaration), through (i) the exchange of Common Securities
for a portion of the Debentures and (ii) the immediate conversion of such
Debentures into Common Stock, in the manner and according to the terms set
forth in the Declaration upon submission of a Conversion Request (as defined
in the
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Declaration) to the Conversion Agent (as defined in the Declaration). A form of
Conversion Request is provided at the end of this Common Securities
Certificate.
C-17
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of Pogo Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust dated as of June 2, 1999 (as amended from time to
time, the "Declaration"), by John O. McCoy, John W. Elsenhans and Gerald A.
Morton, as Regular Trustees, Wilmington Trust Company, as the Delaware Trustee,
Wilmington Trust Company, as the Property Trustee, Pogo Producing Company, as
Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to the Declaration)
in accordance with and subject to the terms and conditions of the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Common
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Common Securities for a portion
of the Debentures (as that term is defined in the Declaration) held by Pogo
Trust I (at the rate of exchange specified in the terms of the Common Securities
set forth as Exhibit C to the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned, into Common Stock (at the conversion
rate specified in the terms of the Common Securities set forth as Exhibit C to
the Declaration), subject to certain adjustments set forth in the Supplemental
Indenture (as that term is defined in the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares of Common Stock 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 of Common Stock 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.
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Date: _____________, _____
in whole ___ in part ___
Number of Common Securities to be converted:
-----------------------
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Common Stock are to be issued, along with
the address or addresses of such person or
persons:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Signature (for conversion only)
Please Print or Type Name and Address, Including Zip Code,
and Social Security or Other Identifying Number
----------------------------------
----------------------------------
----------------------------------
Signature Guarantee:(1) ___________
- --------
*(Signature must be guaranteed by an institution which is a member of one or 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.)
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- ------------------------------------------------------------
- ------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------
- ------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------
- ------------------------------------------------------------
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
C-20
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
POGO PRODUCING COMPANY
AND
WILMINGTON TRUST COMPANY
AS TRUSTEE
----------------------------------
JUNIOR SUBORDINATED INDENTURE
DATED AS OF JUNE 1, 1999
----------------------------------
JUNIOR SUBORDINATED DEBENTURES
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
----------------------------------
ARTICLE 1
DEFINITIONS
<TABLE>
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SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION
REGISTRATION AND EXCHANGE OF DEBENTURES
SECTION 2.01. Designation, Terms, Amount, Authentication and Delivery of
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 2.02. Form of Debenture and Trustee's Certificate. . . . . . . . . . . . . 11
SECTION 2.03. Date and Denominations of Debentures and Provisions for Payment
of Principal, Premium and Interest . . . . . . . . . . . . . . . . . 11
SECTION 2.04. Execution of Debentures. . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.05. Exchange of Debentures . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.06. Temporary Debentures . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Debentures. . . . . . . . . . . 15
SECTION 2.08. Cancellation of Surrendered Debentures . . . . . . . . . . . . . . . 16
SECTION 2.09. Provisions of Indenture and Debentures for Sole Benefit of
Parties and Debentureholders . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.10. Appointment of Authenticating Agent. . . . . . . . . . . . . . . . . 17
SECTION 2.11. Global Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.12. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 3
REDEMPTION OF DEBENTURES AND SINKING FUND PROVISIONS
SECTION 3.01. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.02. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.03. Payment Upon Redemption . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.04. Sinking Funds for Debentures. . . . . . . . . . . . . . . . . . . . 21
SECTION 3.05. Satisfaction of Sinking Fund Payments With Debentures . . . . . . . 22
SECTION 3.06. Redemption of Debentures for Sinking Fund . . . . . . . . . . . . . 22
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal of (and Premium, if any) and Interest on
Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.02. Maintenance of Office or Agent for Payment of Debentures,
Designation of Office or Agency for Payment, Registration,
Transfer and Exchange of Debentures . . . . . . . . . . . . . . . . 22
i
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SECTION 4.03. Duties of Paying Agent; Company as Payment Agent; and Holding
Sums In Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.04. Appointment to Fill Vacancy in Office of Trustee. . . . . . . . . . 24
ARTICLE 5
DEBENTUREHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. Company to Furnish Trustee Information as to Names and
Addresses of Debentureholders . . . . . . . . . . . . . . . . . . . 24
SECTION 5.02. Trustee to Preserve Information as to Names and
Addresses of Debentureholders . . . . . . . . . . . . . . . . . . . 24
SECTION 5.03. Annual and Other Reports to Be Filed by Company With the Trustee. . 26
SECTION 5.04. Trustee to Transmit Annual Report to Debentureholders . . . . . . . 27
ARTICLE 6
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT
SECTION 6.01. Events of Default Defined . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.02. Covenant of Company to Pay to Trustee Whole Amount Due on
Debentures on Default in Payment of Interest or Principal (and
Premiums, if any) . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.03. Application of Moneys Collected by Trustee. . . . . . . . . . . . . 31
SECTION 6.04. Limitation on Suits by Holders of Debentures. . . . . . . . . . . . 32
SECTION 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights
Not Waiver of Default . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.06. Rights of Holders of Majority in Principal Amount of
Debentures to Direct Trustee and to Waive Defaults. . . . . . . . . 33
SECTION 6.07. Trustee to Give Notice of Defaults Known To It, But May
Withhold in Certain Circumstances . . . . . . . . . . . . . . . . . 34
SECTION 6.08. Requirements of an Undertaking to Pay Costs in Certain Suits
Under Indenture or Against Trustee. . . . . . . . . . . . . . . . . 34
ARTICLE 7
CONCERNING THE TRUSTEE
SECTION 7.01. Upon Event of Default Occurring and Continuing, Trustee Shall
Exercise Powers Vested In It, and Use Same Degree of Care and
Skill In Their Exercise, as Prudent Individual Would Use. . . . . . 35
SECTION 7.02. Certain Rights of the Trustee . . . . . . . . . . . . . . . . . . . 36
SECTION 7.03. Trustee Not Liable for Recitals In Indenture or In Debentures . . . 38
SECTION 7.04. Trustee, Paying Agent or Debenture Registrar May Own
Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.05. Moneys Received by Trustee to Be Held In Trust Without
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.06. Trustee Entitled to Compensation, Reimbursement and Indemnity . . . 39
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SECTION 7.07. Right of Trustee to Rely on Certificate of Officers of Company
Where No Other Evidence Specifically Prescribed . . . . . . . . . . 39
SECTION 7.08. Disqualification; Conflicting Interests . . . . . . . . . . . . . . 39
SECTION 7.09. Requirements for Eligibility of Trustee . . . . . . . . . . . . . . 40
SECTION 7.10. Resignation of Trustee and Appointment of Successor . . . . . . . . 40
SECTION 7.11. Acceptance by Successor to Trustee. . . . . . . . . . . . . . . . . 41
SECTION 7.12. Successor to Trustee by Merger, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.13. Preferential Collection of Claims Against the Company . . . . . . . 43
ARTICLE 8
CONCERNING THE DEBENTURES
SECTION 8.01. Evidence of Action by Debentureholders. . . . . . . . . . . . . . . 43
SECTION 8.02. Proof of Execution of Instruments and of Holding of
Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.03. Who May Be Deemed Owners of Debentures. . . . . . . . . . . . . . . 44
SECTION 8.04. Debentures Owned by the Company or Controlled or Controlling
Companies Disregarded for Certain Purposes. . . . . . . . . . . . . 45
SECTION 8.05. Instruments Executed by Debentureholders Bind Future Holders. . . . 45
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Purposes for Which Supplemental Indenture May Be Entered Into
Without Consent of Debentureholders . . . . . . . . . . . . . . . . 45
SECTION 9.02. Modification of Indenture with Consent of Debentureholders. . . . . 47
SECTION 9.03. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . 48
SECTION 9.04. Debentures May Bear Notation of Changes By Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.05. Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 10
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 10.01. Company May Consolidate, etc. on Certain Terms . . . . . . . . . . 49
SECTION 10.02. Successor Corporation Substituted. . . . . . . . . . . . . . . . . 49
SECTION 10.03. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 11
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 11.01. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . 50
SECTION 11.02. Application by Trustee of Funds Deposited For Payment of
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.03. Repayment of Moneys Held by the Paying Agent . . . . . . . . . . . 52
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SECTION 11.04. Repayment of Moneys Held by the Trustee. . . . . . . . . . . . . . 52
SECTION 11.05. Indemnification Relating to Governmental Obligations . . . . . . . 53
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Incorporators, Stockholders, Officers and Directors of
Company Exempt From Individual Liability . . . . . . . . . . . . . 53
ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors and Assigns of Company Bound by Indenture . . . . . . . 54
SECTION 13.02. Acts of Board, Committee or Officer of Successor Company
Valid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 13.03. Surrender of Powers of the Company . . . . . . . . . . . . . . . . 54
SECTION 13.04. Required Notices or Demands May be Served by Mail. . . . . . . . . 54
SECTION 13.05. Indenture and Debentures to Be Construed in Accordance with
Laws of the State of New York. . . . . . . . . . . . . . . . . . . 54
SECTION 13.06. Officers' Certificate and Opinion of Counsel to be Furnished
Upon Application or Demands by Company; Statements To Be
Included In Each Certificate or Opinion With Respect to
Compliance With Condition or Covenant. . . . . . . . . . . . . . . 54
SECTION 13.07. Payments Due on Sundays or Holidays. . . . . . . . . . . . . . . . 55
SECTION 13.08. Provisions Required by Trust Indenture Act of 1939 to Control. . . 55
SECTION 13.09. Indenture May Be Executed by its Counterparts. . . . . . . . . . . 55
SECTION 13.10. Separability of Indenture Provisions . . . . . . . . . . . . . . . 55
SECTION 13.11. Assignment by Company to a Subsidiary or Affiliate . . . . . . . . 55
SECTION 13.12. Holders of Preferred Securities as Third Party Beneficiaries
of the Indenture; Holders of Preferred Securities May
Institute Legal Proceedings Against the Company in Certain
Cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 14
SUBORDINATION OF DEBENTURES
SECTION 14.01. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . 56
SECTION 14.02. Default on Senior Debt . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 14.03. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . 57
SECTION 14.04. Subrogation of Debentures. . . . . . . . . . . . . . . . . . . . . 58
SECTION 14.05. Authorization by Debentureholders. . . . . . . . . . . . . . . . . 59
SECTION 14.06. Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 14.07. Trustee's Relation to Senior Debt. . . . . . . . . . . . . . . . . 60
SECTION 14.08. No Impairment to Subordination . . . . . . . . . . . . . . . . . . 61
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SECTION 14.09. Article Applicable to Paying Agents. . . . . . . . . . . . . . . . 61
SECTION 14.10. Trust Moneys Not Subordinated. . . . . . . . . . . . . . . . . . . 61
</TABLE>
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THIS SUBORDINATED INDENTURE is dated as of the first day of June, 1999,
between Pogo Producing Company, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter sometimes referred to as
the "Company"), and Wilmington Trust Company, a Delaware banking corporation,
as Trustee (hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has fully
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured junior subordinated debentures (hereinafter referred to
as the "Debentures"), in an unlimited aggregate principal amount to be issued
from time to time in one or more series in accordance with the terms of this
Indenture, as registered Debentures without coupons, to be authenticated by
the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures are
to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be borne
by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the Debentures issued
pursuant hereto, when executed by the Company and authenticated and delivered
by the Trustee in accordance with the terms of this Indenture, the valid,
binding and legal obligations of the Company, and to constitute a valid
indenture and agreement according to its terms, have been done and performed
or will be done and performed prior to the issuance of such Debentures, and
the execution of this Indenture has been and the issuance hereunder of the
Debentures has been or will be prior to issuance in all respects duly
authorized, and the Company, in the exercise of the legal right and power in
it vested, executes this Indenture and proposes to make, execute, issue and
deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Debentures
are and are to be authenticated, issued and delivered, and in consideration
of the premises and of the acquisition and acceptance of the Debentures by
the holders thereof, the Company covenants and agrees with the Trustee, for
the equal and proportionate benefit (subject to the provisions of this
Indenture) of the respective holders from time to time of the Debentures,
without any discrimination, preference or priority of any one Debenture over
any other by reason of priority in the time of issue, sale or negotiation
thereof, or otherwise, except as provided herein, as follows:
<PAGE>
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. The terms defined in this Section (except
as in this Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture, any resolution of the
Board of Directors of the Company and of any indenture supplemental hereof
shall have the respective meanings specified in this Section. All other terms
used in this Indenture which are defined in the Trust Indenture Act of 1939,
as amended, or which are by reference in such Act defined in the Securities
Act of 1933, as amended (except as herein otherwise expressly provided or
unless the context otherwise requires), shall have the meanings assigned to
such terms in said Trust Indenture Act and in said Securities Act as in force
at the date of this instrument.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of this definition, beneficial ownership of 10% or
more of the voting common equity (on a fully diluted basis) or options or
warrants to purchase such equity (but only if exercisable at the date of
determination or within 60 days thereof) of a Person shall be deemed to
constitute control of such Person.
"Authenticating Agent" means an authenticating agent with respect to all
or any of the series of Debentures, as the case may be, appointed with
respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
"Board of Directors" means the Board of Directors of the Company, or any
committee of such Board duly authorized to act hereunder.
"Board Resolution" means a copy of one or more resolutions, certified by
the secretary or an assistant secretary of the Company to have been adopted
or consented to by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day", with respect to any series of Debentures, means any day
other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the Borough of Manhattan, The City and State of New York,
Wilmington, Delaware or Houston, Texas are authorized or obligated by law or
executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents in the equity
interests (however designated) in such Person, and any rights (other than
debt securities convertible into an equity interest),
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warrants or options exercisable for, exchangeable for or convertible into
such an equity interest in such Person.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer
of the Company. The Certificate need not comply with the provisions of
Section 13.06.
"Common Securities" means the common undivided beneficial interests in
the assets of the applicable Trust.
"Company" means Pogo Producing Company, a corporation duly organized and
existing under the laws of the State of Delaware, and, subject to the
provisions of Article 10, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Indenture is
located at 1100 North Market Street, Wilmington, Delaware 19810, Attention:
Corporate Trust Administration.
"Debenture" or "Debentures" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture.
"Debenture Register" has the meaning assigned in Section 2.05(b).
"Debenture Registrar" has the meaning assigned in Section 2.05(b).
"Debentureholder", "holder of Debentures", "registered holder", or other
similar term, means the person or persons in whose name or names a particular
Debenture shall be registered in the Debenture Register.
"Debt" means, with respect to any Person at any date of determination
(without duplication), (i) all indebtedness of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses, (iii) all
obligations of such Person in respect of letters of credit or bankers'
acceptances or other similar instruments (or reimbursement obligations
thereto) issued on the account of such person, (iv) all obligations of such
person to pay the deferred purchase price of property or services, except
Trade Payables, (v) all obligations of such Person as lessee under
capitalized leases, (vi) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person; PROVIDED
that, for purposes of determining the amount of any Debt of the type
described in this clause (vi), if recourse with respect to such Debt is
limited to such asset, the amount of such Debt shall be limited to the lesser
of the fair market value of such asset or the amount of such Debt, (vii) all
Debt of others Guaranteed by such Person to the extent such Debt is
Guaranteed by such Person, and (viii) to the extent not
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otherwise included in this definition, all obligations of such Person for
claims in respect of derivative products, including interest rate, foreign
exchange rate and commodity prices, forward contracts, options, swaps,
collars and similar arrangements.
"Declaration of Trust" means the Amended and Restated Declaration of
Trust of a Trust, if any, specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Debentures
pursuant to Section 2.01 hereof.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default hereunder.
"Depositary" means with respect to Debentures of any series, for which
the Company shall determine that such Debentures will be issued as one or
more Global Debentures, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency
under the Exchange Act, or other applicable statute or regulation, which, in
each case, shall be designated by the Company pursuant to either Section 2.01
or 2.11.
"Event of Default", with respect to Debentures of a particular series
means any event specified in Section 6.01(a), continued for the period of
time, if any, and the giving of the notice, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Debenture" means, with respect to any series of Debentures, a
Debenture in the form prescribed by Section 2.11 executed by the Company and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with the Indenture, which shall be registered
in the name of the Depositary or its nominee.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) non-callable obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which,
in either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a) (2) of the Securities Act) as custodian with respect
to any such Governmental Obligation or a specific payment of principal of or
interest on any such Governmental Obligation held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Governmental Obligation or the
specific payment of principal of or interest on the Governmental Obligation
evidenced by such depository receipt.
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"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Debt
or other obligation of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Debt of other obligation of
the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); PROVIDED that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Indenture" means this instrument as originally executed, or, if amended
or supplemented as herein provided, as so amended or supplemented.
"Interest Payment Date" when used with respect to any installment of
interest on a Debenture of a particular series means the date specified in
such Debenture or in a Board Resolution or in an indenture supplemental
hereto with respect to such series as the fixed date on which an installment
of interest with respect to Debentures of that series is due and payable.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
property. For purposes of this Indenture, the Company shall be deemed to own
subject to a Lien any property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such property.
"Officers' Certificate" means a certificate signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer or the
Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 13.06, if
and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be counsel for the Company, a Trust or the Trustee, which may be an
employee of the Company but not an employee of a Trust or the Trustee, and
who shall be reasonably acceptable to the Trustee. Each such opinion shall
include the statements provided for in Section 13.06, if and to the extent
required by the provisions thereof.
"Outstanding", when used with reference to Debentures of any series,
subject to the provisions of Section 8.01, means, as of any particular time,
all Debentures of that series theretofore authenticated and delivered by the
Trustee under this Indenture, except (a) Debentures theretofore cancelled by
the Trustee or any paying agent, or delivered to the
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Trustee or any paying agent for cancellation or which have previously been
cancelled; (b) Debentures or portions thereof for the payment or redemption
of which moneys or Governmental Obligations in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in trust for
the holders of such Debentures by the Company (if the Company shall act as
its own paying agent); PROVIDED, HOWEVER, that if such Debentures or portions
of such Debentures are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as in Article 3 provided, or
provision satisfactory to the Trustee shall have been made for giving such
notice; (c) Debentures paid pursuant to Section 2.07; and (d) Debentures in
lieu of or in substitution for which other Debentures shall have been
authenticated and delivered pursuant to the terms of Section 2.07; PROVIDED,
HOWEVER, that in determining whether the holders of the requisite principal
amount of Outstanding Debentures are present at a meeting of holders of
Debentures for quorum purposes or have consented to or voted in favor of any
request, demand, authorization, direction, notice, consent, waiver, amendment
or modification hereunder, Debentures held for the account of the Company,
any of its Subsidiaries or any of its Affiliates shall be disregarded and
deemed not to be Outstanding, except that in determining whether the Trustee
shall be protected in making such a determination or relying upon any such
quorum, consent or vote, only Debentures which the Trustee actually knows to
be so owned shall be so disregarded.
"Person" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Debentures of any
series, means the place or places where the principal of and any premium and
interest on the Debentures of that series are payable as specified by Section
2.01.
"Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by
such Debenture; and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed
or stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Preferred Securities" means the preferred undivided beneficial interests
in the assets of the applicable Trust.
"Property Trustee" means the entity performing the function of the
Property Trustee under the applicable Declaration of Trust of a Trust.
"Responsible Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including
any vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who
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at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of such Person's knowledge of and
familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Exchange" when used with respect to the Debentures of any
series which are held as trust assets of a Trust pursuant to the Declaration
of Trust of such Trust, means the distribution of the Debentures of such
series by such Trust in exchange for the Preferred Securities and Common
Securities of such Trust in dissolution of such Trust pursuant to the
Declaration of Trust of such Trust.
"Senior Debt" means the principal of (and premium, if any) and interest
on all Debt of the Company whether created, incurred or assumed before, on or
after the date of this Indenture; PROVIDED that such Senior Debt shall not
include (i) Debt of the Company that, when incurred and without respect to
any election under Section 1111(b) of Title 11, U.S. Code, was without
recourse, and (ii) any other Debt of the Company which by the terms of the
instrument creating or evidencing the same is specifically designated as
being subordinated to or PARI PASSU with the Debentures, and in particular
the Debentures shall rank PARI PASSU with all other debt securities and
guarantees issued to any trust, partnership or other entity affiliated with
the Company which is a financing vehicle of the Company in connection with an
issuance of securities by such financing entity, which securities are
substantially similar to the Preferred Securities.
"Subsidiary" means, with respect to any Person, a corporation,
partnership, limited liability company, association or other business entity
a majority of whose Voting Stock is at the time, directly or indirectly,
owned by such Person, by one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof. For purposes of the foregoing
definition, an arrangement by which a Person who owns an interest in an oil
and gas property is subject to a joint operating agreement, processing
agreement, net profits interest, overriding royalty interest, farmout
agreement, development agreement, area of mutual interest agreement, joint
bidding agreement, unitization agreement, pooling arrangement or other
similar agreement or arrangement shall not, in and of itself, be considered a
Subsidiary.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in
the ordinary course of business in connection with the acquisition of goods
or services.
"Trust" means any statutory business trust created under the laws of the
State of Delaware by the Company, as sponsor, as specified in the applicable
Board Resolution or supplemental indenture establishing a particular series
of Debentures pursuant to Section 2.01 hereof.
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"Trustee" means Wilmington Trust Company, a Delaware banking corporation,
and, subject to the provisions of Article 7, shall also include its
successors and assigns, and, if at any time there is more than one person
acting in such capacity hereunder, "Trustee" shall mean each such person. The
term "Trustee" as used with respect to a particular series of the Debentures
shall mean the trustee with respect to that series.
"Trust Indenture Act", subject to the provisions of Section 9.01 and
9.02, means the Trust Indenture Act of 1939, as amended and in effect at the
date of execution of this Indenture.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to vote in the election of the board of directors, managers or
trustees of any Person (irrespective of whether or not, at the time, Capital
Stock of any other class or classes shall have, or might have, voting power
by reason of the happening of any contingency).
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION REGISTRATION AND EXCHANGE OF DEBENTURES
SECTION 2.01. DESIGNATION, TERMS, AMOUNT, AUTHENTICATION AND DELIVERY OF
DEBENTURES. The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by
or pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a
particular series. Prior to the initial issuance of Debentures of any series,
there shall be established in or pursuant to a Board Resolution, and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto:
(1) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures
of that series which may be authenticated and delivered under this
Indenture (except for Debentures authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other
Debentures of that series);
(3) the date or dates on which the principal of the Debentures of the
series is payable and the right to shorten, extend or defer such date
or dates;
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(4) the rate or rates at which the Debentures of the series shall
bear interest or the manner of calculation of such rate or rates, if
any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the
manner of determination of such Interest Payment Dates and the record
date for the determination of holders to whom interest is payable on
any such Interest Payment Dates;
(6) the right, if any, to extend or defer the interest payment
periods and the duration of such extension;
(7) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Debentures of the series may
be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debentures of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which, the
currency or currencies (including currency unit or units) in which and
the terms and conditions upon which, Debentures of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) any exchangeability, conversion or prepayment provisions of the
Debentures;
(10) the form of the Debentures of the series including the form of
the Certificate of Authentication for such series;
(11) if other than denominations of $25 or any integral multiple
thereof, the denominations in which the Debentures of the series shall
be issuable;
(12) whether the Debentures are issuable as one or more Global
Debentures and, in such case, the identity of the Depositary for such
series, the form of any legend or legends which shall be borne by any
such Global Debentures in addition to or in lieu of that set forth in
Section 2.11 and any circumstances in addition to or in lieu of those
set forth in Section 2.11 in which any such Global Debentures may be
exchanged in whole or in part for Debentures registered, and any
transfer of such Global Debentures in whole or in part may be
registered, in the name or names of Persons other than the Depositary
for such Global Debentures or a nominee thereof;
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(13) if the Debentures of such series are to be deposited as trust
assets in a Trust the name of the applicable Trust (which shall
distinguish such statutory business trust from all other Trusts) into
which the Debentures of such series are to be deposited as trust
assets and the date of its Declaration of Trust;
(14) the place or places where the principal of (and premium, if any)
and interest on the Debentures of such series shall be payable, the
place or places where the Debentures of such series may be presented
for registration of transfer or exchange, and the place or places
where notices and demands to or upon the Company in respect of the
Debentures of such series may be made;
(15) if other than U.S. dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Debentures of the series shall be
payable, or in which the Debentures of the series shall be
denominated;
(16) the additions, modifications or deletions, if any, in the Events
of Default or covenants of the Company set forth herein with respect
to the Debentures of such series;
(17) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable
upon declaration of acceleration of the maturity thereof;
(18) the additions or changes, if any, to this Indenture with respect
to the Debentures of such series as shall be necessary to permit or
facilitate the issuance of the Debentures of such series in bearer
form, registrable or not registrable as to principal, and with or
without interest coupons;
(19) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Debentures of such series or
the manner in which such amounts will be determined;
(20) the appointment of any paying agent or agents for the Debentures
of such series;
(21) the relative degree, if any, to which the Debentures of such
series shall be senior to or be subordinated to other series of
Debentures in right of payment, whether such other series of
Debentures are Outstanding or not; and
(22) any and all other terms with respect to the Debentures of such
series (and any terms which may be required by or advisable under
applicable laws or regulations not inconsistent with the terms of this
Indenture).
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All Debentures of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
any such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 2.02. FORM OF DEBENTURE AND TRUSTEE'S CERTIFICATE. The
Debentures of any series and the Trustee's certificate of authentication to
be borne by such Debentures shall be substantially of the tenor and purport
as set forth in one or more indentures supplemental hereto or as provided in
a Board Resolution and as set forth in an Officers' Certificate, and may have
such letters, numbers or other marks of identification or designation and
such legends or endorsements typewritten, printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Indenture, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or automated quotation system on which
Debentures of that series may be listed or traded, or to conform to usage.
SECTION 2.03. DATE AND DENOMINATIONS OF DEBENTURES AND PROVISIONS FOR
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Debentures shall be issuable
as registered Debentures and in the denominations of $25 or any integral
multiple thereof, subject to Section 2.01(11). The Debentures of a particular
series shall bear interest payable on the dates and at the rate specified
with respect to that series. The principal of and the interest on the
Debentures of any series, as well as any premium thereon in case of
redemption thereof prior to maturity, shall, subject to Section 2.01(8) and
(15), be payable in the coin or currency of the United States of America
which at the time is legal tender for public and private debt, at Place of
Payment. Each Debenture shall be dated the date of its authentication.
Interest on the Debentures shall be computed on the basis of a 360-day year
composed of twelve 30-day months, subject to Section 2.01(5).
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
Debenture (or one or more Predecessor Debentures) is registered at the close
of business on the regular record date for such interest installment. In the
event that any Debenture of a particular series or portion thereof is called
for redemption and the redemption date is subsequent to a regular record date
with respect to any Interest Payment Date and prior to such Interest Payment
Date, interest on such Debenture will be paid upon presentation and surrender
of such Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the
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relevant regular record date by virtue of having been such holder; and such
Defaulted Interest shall be paid by the Company, at its election, as provided
in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or
their respective Predecessor Debentures) are registered at the
close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following
manner: the Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such
Debenture and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in
trust for the benefit of the persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall
fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company
of such special record date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to
be mailed, first class postage prepaid, to each Debentureholder
at his or her address as it appears in the Debenture Register,
not less than 10 days prior to such special record date. Notice
of the proposed payment of such Defaulted Interest and the
special record date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the persons in whose
names such Debentures (or their Predecessor Debentures) are
registered on such special record date and shall be no longer
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
any Debentures in any other lawful manner not inconsistent with
the requirements of any securities exchange or automated
quotation system on which such Debentures may be listed or
traded, and upon such notice as may be required by such exchange
or quotation system, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to
any Interest Payment Date for such series shall mean either the fifteenth day
of the month immediately preceding the month in which an Interest Payment
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Date established for such series pursuant to Section 2.01 hereof shall occur,
if such Interest Payment Date is the first day of a month, or the last day of
the month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if
such Interest Payment Date is the fifteenth day of a month, whether or not
such date is a Business Day.
Subject to the foregoing provisions of this Section, each Debenture of a
series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debenture.
SECTION 2.04. EXECUTION OF DEBENTURES. The Debentures shall, subject to
the provisions of Section 2.06, be printed on steel engraved borders or fully
or partially engraved, or legibly typed, as the proper officers of the
Company may determine, and shall be signed on behalf of the Company by the
Chairman or Vice Chairman of its Board of Directors or its Chief Executive
Officer, President or one of its Vice Presidents, under its corporate seal
attested by its Secretary or one of its Assistant Secretaries. The signature
of the Chairman, Vice Chairman, Chief Executive Officer, President or a Vice
President and/or the signature of the Secretary or an Assistant Secretary in
attestation of the corporate seal, upon the Debentures, may be in the form of
a manual or facsimile signature and may be imprinted or otherwise reproduced
on the Debentures and for that purpose the Company may use the manual or
facsimile signature of any person who shall have been a Chairman, Vice
Chairman, Chief Executive Officer, President or Vice President, or of any
person who shall have been a Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of such person shall have ceased to
be the Chairman, Vice Chairman, President or a Vice President, or the
Secretary or an Assistant Secretary, of the Company, as the case may be. The
seal of the Company may be in the form of a facsimile of the seal of the
Company and may be impressed, affixed, imprinted or otherwise reproduced on
the Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate executed by the Trustee, or by any Authenticating Agent
appointed by the Trustee with respect to such Debentures, upon any Debenture
executed by the Company shall be conclusive evidence that the Debenture so
authenticated has been duly authenticated and made available for delivery
hereunder and that the holder is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Debenture shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Debenture to the Trustee for cancellation as
provided in Section 2.08, for all purposes of this Indenture such Debenture
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
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At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by
the Company to the Trustee for authentication, together with a written order
of the Company for the authentication and delivery of such Debentures, signed
by its President or any Vice President and its Treasurer or any Assistant
Treasurer, and the Trustee in accordance with such written order shall
authenticate and make available for delivery such Debentures. Each Debenture
shall be dated the date of its authentication by the Trustee.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of
this Indenture.
The Trustee shall not be required to authenticate such Debentures if the
issue of such Debentures pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
SECTION 2.05. EXCHANGE OF DEBENTURES. (a) Debentures of any series may
be exchanged upon presentation thereof at a Place of Payment, for other
Debentures of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, all as provided in this
Section. In respect of any Debentures so surrendered for exchange, the
Company shall execute, the Trustee shall authenticate and such office or
agency shall make available for delivery in exchange therefor the Debenture
or Debentures of the same series which the Debentureholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at the Corporate Trust
Office of the Trustee (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment is herein
sometimes collectively referred to as the "Debenture Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
register the Debentures and the transfers of Debentures as in this Article
provided and which at all reasonable times shall be open for inspection by
the Trustee. The registrar for the purpose of registering Debentures and
transfer of Debentures as herein provided shall be appointed by the Company
(the "Debenture Registrar"). The initial Debenture Registrar shall be the
Trustee.
Upon surrender for transfer of any Debenture at the office or agency of
the Company in a Place of Payment, the Company shall execute and the Trustee
shall authenticate and deliver, in the name of the transferee or transferees,
one or more new Debentures of the same series as the Debenture presented, of
any authorized denominations and of like tenor and aggregate principal amount.
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All Debentures presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Debenture Registrar) by a written instrument or instruments
of transfer, in form satisfactory to the Company or the Debenture Registrar,
duly executed by the registered holder or by his duly authorized attorney in
writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial redemption
of any series, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any
transfer.
(d) The Company shall not be required (i) to issue, exchange or register
the transfer of any Debentures during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of less
than all the outstanding Debentures of the same series and ending at the close
of business on the day of such mailing, nor (ii) to register the transfer of or
exchange any Debentures of any series or portions thereof called for redemption.
The provisions of this Section 2.05 are, with respect to any Global Debenture,
subject to Section 2.11 hereof.
SECTION 2.06. TEMPORARY DEBENTURES. Pending the preparation of definitive
Debentures of any series, the Company may execute, and the Trustee shall
authenticate and make available for delivery, temporary Debentures (printed,
lithographed or typewritten) of any authorized denomination, and substantially
in the form of the definitive Debentures in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Debentures, all as may be determined by the Company. Every temporary
Debenture of any series shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures of such series. Without
unnecessary delay the Company will execute and will furnish definitive
Debentures of such series and thereupon any or all temporary Debentures of such
series may be surrendered in exchange therefor (without charge to the holders),
at a Place of Payment, and upon receipt of a written order of the Company signed
by its President or any Vice President and its Treasurer or any Assistant
Treasurer, the Trustee shall authenticate and deliver in exchange for such
temporary Debentures an equal aggregate principal amount of definitive
Debentures of such series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of such series authenticated and delivered hereunder.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. In case
any temporary or definitive Debenture shall become mutilated or be destroyed,
lost or stolen, the Company (subject to the next succeeding sentence) shall
execute, and upon its written request the Trustee (subject as aforesaid) shall
authenticate and make available for delivery, a new
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Debenture of the same series bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen.
In every case the applicant for a substituted Debenture shall furnish to the
Company and to the Trustee such security or indemnity as may be required by
them to save each of them harmless, and, in every case of destruction, loss
or theft, the applicant shall also furnish to the Company and to the Trustee
evidence to their satisfaction of the destruction, loss or theft of the
applicant's Debenture and of the ownership thereof. The Trustee may
authenticate any such substituted Debenture and make available for delivery
the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Debenture, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith. In case any Debenture which has matured or is about to mature
shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Debenture, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and
to the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft
of such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08. CANCELLATION OF SURRENDERED DEBENTURES. All Debentures
surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered
to the Trustee for cancellation, or, if surrendered to the Trustee, shall be
cancelled by it, and no Debentures shall be issued in lieu thereof except as
expressly required or permitted by any of the provisions of this Indenture. On
written request of the Company, the Trustee shall deliver to the Company
cancelled Debentures held by the Trustee. If the Company shall otherwise acquire
any of the Debentures, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
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SECTION 2.09. PROVISIONS OF INDENTURE AND DEBENTURES FOR SOLE BENEFIT OF
PARTIES AND DEBENTUREHOLDERS. Nothing in this Indenture or in the Debentures,
express or implied, shall give or be construed to give to any Person, other than
the parties hereto and the holders of the Debentures, any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any
covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debentures.
SECTION 2.10. APPOINTMENT OF AUTHENTICATING AGENT. So long as any of the
Debentures of any series remain outstanding there may be an Authenticating Agent
for any or all such series of Debentures which the Trustee shall have the right
to appoint. Said Authenticating Agent shall be authorized to act on behalf of
the Trustee to authenticate Debentures of such series issued upon exchange,
transfer or partial redemption thereof, and Debentures so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Debentures by the Trustee shall be
deemed to include authentication by an Authenticating Agent for such series
except for authentication upon original issuance or pursuant to Section 2.07
hereof. Each Authenticating Agent shall be acceptable to the Company and shall
be a corporation which has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a trust
business, and which is otherwise authorized under such laws to conduct such
business and is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease to be eligible
in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time (and
upon request by the Company shall) terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
to the Company. Upon resignation, termination or cessation of eligibility of
any Authenticating Agent, the Trustee may appoint an eligible successor
Authenticating Agent acceptable to the Company. Any successor Authenticating
Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally
named as an Authenticating Agent pursuant hereto.
SECTION 2.11. GLOBAL DEBENTURES. (a) If the Company shall establish
pursuant to Section 2.01 that the Debentures of a particular series are to be
issued as one or more Global Debentures, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, one or
more Global Debentures which (i) shall represent, and shall be denominated in an
aggregate amount equal to the aggregate principal amount of, all of the
Outstanding Debentures of such series, (ii) shall be registered in the name of
the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear,
subject to Section
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2.01(12), a legend substantially to the following effect: "Except as
otherwise provided in Section 2.11 of the Indenture, this Debenture may be
transferred, in whole but not in part, only to another nominee of the
Depositary or to a successor Depositary or to a nominee of such successor
Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global Debenture
of a series may be transferred, in whole but not in part and in the manner
provided in Section 2.05, only to another nominee of the Depositary for such
series, or to a successor Depositary for such series selected or approved by the
Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of Debentures notifies the
Company that it is unwilling or unable to continue as Depositary for such series
or if at any time the Depositary for such series shall no longer be registered
or in good standing under the Exchange Act, or other applicable statute or
regulation and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, this Section 2.11 shall no longer be
applicable to the Debentures of such series and the Company will execute, and
subject to Section 2.05, the Trustee will authenticate and make available for
delivery Debentures of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debentures of such series in exchange for
such Global Debentures. In addition, the Company may at any time determine that
the Debentures of any series shall no longer be represented by one or more
Global Debentures and that the provisions of this Section 2.11 shall no longer
apply to the Debentures of such series. In such event the Company will execute
and subject to Section 2.05, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate and
deliver Debentures of such series in definitive registered form without coupons,
in authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debentures of such series in exchange for such
Global Debentures. Upon the exchange of the Global Debentures for such
Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debentures shall be cancelled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debentures pursuant to this Section 2.11(c) shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Debentures to the Depositary for
delivery to the persons in whose name such Debentures are so registered.
(d) Debentures distributed to holders of Global Certificates (as defined in
the applicable Declaration of Trust) upon the dissolution of the applicable
Trust shall be distributed in the form of one or more Global Debentures
registered in the name of the Depositary or its nominee, and deposited with the
Debenture Registrar, as custodian for the Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Debentures represented thereby (or such other accounts as they may
direct). Prior to the distribution of Debentures to holders of Global
Certificates
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upon the dissolution of the applicable Trust, the Company shall designate the
Depositary in writing to the Trustee. Debentures distributed to holders of
Certificates (as defined in the applicable Declaration of Trust), other than
Global Certificates, upon the dissolution of the applicable Trust shall not
be issued in the form of a Global Debenture or any other form intended to
facilitate book-entry trading in beneficial interests in such Debentures.
(e) The Depositary or its nominee, as the registered owner of a Global
Debenture, shall be the holder of such Global Debenture for all purposes under
this Indenture and the Debentures, and owners of beneficial interests in a
Global Debenture shall hold such interests pursuant to the applicable procedures
of the Depositary. Accordingly, any such owner's beneficial interest in a
Global Debenture shall be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its participants. None of the Company, the Trustee or the Debenture Registrar
shall have any liability in respect of any transfer effected by the Depositary.
(f) The rights of owners of beneficial interests in a Global Debenture
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its participants.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Debentures may
use "CUSIP" numbers, and the Trustee shall use such CUSIP numbers in notices of
redemption or exchange as a convenience to Debentureholders and no
representation shall be made as to the correctness of such numbers either as
printed on the Debentures or as contained in any notice of redemption or
exchange.
ARTICLE 3
REDEMPTION OF DEBENTURES AND SINKING FUND PROVISIONS
SECTION 3.01. REDEMPTION. The Company may redeem the Debentures of any
series issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01 hereof.
SECTION 3.02. NOTICE OF REDEMPTION. (a) In case the Company shall desire
to exercise such right to redeem all or, as the case may be, a portion of the
Debentures of any series in accordance with the right reserved so to do, it
shall give notice of such redemption to the Trustee at least 45 days in advance
of the date fixed for redemption. The Trustee shall then notify holders of the
Debentures of such series who are to be redeemed by mailing, first class postage
prepaid, by a notice of such redemption not less than 30 days and not more than
60 days before the date fixed for redemption of that series to such holders at
their last addresses as they shall appear upon the Debenture Register. Any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the registered holder receives
the notice. In any case, failure duly to give such notice
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to the holder of any Debenture of any series designated for redemption in
whole or in part, or any defect in the notice, shall not affect the validity
of the proceedings for the redemption of any other Debentures of such series
or any other series. In the case of any redemption of Debentures prior to
the expiration of any restriction on such redemption provided in the terms of
such Debentures or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with any such
restriction.
Each such notice of redemption shall identify the Debentures to be redeemed
(including CUSIP number) and shall specify:(i) the date fixed for
redemption,(ii) the redemption price at which Debentures of that series are to
be redeemed,(iii) the place or places where Debentures are to be surrendered for
payment of the redemption price,(iv) that payment of the redemption price will
be made upon presentation and surrender of such Debentures at such place or
places,(v) that interest accrued to the date fixed for redemption will be paid
as specified in said notice,(vi) that from and after said date interest will
cease to accrue and (vii) that the redemption is for a sinking fund, if such is
the case. If less than all the Debentures of a series are to be redeemed, the
notice to the holders of Debentures of that series to be redeemed in whole or in
part shall specify the particular Debentures to be so redeemed. In case any
Debenture is to be redeemed in part only, the notice which relates to such
Debenture shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon surrender
of such Debenture, a new Debenture or Debentures of such series in principal
amount equal to the unredeemed portion thereof will be issued.
(b) In the event of a partial redemption of a series of Debentures, the
Company shall give the Trustee at least 45 days' notice in advance of the date
fixed for redemption as to the aggregate principal amount of Debentures of the
series to be redeemed and the other information set forth in the immediately
preceding paragraph, and thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to $25 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed, in whole or in part. For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption of
Debentures shall relate, in the case of any Debenture redeemed or to be redeemed
only in part, to the portion of the principal amount of such Debenture which has
been or is to be redeemed. If the Company shall so direct, Debentures registered
in the name of the Company, any Affiliate or any Subsidiary thereof shall not be
included in the Debentures selected for redemption.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the
Debentures of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In
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any case in which notice of redemption is to be given by the Trustee or any
such paying agent, the Company shall deliver or cause to be delivered to, or
permit to remain with, the Trustee or such paying agent, as the case may be,
such Debenture Register, transfer books or other records, or suitable copies
or extracts therefrom, sufficient to enable the Trustee or such paying agent
to give any notice by mail that may be required under the provisions of this
Section.
SECTION 3.03. PAYMENT UPON REDEMPTION. (a) If the giving of notice of
redemption shall have been completed as above provided and funds deposited as
required, the Debentures or portions of Debentures of the series to be redeemed
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable redemption price, together with
interest accrued to, but excluding, the date fixed for redemption, and interest
on such Debentures or portions of Debentures shall cease to accrue on and after
the date fixed for redemption, unless the Company shall default in the payment
of such redemption price and accrued interest with respect to any such Debenture
or portion thereof. On presentation and surrender of such Debentures on or
after the date fixed for redemption at the place of payment specified in the
notice, said Debentures shall be paid and redeemed at the applicable redemption
price for such series, together with interest accrued thereon to, but excluding,
the date fixed for redemption (but if the date fixed for redemption is an
interest payment date, the interest installment payable on such date shall be
payable to the registered holder at the close of business on the applicable
record date pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available for delivery to the holder thereof, at the expense of the
Company, a new Debenture or Debentures of the same series, of authorized
denominations in principal amount equal to the unredeemed portion of the
Debenture so presented.
SECTION 3.04. SINKING FUNDS FOR DEBENTURES. The provisions of Sections
3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement
of Debentures of a series, except as otherwise specified as contemplated by
Section 2.01 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Debentures of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Debentures of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Debentures for any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption of
Debentures of any series as provided for by the terms of Debentures of such
series.
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SECTION 3.05. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBENTURES. The
Company (i) may deliver outstanding Debentures of a series (other than any
previously called for redemption) and (ii) may apply as a credit Debentures of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Debentures or through the application of permitted optional
sinking fund payments pursuant to the terms of such Debentures, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debentures of such series required to be made pursuant to the terms of such
Debentures as provided for by the terms of such series; provided that such
Debentures have not been previously so credited. Such Debentures shall be
received and credited for such purpose by the Trustee at the redemption price
specified in such Debentures for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.06. REDEMPTION OF DEBENTURES FOR SINKING FUND. Not less than 45
days prior to each sinking fund payment date for any series of Debentures, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms for that series, the portion thereof, if any, which is to be satisfied by
delivering and crediting Debentures of that series pursuant to Section 3.05 and
the basis for such credit and will, together with such Officers' Certificate,
deliver to the Trustee any Debentures to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Debentures to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.02 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 3.02. Such notice having been duly given, the redemption of such
Debentures shall be made upon the terms and in the manner stated in Section
3.03.
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
The Company covenants and agrees for each series of the Debentures as
follows:
SECTION 4.01. PAYMENT OF PRINCIPAL OF (AND PREMIUM, IF ANY) AND INTEREST
ON DEBENTURES. The Company will duly and punctually pay or cause to be paid
the principal of (and premium, if any) and interest on the Debentures of that
series at the time and place and in the manner provided herein and established
with respect to such Debentures.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENT FOR PAYMENT OF DEBENTURES,
DESIGNATION OF OFFICE OR AGENCY FOR PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
OF DEBENTURES. So long as any series of the Debentures remain outstanding, the
Company agrees to maintain an office or agency in each Place of Payment, with
respect to each such series and at such other location or locations as may be
designated as provided in this Section 4.02, where (i) Debentures of that series
may be presented for payment, (ii) Debentures of
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that series may be presented as hereinabove authorized for registration of
transfer and exchange, and (iii) notices and demands to or upon the Company
in respect of the Debentures of that series and this Indenture may be given
or served, such designation to continue with respect to such office or agency
until the Company shall, by written notice signed by its President or a Vice
President and delivered to the Trustee, designate some other office or agency
for such purposes or any of them. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, notices and demands may
be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands.
SECTION 4.03. DUTIES OF PAYING AGENT; COMPANY AS PAYMENT AGENT; AND
HOLDING SUMS IN TRUST. (a) If the Company shall appoint one or more paying
agents for all or any series of the Debentures, other than the Trustee, the
Company will cause each such paying agency to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on
the Debentures of that series (whether such sums have been paid
to it by the Company or by any other obligor of such Debentures)
in trust for the benefit of the persons entitled thereto:
(2) that it will give the Trustee written notice of any failure
by the Company (or by any other obligor of such Debentures) to
make any payment of the principal of (and premium, if any) or
interest on the Debentures of that series when the same shall be
due and payable;
(3) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(2) above, upon
the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to any
series of the Debentures, it will on or before each due date of the principal of
(and premium, if any) or interest on Debentures of that series, set aside,
segregate and hold in trust for the benefit of the persons entitled thereto a
sum sufficient to pay such principal (and premium, if any) or interest so
becoming due on Debentures of that series until such sums shall be paid to such
persons or otherwise disposed of as herein provided and will promptly notify in
writing the Trustee of such action, or any failure (by it or any other obligor
on such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of
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Debentures, it will, prior to 11:00 a.m., New York City time on each due date
of the principal of (and premium, if any) or interest on any Debentures of
that series, deposit with the paying agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the persons entitled to such principal,
premium or interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 4.04. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
ARTICLE 5
DEBENTUREHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF DEBENTUREHOLDERS. The Company will furnish or cause to be
furnished to the Trustee (a) on each regular record date (as defined in Section
2.03) a list, in such form as the Trustee may reasonably require, of the names
and addresses of the holders of each series of Debentures as of such regular
record date, provided, that the Company shall not be obligated to furnish or
cause to be furnished such list at any time that the list shall not differ in
any respect from the most recent list furnished to the Trustee by the Company
and (b) at such other times as the Trustee may request in writing within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, no such list need be furnished for any series for
which the Trustee shall be the Debenture Registrar.
SECTION 5.02. TRUSTEE TO PRESERVE INFORMATION AS TO NAMES AND ADDRESSES OF
DEBENTUREHOLDERS. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
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(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Debenture for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debentures of such series or holders of all Debentures with respect to their
rights under this Indenture or under such Debentures, and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall within five Business Days after the receipt
of such application, at its election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 5.02; or
(2) inform such applicants as to the approximate number of holders of
Debentures of such series or of all Debentures, as the case may be,
whose names and addresses appear in the information preserved at the
time by the Trustee, in accordance with the provisions of subsection
(a) of this Section 5.02, and as to the approximate cost of mailing to
such Debentureholders the form of proxy or other communication, if
any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Debentures of such series or of all Debentures, as the case may
be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Debentureholders with reasonable
promptness after the entry of such order and the renewal of
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such tender; otherwise, the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
subsection (c) of this Section 5.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(c).
SECTION 5.03. ANNUAL AND OTHER REPORTS TO BE FILED BY COMPANY WITH THE
TRUSTEE. (a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in
such rules and regulations. Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
as may be required by rules and regulations prescribed from time to time by the
Commission.
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(d) The Company covenants and agrees to furnish to the Trustee, on or
before May 15 in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
SECTION 5.04. TRUSTEE TO TRANSMIT ANNUAL REPORT TO DEBENTUREHOLDERS.
(a)The Trustee shall transmit to Debentureholders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
If required by Section 313(a) of the Trust Indenture Act, the Trustee shall,
within 60 days after each May 15 following the date of this Indenture,
commencing May 15, 2000, deliver to Debentureholders a brief report, dated as of
such May 15, which complies with the provisions of such Section 313(a).
(b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT DEFINED. (a) Whenever used herein with
respect to Debentures of a particular series, "Event of Default" means any one
or more of the following events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon any of
the Debentures of that series, as and when the same shall become due
and payable, and continuance of such default for a period of 90 days;
provided, however, that a valid extension of an interest payment
period by the Company, in accordance with the terms of Debentures of
that series established pursuant to Section 2.01 hereof, shall not
constitute a default in the payment of interest for this purpose;
(2) default (i) in the payment of the principal of (and premium, if
any, on) any of the Debentures of that series as and when the same
shall become due and payable whether at maturity, upon redemption, by
declaring or otherwise, or (ii) in any payment required by any sinking
or analogous fund established
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with respect to that series, and in the case of this clause (ii) only,
continuance of such default for a period of 90 days;
(3) failure on the part of the Company duly to observe or perform, in
any material respect, any other of the covenants or agreements on the
part of the Company with respect to that series contained in such
Debentures or otherwise established with respect to that series of
Debentures pursuant to Section 2.01 hereof or contained in this
Indenture (other than a covenant or agreement which has been expressly
included in this Indenture solely for the benefit of one or more
series of Debentures other than such series) for a period of 90 days
after the date on which written notice of such failure, requiring the
same to be remedied and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by the
Trustee, by registered or certified mail, or to the Company and the
Trustee by the holders of at least 25% in principal amount of the
Debentures of that series at the time Outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of the Company under the Federal
Bankruptcy Code or any other similar applicable Federal or State law,
and such decree or order shall have continued unvacated and unstayed
for a period of 90 days; or an involuntary case shall be commenced
under such Code in respect of the Company and shall continue
undismissed for a period of 90 days or an order for relief in such
case shall have been entered; or a decree or order of a court having
jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall have
remained in force unvacated and unstayed for a period of 90 days;
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking liquidation or reorganization under the Federal Bankruptcy
Code or any other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of it or of its property, or shall make an assignment for
the benefit of creditors; or
(6) any other Event of Default provided with respect to Debentures of
that series.
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(b) In each and every such case, unless the principal of all the
Debentures of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debentures of that series then Outstanding hereunder, by notice in writing to
the Company (and to the Trustee if given by such Debentureholders), may declare
the principal of all the Debentures of that series to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything contained in this Indenture or in the
Debentures of that series or established with respect to that series pursuant to
Section 2.01 to the contrary notwithstanding. Payment of principal and interest
on such Debentures shall remain subordinated to the extent provided in Article
14 notwithstanding that such amount shall become immediately due and payable as
herein provided.
(c) SECTION 6.01(b), however, is subject to the condition that if, at any
time after the principal of the Debentures of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of that series and the
principal of (and premium, if any, on) any and all Debentures of that series
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Debentures of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and any and all defaults under the Indenture, other than the nonpayment of
principal on Debentures of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06 then and
in every such case the holders of a majority in aggregate principal amount of
the Debentures of that series then outstanding (subject to, in the case of any
series of Debentures held as trust assets of a Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of the holders of
the Preferred Securities and the Common Securities of such Trust as may be
required under the Declaration of Trust of such Trust), by written notice to the
Company and to the Trustee, may rescind and annul such declaration and its
consequences with respect to that series of Debentures; but no such rescission
and annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case the Company and the
Trustee shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company and the Trustee
shall continue as though no such proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the Debentures of any
series, a Default with respect to the Debentures of such series shall have
occurred, the Company
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expressly acknowledges that under the circumstances set forth in the
applicable Declaration of Trust, any holder of Preferred Securities of the
applicable Trust may, to the fullest extent permitted by law, enforce
directly against the Company the applicable Property Trustee's rights
hereunder. In furtherance of the foregoing and for the avoidance of any
doubt, the Company acknowledges that, under the circumstances described in
the applicable Declaration of Trust, any such holder of Preferred Securities,
in its own name, in the name of the applicable Trust or in the name of the
holders of the Preferred Securities issued by such Trust, may institute or
cause to be instituted a proceeding, including, without limitation, any suit
in equity, an action at law or other judicial or administrative proceeding,
to enforce the applicable Property Trustee's rights hereunder directly
against the Company as issuer of the applicable series of Debentures, and may
prosecute such proceeding to judgment or final decree, and enforce the same
against the Company.
SECTION 6.02. COVENANT OF COMPANY TO PAY TO TRUSTEE WHOLE AMOUNT DUE ON
DEBENTURES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL (AND PREMIUMS, IF
ANY). (a) The Company covenants that (1) in case default shall be made in
(A) the payment of any installment of interest on any of the Debentures of a
series and such default shall have continued for a period of 30 days, or (B)
any payment required by any sinking or analogous fund established with
respect to that series as and when the same shall have become due and
payable, and such default shall have continued for a period of 90 days, or
(2) in case default shall be made in the payment of the principal of (or
premium, if any, on) any of the Debentures of a series when the same shall
have become due and payable, whether upon maturity of the Debentures of a
series or upon redemption or upon declaration or otherwise, then, upon demand
of the Trustee, the Company will pay to the Trustee, for the benefit of the
holders of the Debentures of that series, the whole amount that then shall
have become due and payable on all such Debentures for principal (and
premium, if any) or interest, or both, as the case may be, with interest upon
the overdue principal (and premium, if any) and (to the extent that payment
of such interest is enforceable under applicable law and without duplication
of any other amounts paid by the Company or the applicable Trust in respect
thereof) upon overdue installments of interest at the rate per annum
expressed in the Debentures of that series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company,
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any other obligor on such Debentures, or the creditors or property of either,
the Trustee shall have the power to intervene in such proceedings and take
any action therein that may be permitted by the court and shall (except as
may be otherwise provided by law) be entitled to file such proofs of claim
and other papers and documents as may be necessary or advisable in order to
have the claims of the Trustee and of the holders of Debentures of such
series allowed for the entire amount due and payable by the Company or such
other obligor under the Indenture at the date of institution of such
proceedings and for any additional amount which may become due and payable by
the Company or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Debentures of
such series to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to such
Debentureholders, to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture, or
under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of such
series.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
SECTION 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
collected by the Trustee pursuant to this Article with respect to a particular
series of Debentures shall be applied in the order following, at the date or
dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal (or premium, if any) or interest, upon presentation of the
several Debentures of that series, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
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FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all Senior Debt of the Company if and to the
extent required by Article 14;
THIRD: To the payment of the amounts then due and unpaid upon Debentures
of such series for principal (and premium, if any) and interest, in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Debentures for principal (and premium, if
any) and interest, respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled thereto.
SECTION 6.04. LIMITATION ON SUITS BY HOLDERS OF DEBENTURES. No holder of
any Debenture of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(i) such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to Debentures of
such series specifying such Event of Default, as hereinbefore provided,(ii) the
holders of not less than 25% in aggregate principal amount of the Debentures of
such series then outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as trustee
hereunder,(iii) shall have offered to the Trustee indemnity satisfactory to it
against the costs, expenses and liabilities to be incurred therein or
thereby,(iv) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity, shall have failed to institute any such action, suit or
proceeding and (v) during such 60 day period, the holders of a majority in
principal amount of the Debentures of that series do not give the Trustee a
direction inconsistent with the request; it being understood and intended, and
being expressly covenanted by the taker and holder of every Debenture of such
series with every other such taker and holder and Trustee, that no one or more
holders of Debentures of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures of such series. For the protection and enforcement of the
provisions of this Section, each and every Debentureholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture, however, the right
of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed
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in such Debenture (or in the case of redemption, on the redemption date), or
to institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected
without the consent of such holder.
SECTION 6.05. REMEDIES CUMULATIVE; DELAY OR OMISSION IN EXERCISE OF RIGHTS
NOT WAIVER OF DEFAULT.
(a) All powers and remedies given by this Article 6 to the Trustee or to
the Debentureholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any others thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce performance or observance of the covenants
and agreements contained in this Indenture or otherwise established with respect
to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
SECTION 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF
DEBENTURES TO DIRECT TRUSTEE AND TO WAIVE DEFAULTS. The holders of a majority
in aggregate principal amount of the Debentures of any series at the time
Outstanding, determined in accordance with Section 8.04 (with, in the case of
any series of Debentures held as trust assets of a Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of holders
of the Preferred Securities and the Common Securities of such Trust as may be
required under the Declaration of Trust of such Trust), shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect to such series; provided, however, that such direction
shall not be in conflict with any rule of law or with this Indenture or unduly
prejudicial to the rights of holders of Debentures of any other series at the
time Outstanding determined in accordance with Section 8.04 not parties thereto.
Subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Debentures of any series at the
time Outstanding affected thereby, determined in accordance with section 8.04
(with, in the case of any series of Debentures held as trust assets of a Trust
and with respect to which a Security Exchange has not theretofore occurred, such
consent of holders of the Preferred Securities and the Common Securities of such
Trust as may be required under the Declaration of Trust of such Trust), may on
behalf of the holders of all of the Debentures of such series waive any past
default in the performance of any of the covenants contained
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herein or established pursuant to Section 2.01 with respect to such series
and its consequences, except a default in the payment of the principal of, or
premium, if any, or interest on, any of the Debentures of that series as and
when the same shall become due by the terms of such Debentures otherwise than
by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any premium has
been deposited with the Trustee (in accordance with Section 6.01(c)), or a
call for redemption of Debentures of that series. Upon any such waiver, the
default covered thereby shall be deemed to be cured for all purposes of this
Indenture and the Company, the Trustee and the holders of the Debentures of
such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first class postage prepaid, to the holders of Debentures of that series, as
their names and addresses appear upon the Debenture Register, notice of all
defaults with respect to that series known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
periods of grace provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Debentures of
that series; provided further, that in the case of any default of the character
specified in Section 6.01(a)(3) with respect to Debentures of such series no
such notice to the holders of the Debentures of that series shall be given until
at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default, except
(i) a default under subsection (a)(1) or (a)(2) of Section 6.01 as long as the
Trustee is acting as paying agent for such series of Debentures or (ii) any
default as to which a Responsible Officer of the Trustee shall have received
written notice.
SECTION 6.08. REQUIREMENTS OF AN UNDERTAKING TO PAY COSTS IN CERTAIN SUITS
UNDER INDENTURE OR AGAINST TRUSTEE. All parties to this Indenture agree, and
each holder of any Debentures by his or her acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and
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good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to
this Indenture.
ARTICLE 7
Concerning the Trustee
Section 7.01. UPON EVENT OF DEFAULT OCCURRING AND CONTINUING, TRUSTEE
SHALL EXERCISE POWERS VESTED IN IT, AND USE SAME DEGREE OF CARE AND SKILL IN
THEIR EXERCISE, AS PRUDENT INDIVIDUAL WOULD USE. (a) The Trustee, prior to the
occurrence of an Event of Default with respect to Debentures of a series and
after the curing of all Events of Default with respect to Debentures of that
series which may have occurred, shall undertake to perform with respect to
Debentures of such series such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default with respect to
Debentures of a series has occurred (which has not been cured or waived), the
Trustee shall exercise with respect to Debentures of that series such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect
to Debentures of a series and after the curing or waiving of all
such Events of Default with respect to that series which may have
occurred:
(i) the duties and obligations of the Trustee shall with
respect to Debentures of such series be determined solely by
the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable with
respect to Debentures of such series except for the
performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
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(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to Debentures of such
series conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture but need not confirm or
investigate the accuracy of mathematical calculations or
other facts stated therein;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal
amount of the Debentures of any series at the time outstanding
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Indenture with respect to
the Debentures of that series;
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably
assured to it; and
(5) whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the
provisions of this Article 7.
SECTION 7.02. CERTAIN RIGHTS OF THE TRUSTEE. Except as otherwise provided
in Section 7.01:
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement,
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instrument, opinion, report, notice, request, consent, order, approval,
bond, security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution
or an instrument signed in the name of the Company by the President or
any Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer (unless other evidence in
respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken or suffered or omitted hereunder in good faith and in reliance
thereon;
(d) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Debentureholders, pursuant to the
provisions of this Indenture, unless such Debentureholders shall have
offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing herein contained shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of
Default with respect to a series of the Debentures (which has not been
cured or waived) to exercise with respect to Debentures of that series
such of the rights and powers vested in it by this Indenture, and to
use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
such person's own affairs;
(e) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond, security, or other papers or documents, unless
requested in writing so to do by the holders of not less than a
majority in principal amount of the outstanding Debentures of the
particular series affected thereby (determined as provided in Section
8.04); PROVIDED, HOWEVER, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
indemnity satisfactory to it against such
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costs, expenses or liabilities as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Company
or, if paid by the Trustee, shall be repaid by the Company upon demand;
(g) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee
in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder.
SECTION 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN
DEBENTURES. (a) The recitals contained herein and in the Debentures (other
than the Certificate of Authentication on the Debentures) shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of such Debentures,
or for the use or application of any moneys paid over by the Trustee in
accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any
paying agent other than the Trustee.
SECTION 7.04. TRUSTEE, PAYING AGENT OR DEBENTURE REGISTRAR MAY OWN
DEBENTURES. The Trustee or any paying agent or Debenture Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 7.08 and 7.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, paying agent or Debenture
Registrar.
SECTION 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST WITHOUT
INTEREST. Subject to the provisions of Section 11.05, all moneys received by
the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree in writing to pay thereon.
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SECTION 7.06. TRUSTEE ENTITLED TO COMPENSATION, REIMBURSEMENT AND
INDEMNITY. (a) The Company covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as the Company
and the Trustee shall from time to time agree in writing (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the trusts
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify each of the
Trustee and its officers, agents, directors and employees for, and to hold them
harmless against, any loss, liability or expense including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee)
incurred without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this trust,
including the reasonable costs and expenses of defending itself against any
claim of liability in the premises. The provisions of this Section 7.06 shall
survive the termination of this Indenture and resignation or removal of the
Trustee.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Debentures upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Debentures.
SECTION 7.07. RIGHT OF TRUSTEE TO RELY ON CERTIFICATE OF OFFICERS OF
COMPANY WHERE NO OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise
provided in Sections 7.01 and 7.02, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or omitting
to take any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted to be taken by it under the provisions of this Indenture upon the faith
thereof.
SECTION 7.08. DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee has
or shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Trustee and the Company shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee from filing with
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the Commission the application referred to in the second to last paragraph of
said Section 310(b).
SECTION 7.09. REQUIREMENTS FOR ELIGIBILITY OF TRUSTEE. There shall at all
times be a Trustee with respect to the Debentures issued hereunder which shall
at all times be a corporation or banking association organized and doing
business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars, and subject to supervision or examination by
Federal, State, territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Company may not, nor
may any person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
SECTION 7.10. RESIGNATION OF TRUSTEE AND APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Debentures of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail,
first class postage prepaid, to the Debentureholders of such series, as their
names and addresses appear upon the Debenture Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Debentures of such series by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 60 days after the mailing of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Debentures of such series, or any Debentureholder of that series who has been a
bona fide holder of a Debenture or Debentures for at least six months may,
subject to the provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any
Debentureholder who has
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been a bona fide holder of a Debenture or Debentures for at least
six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then, in any
such case, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of
which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after
the mailing of such notice of removal, the Trustee so removed may
petition any court of competent jurisdiction for the appointment of a
successor trustee with respect to Debentures of such series, or any
Debentureholder of that series who has been a bona fide holder of a
Debenture or Debentures for at least six months may, subject to the
provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the removal of the
Trustee and the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. ACCEPTANCE BY SUCCESSOR TO TRUSTEE.
(a) In case of the appointment hereunder of a successor trustee with
respect to all Debentures, every such successor trustee so appointed shall
execute, acknowledge and
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deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor trustee all
property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which shall (1)
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Debentures of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein,
such retiring Trustee shall with respect to the Debentures of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, power and trusts referred to in
paragraph (a) or (b) of this Section 7.11, as the case may be.
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(d) No successor trustee shall accept its appointment unless at the time
of such acceptance such successor trustee shall be qualified and eligible under
this Article.
(e) Upon acceptance of appointment by a successor trustee as provided in
this Section 7.11, the successor trustee shall transmit notice of the succession
of such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register.
SECTION 7.12. SUCCESSOR TO TRUSTEE BY MERGER, CONSOLIDATION OR SUCCESSION
TO BUSINESS. Any corporation or banking association into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. In case any Debentures shall have been authenticated,
but not made available for delivery, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and make available for delivery the Debentures so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship described in Section 311(b) of the Trust Indenture
Act. A Trustee who has resigned or been removed shall be subject to Section
311(a) of the Trust Indenture Act to the extent included therein as though such
resignation or removal, as the case may be, had not occurred.
ARTICLE 8
Concerning the Debentures
SECTION 8.01. EVIDENCE OF ACTION BY DEBENTUREHOLDERS. Whenever in this
Indenture it is provided that the holders of a majority or specified percentage
in aggregate principal amount of the Debentures of a particular series may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the fact that at
the time of taking any such action the holders of such majority or specified
percentage of that series have joined therein may be evidenced by any instrument
or any number of instruments of similar tenor executed by such holders of
Debentures of that series in person or by agent or proxy appointed in writing.
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If the Company shall solicit from the Debentureholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of Outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
DEBENTURES. Subject to the provisions of Sections 7.01 and 7.02, proof of the
execution of any instrument by a Debentureholder (such proof will not require
notarization) or his agent or proxy and proof of the holding by any person of
any of the Debentures shall be sufficient if made in the following manner;
(a) The fact and date of the execution by any such person of any
instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture
Registrar thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. WHO MAY BE DEEMED OWNERS OF DEBENTURES. Prior to the due
presentment for registration of transfer of any Debenture, the Company, the
Trustee, any paying agent and any Debenture Registrar may deem and treat the
person in whose name such Debenture shall be registered in the Debenture
Register as the absolute owner of such Debenture (whether or not such Debenture
shall be overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Debenture Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to
Section 2.03) interest on such Debenture and for all other purposes; and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
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SECTION 8.04. DEBENTURES OWNED BY THE COMPANY OR CONTROLLED OR CONTROLLING
COMPANIES DISREGARDED FOR CERTAIN PURPOSES. In determining whether the holders
of the requisite aggregate principal amount of Debentures of a particular series
have concurred in any direction, consent or waiver under this Indenture,
Debentures of that series which are owned by the Company or any other obligor on
the Debentures of that series or by any Subsidiary of the Company or of such
other obligor on the Debentures of that series shall be disregarded and deemed
not to be Outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Debentures of such series which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Debentures so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right so to act with
respect to such Debentures and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
SECTION 8.05. INSTRUMENTS EXECUTED BY DEBENTUREHOLDERS BIND FUTURE
HOLDERS. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures of a
particular series specified in this Indenture in connection with such action,
any holder of a Debenture of that series which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Debenture.
Except as aforesaid any such action taken by the holder of any Debenture shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Debenture, and of any Debenture issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debenture. Any action
taken by the holders of the majority or percentage in aggregate principal amount
of the Debentures of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the
Trustee and the holders of all the Debentures of that series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURE MAY BE ENTERED
INTO WITHOUT CONSENT OF DEBENTUREHOLDERS. In addition to any supplemental
indenture otherwise authorized by this Indenture, the Company and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the
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provisions of the Trust Indenture Act as then in effect), without the consent
of the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation or other entity
to the Company, and the assumption by any such successor of the
obligations of the Company contained herein or otherwise established
with respect to the Debentures;
(b) to add further covenants, restrictions, conditions or provisions
for the protection of the holders of the Debentures of all or any
series as the Board of Directors and the Trustee shall consider to be
for the protection of the holders of Debentures of all or any series,
and to make the occurrence, or the occurrence and continuance, of a
default in any of such additional covenants, restrictions, conditions
or provisions a default or an Event of Default with respect to such
series permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit
the remedies available to the Trustee upon such default or may limit
the right of the holders of a majority in aggregate principal amount
of the Debentures of such series to waive such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or
in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture as shall
not be inconsistent with the provisions of this Indenture and shall
not materially adversely affect the interests of the holders of the
Debentures of any series;
(d) to add to, change or eliminate any of the provisions of this
Indenture, provided that any such addition, change or elimination
shall become effective only when there is no Debenture outstanding of
any series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision;
(e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only)
and to provide for exchangeability of such Debentures with the
Debentures issued hereunder in fully registered form and to make all
appropriate changes for such purposes;
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(f) to evidence and provide for the acceptance of appointment hereunder
by a successor trustee with respect to the Debentures;
(g) to qualify or maintain qualification of this Indenture under the
Trust Indenture Act;
(h) to establish the form or terms of Debentures of any series as
permitted by Section 2.01; or
(i) to make any addition, change or elimination of any provision of
this Indenture that does not adversely affect the rights of any
Debentureholder in any material respect.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the holders of
any of the Debentures at the time outstanding, notwithstanding any of the
provisions of Section 9.02.
SECTION 9.02. MODIFICATION OF INDENTURE WITH CONSENT OF DEBENTUREHOLDERS.
With the consent (evidenced as provided in Section 8.01) of the holders of not
less than a majority in aggregate principal amount of the Debentures of each
series affected by such supplemental indenture or indentures at the time
outstanding (and, in the case of any series of Debentures held as trust assets
of a Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities and the Common
Securities of such Trust as may be required under the Declaration of Trust of
such Trust), the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect) for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Debentures of such series under this
Indenture; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Debentures of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Debenture (and, in the case of any series of Debentures held as trust
assets of a Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the
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holders of the Preferred Securities and the Common Securities of such Trust
as may be required under the Declaration of Trust of such Trust) then
outstanding and affected thereby.
Upon the request of the Company, and upon the filing with the Trustee of
evidence of the consent of Debentureholders (and, in the case of any series
of Debentures held as trust assets of a Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders of
the Preferred Securities and the Common Securities of such Trust as may be
required under the Declaration of Trust of such Trust) required to consent
thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion but shall not
be obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of any
series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice,
setting forth in general terms the substance of such supplemental indenture,
to the Debentureholders of all series affected thereby as their names and
addresses appear upon the Debenture Register. Any failure of the Trustee to
mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, this Indenture shall, with respect to such series, be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Debentures of the
series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 9.04. DEBENTURES MAY BEAR NOTATION OF CHANGES BY SUPPLEMENTAL
INDENTURES. Debentures of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed or traded,
as to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Debentures of that series so modified as to conform,
in the opinion of the Board of Directors, to any modification of this
Indenture contained in any such
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supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Debentures of that series then
outstanding.
SECTION 9.05. OPINION OF COUNSEL. The Trustee, subject to the provisions
of Sections 7.01 and 7.02, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article 9.
ARTICLE 10
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 10.01. COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
other Person, and the Company shall not permit any other Person to consolidate
with or merge into the Company, unless:
(a) either the Company shall be the continuing corporation, or
the corporation (if other than the Company) formed by such
consolidation or into which the Company is merged or to which the
properties and assets of the Company substantially as an entity are
transferred or leased shall be a corporation, limited liability
company, partnership or trust organized and existing under the laws of
the United States of America or any state thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Debentures
and this Indenture; and
(b) immediately after giving effect to such transaction no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be
continuing.
SECTION 10.02. SUCCESSOR CORPORATION SUBSTITUTED. The successor
corporation formed by such consolidation or into which the Company is merged
or to which such transfer or lease is made shall succeed to and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein, and thereafter (except in the case of a lease to
another Person) the predecessor corporation shall be relieved of all
obligations and covenants under the Indenture and the Debentures and, in the
event of such conveyance or transfer, any such predecessor corporation may be
dissolved and liquidated.
SECTION 10.03. OPINION OF COUNSEL. The Trustee, subject to the provisions
of Sections 7.01 and 7.02, may receive an Opinion of Counsel as conclusive
evidence that any
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such consolidation, merger, sale, conveyance, transfer or other disposition,
and any such assumption, comply with the provisions of this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 11.01. SATISFACTION AND DISCHARGE OF INDENTURE. (A) If at any
time (a) the Company shall have paid or caused to be paid the principal of,
premium, if any, and interest on all the Debentures of any series Outstanding
hereunder (other than Debentures of such series which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.07) as
and when the same shall have become due and payable, or (b) the Company shall
have delivered to the Trustee for cancellation all Debentures of any series
theretofore authenticated (other than any Debentures of such series which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.07) or (c) (i) all the Debentures of any series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms will become due and payable within one year or
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and (ii) the Company
shall have irrevocably deposited or caused to be deposited with the Trustee as
trust funds the entire amount in cash (other than moneys repaid by the Trustee
or any paying agent to the Company in accordance with Section 11.04) or
Government Obligations, maturing as to principal and interest at such times and
in such amounts as will insure the availability of cash, or a combination
thereof, sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal of, premium, if any, and
interest on all Debentures of such series on each date that such principal or
interest is due and payable and (B) any mandatory sinking fund payments on the
dates on which such payments are due and payable in accordance with the terms of
the Indenture and the Debentures of such series; and if, in any such case, the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of further effect (except as
to (i) rights of registration of transfer and exchange of Debentures of such
series and the Company's right of optional redemption, if any, (ii) substitution
of mutilated, defaced, destroyed, lost or stolen Debentures, (iii) rights of
holders of Debentures to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Debentureholders to receive
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mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of the holders of
Debentures of such series as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them, and
(vi) the obligations of the Company under Section 4.02) and the Trustee, on
demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel and at the cost and expense of the Company, shall execute proper
instruments acknowledging such satisfaction of and discharging this
Indenture; provided, that the rights of the Debentureholders to receive
amounts in respect of principal of, premium, if any, and interest on the
Debentures held by them shall not be delayed longer than required by
then-applicable mandatory rules or policies of any securities exchange or
automated quotation system upon which the Debentures are listed or traded.
The Company agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Debentures of such series.
(B) The following provisions shall apply to the Debentures of each series
unless specifically otherwise provided in a Board Resolution or indenture
supplemental hereto provided pursuant to Section 2.01. In addition to discharge
of the Indenture pursuant to the next preceding paragraph, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the Debentures
of a series on the date of the deposit referred to in subparagraph (a) below,
and the provisions of this Indenture with respect to the Debentures of such
series shall no longer be in effect (except as to (i) rights of registration of
transfer and exchange of Debentures of such series and the Company's right of
optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Debentures, (iii) rights of holders of Debentures to receive
payments of principal thereof and interest thereon, upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the holders
of Debentures to receive mandatory sinking fund payments, if any, (iv) the
rights, obligations, duties and immunities of the Trustee hereunder, (v) the
rights of the Holders of Debentures as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them and (vi)
the obligations of the Company under Section 4.02) and the Trustee, at the
expense of the Company, shall at the Company's request, execute proper
instruments acknowledging the same, if
(a) with reference to this provision the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of the Debentures of
such series (i) cash in an amount, or (ii) Governmental Obligations
maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal of, or
premium, if any, and interest on all Debentures of such series on each
date that such principal or interest is due and payable and (B) any
mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture and
the Debentures of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Company is a party or by which it is bound;
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(c) the Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (y) since
the date hereof, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and such opinion
shall confirm that, the holders of the Debentures of such series will
not recognize income, gain or loss for Federal income tax purposes as
a result of such deposit, defeasance and discharge and will be subject
to Federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred;
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision
have been complied with; and
(e) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from
making payments of the principal of, premium, if any, or interest on
the Debentures of such series on the date of such deposit.
SECTION 11.02. APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
DEBENTURES. Subject to Section 11.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 11.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Company acting as its own paying agent), to the Holders of the particular
Debentures of such series for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from other
funds except to the extent required by law.
SECTION 11.03. REPAYMENT OF MONEYS HELD BY THE PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to
Debentures of any series, all moneys then held by any paying agent under the
provisions of this Indenture with respect to such series of Debentures shall,
upon demand of the Company, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 11.04. REPAYMENT OF MONEYS HELD BY THE TRUSTEE. Any moneys
deposited with or paid to the Trustee or any paying agent for the payment of the
principal of or interest on any Debenture of any series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by the
Trustee for such series or such paying agent, and a holder of the Debentures of
such series
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shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, thereafter look only to the
Company for any payment which such holder may be entitled to collect, and all
liability of the Trustee or any paying agent with respect to such moneys
shall thereupon cease; provided, however, that the Trustee or such paying
agent, before being required to make any such repayment with respect to
moneys deposited with it for any payment series, shall at the expense of the
Company, mail by first-class mail to holders of such Debentures at their
addresses as they shall appear on the Debenture Register, notice, that such
moneys remain and that, after a date specified therein, which shall not be
less than 30 days from the date of such mailing or publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 11.05. INDEMNIFICATION RELATING TO GOVERNMENTAL OBLIGATIONS. The
Company shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the Governmental Obligations deposited pursuant
to Section 11.01 or the principal or interest received in respect of such
obligations.
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
COMPANY EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Debenture, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, past, present or future as
such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debentures or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Debentures.
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ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 13.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR COMPANY
VALID. Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 13.03. SURRENDER OF POWERS OF THE COMPANY. The Company by
instrument in writing executed by authority of two-thirds of its Board of
Directors and delivered to the Trustee may surrender any of the powers reserved
to the Company and thereupon such power so surrendered shall terminate both as
to the Company and as to any successor corporation.
SECTION 13.04. REQUIRED NOTICES OR DEMANDS MAY BE SERVED BY MAIL. Except
as otherwise expressly provided herein, any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Debentures to or on the Company may be given or
served by being deposited first class postage prepaid in a post office letterbox
addressed (until another address is filed in writing by the Company with the
Trustee), as follows: Pogo Producing Company, 5 Greenway Plaza, Suite 2700,
Houston, Texas 77046, Attention: Corporate Secretary. Any notice, election,
request or demand by the Company or any Debentureholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the Corporate Trust Office of the Trustee.
SECTION 13.05. INDENTURE AND DEBENTURES TO BE CONSTRUED IN ACCORDANCE WITH
LAWS OF THE STATE OF NEW YORK. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State
(without regard to principles of conflicts of laws thereof).
SECTION 13.06. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE
FURNISHED UPON APPLICATION OR DEMANDS BY COMPANY; STATEMENTS TO BE INCLUDED IN
EACH CERTIFICATE OR OPINION WITH RESPECT TO COMPLIANCE WITH CONDITION OR
COVENANT.
(a) Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with,
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except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.07. PAYMENTS DUE ON SUNDAYS OR HOLIDAYS. Except as provided
pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an
Officers' Certificate, or established in one or more indentures supplemental to
the Indenture, in any case where the date of maturity of interest or principal
of any Debenture or the date of redemption of any Debenture shall not be a
Business Day, then payment of interest or principal (and premium, if any) may be
made on the next succeeding Business Day, with the same force and effect as if
made on the nominal date of maturity or redemption, and no interest shall accrue
for the period after such nominal date.
SECTION 13.08. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF 1939 TO
CONTROL. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. INDENTURE MAY BE EXECUTED BY ITS COUNTERPARTS. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
SECTION 13.10. SEPARABILITY OF INDENTURE PROVISIONS. In case any one or
more of the provisions contained in this Indenture or in the Debentures of any
series shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Indenture or of such Debentures, but this Indenture
and such Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 13.11. ASSIGNMENT BY COMPANY TO A SUBSIDIARY OR AFFILIATE. The
Company will have the right at all times to assign any of its rights or
obligations under this Indenture to a Subsidiary or an Affiliate of the Company;
provided that, in the event of any such assignment, the Company will remain
jointly and severally liable for all such obligations.
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Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties hereto (other
than pursuant to Article 10).
SECTION 13.12. HOLDERS OF PREFERRED SECURITIES AS THIRD PARTY
BENEFICIARIES OF THE INDENTURE; HOLDERS OF PREFERRED SECURITIES MAY INSTITUTE
LEGAL PROCEEDINGS AGAINST THE COMPANY IN CERTAIN CASES. The Company
acknowledges that, prior to a Security Exchange with respect to Debentures of
any series held as trust assets of a Trust, if the Property Trustee of such
Trust fails to enforce its rights under this Indenture as the holder of the
Debentures of a series held as trust assets of such Trust, any holder of the
Preferred Securities of such Trust may in accordance with the provisions of the
Declaration of Trust of such Trust, to the fullest extent permitted by law,
institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other Person; PROVIDED
that, if an Event of Default has occurred and is continuing and such event is
attributed to the failure of the Company to pay interest or principal on the
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Preferred
Securities of such Trust may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder (a "Holder Direct Action") on or after the respective
due date specified in the Debentures. In connection with such Holder Direct
Action, the Company shall be subrogated to the rights of such holder of
Preferred Securities to the extent of any payment made by the Company to such
holders of Preferred Securities in such Holder Direct Action. Except as
provided in the preceding sentences, the holders of Preferred Securities of such
Trust shall not be able to exercise directly any other remedy available to the
holders of the Debentures.
ARTICLE 14
SUBORDINATION OF DEBENTURES
SECTION 14.01. AGREEMENT TO SUBORDINATE. The Company covenants and agrees,
and each Debentureholder issued hereunder by his acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article 14; and each person holding any Debenture, whether
upon original issue or upon transfer, assignment or exchange thereof accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
all Senior Debt, whether outstanding at the date of this Indenture or thereafter
incurred.
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No provision of this Article 14 shall prevent the occurrence of any Default
or Event of Default hereunder.
SECTION 14.02. DEFAULT ON SENIOR DEBT. In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Debt, or in the event that the
maturity of any Senior Debt has been accelerated because of a default, then, in
either case, no payment shall be made by the Company with respect to the
principal (including redemption payments) of or premium, if any, or interest on
the Debentures until such default shall have been cured or waived in writing or
shall have ceased to exist or such Senior Debt shall have been discharged or
paid in full.
In the event of the acceleration of the maturity of the Debentures, then no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Debentures until
the holders of all Senior Debt outstanding at the time of such acceleration
shall receive payment in full of such Senior Debt (including any amounts due
upon acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Debentureholder when such payment is prohibited
by the preceding paragraphs of this Section 14.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear.
SECTION 14.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment by
the Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any liquidation,
dissolution, winding up, receivership, reorganization, assignment for the
benefit of creditors, marshaling of assets and liabilities or any bankruptcy,
insolvency or similar proceedings of the Company, all amounts due or to become
due upon all Senior Debt shall first be paid in full, in cash or cash
equivalents, or payment thereof provided for in accordance with its terms,
before any payment is made on account of the principal of, premium, if any, or
interest on the indebtedness evidenced by the Debentures, and upon any such
liquidation, dissolution, winding up, receivership, reorganization, assignment,
marshaling or proceeding, any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to which the
Debentureholders or the Trustee under this Indenture would be entitled, except
for the provisions of this Article 14, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Debentureholders or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Senior Debt (pro rata to such holders on the basis of the respective amounts
of Senior Debt held by such holders) or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Debt may have been issued, as their respective
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interests may appear, to the extent necessary to pay all Senior Debt in full
(including, without limitation, except to the extent, if any, prohibited by
mandatory provisions of law, post-petition interest, in any such proceedings),
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt, before any payment or distribution is made to the
holders of the indebtedness evidenced by the Debentures or to the Trustee under
this Indenture.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee under this Indenture or the holders of the Debentures before all Senior
Debt is paid in full or provision is made for such payment in accordance with
its terms, such payment or distribution shall be held in trust for the benefit
of and shall be paid over or delivered to the holders of such Senior Debt or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Senior Debt remaining unpaid until all such Senior Debt
shall have been paid in full in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Debt.
For purposes of this Article 14, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of arrangement, reorganization or readjustment, the payment of which
is subordinated (at least to the extent provided in this Article 14 with respect
to the Debentures) to the payment of all Senior Debt which may at the time be
outstanding; PROVIDED, that (i) the Senior Debt is assumed by the new
corporation, if any, resulting from any such arrangement, reorganization or
readjustment, and (ii) the rights of the holders of the Senior Debt are not,
without the consent of such holders, altered by such arrangement, reorganization
or readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article 10 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
Person shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions stated in Article 10. Nothing in Section 14.02 or
this Section 14.03 shall apply to claims of, or payments to, the Trustee under
or pursuant to Article 7, except as provided therein. This Section shall be
subject to the further provisions of Section 14.06.
SECTION 14.04. SUBROGATION OF DEBENTURES. Subject to the payment in full
of all Senior Debt, the rights of the holders of the Debentures shall be
subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Debt until the principal of, premium, if any, and interest on the
Debentures shall be paid in full; and, for the purposes of such
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subrogation, no payments or distributions to the holders of the Senior Debt
of any cash, property or securities to which the holders of the Debentures or
the Trustee on their behalf would be entitled except for the provisions of
this Article 14 and no payment over pursuant to the provisions of this
Article 14 to the holders of Senior Debt by holders of the Debentures or the
Trustee on their behalf shall, as between the Company, its creditors other
than holders of Senior Debt and the holders of the Debentures, be deemed to
be a payment by the Company to or on account of the Senior Debt; and no
payments or distributions of cash, property or securities to or for the
benefit of the Debentureholders pursuant to the subrogation provisions of
this Article, which would otherwise have been paid to the holders of Senior
Debt shall be deemed to be a payment by the Company to or for the account of
the Debentures. It is understood that the provisions of this Article 14 are
and are intended solely for the purpose of defining the relative rights of
the holders of the Debentures, on the one hand, and the holders of the Senior
Debt, on the other hand.
Nothing contained in this Article 14 or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of, premium, if any, and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior Debt, nor shall anything herein or therein prevent the
holder of any Debenture or the Trustee on his behalf from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 14 of the holders
of Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article 14, the Trustee, subject to the provisions of Article 7, and the
holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such liquidation,
dissolution, winding up, receivership, reorganization, assignment or marshaling
proceedings are pending, or a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the holders of the Debentures, for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 14.
SECTION 14.05. AUTHORIZATION BY DEBENTUREHOLDERS. Each holder of a
Debenture by his acceptance thereof authorizes and directs the Trustee in his
behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article 14 and appoints the Trustee his
attorney-in-fact for any and all such purposes.
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SECTION 14.06. NOTICE TO TRUSTEE. The Company shall give prompt written
notice to the Trustee and to any paying agent of any fact known to the
Company which would prohibit the making of any payment of moneys to or by the
Trustee or any paying agent in respect of the Debentures pursuant to the
provisions of this Article 14. Regardless of anything to the contrary
contained in this Article 14 or elsewhere in this Indenture, the Trustee
shall not be charged with knowledge of the existence of any Senior Debt or of
any default or event of default with respect to any Senior Debt or of any
other facts which would prohibit the making of any payment of moneys to or by
the Trustee, unless and until the Trustee shall have received notice in
writing at its principal Corporate Trust Office to that effect signed by an
officer of the Company, or by a holder or agent of a holder of Senior Debt
who shall have been certified by the Company or otherwise established to the
reasonable satisfaction of the Trustee to be such holder or agent, or by the
trustee under any indenture pursuant to which Senior Debt shall be
outstanding, and, prior to the receipt of any such written notice, the
Trustee shall, subject to the provisions of Article 7, be entitled to assume
that no such facts exist; PROVIDED, HOWEVER, that if on a date at least three
Business Days prior to the date upon which by the terms hereof any such
moneys shall become payable for any purpose (including, without limitation,
the payment of the principal of, or interest on any Debenture) the Trustee
shall not have received with respect to such moneys the notice provided for
in this Section 14.06, then, regardless of anything herein to the contrary,
the Trustee shall have full power and authority to receive such moneys and to
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or
after such prior date.
The Trustee shall be entitled to conclusively rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior Debt
(or a trustee on behalf of such holder) to establish that such notice has been
given by a holder of Senior Debt or a trustee on behalf of any such holder. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article 14, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article 14, and if such evidence is not furnished the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 14.07. TRUSTEE'S RELATION TO SENIOR DEBT. The Trustee and any
agent of the Company or the Trustee shall be entitled to all the rights set
forth in this Article 14 with respect to any Senior Debt which may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Debt and nothing in this Indenture shall deprive the
Trustee or any such agent, of any of its rights as such holder. Nothing in this
Article 14 shall apply to claims of, or payments to, the Trustee under or
pursuant to Article 7.
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With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 14, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and, subject to the provisions of
Article 7, the Trustee shall not be liable to any holder of Senior Debt if it
shall pay over or deliver to holders of Debentures, the Company or any other
person moneys or assets to which any holder of Senior Debt shall be entitled by
virtue of this Article 14 or otherwise.
SECTION 14.08. NO IMPAIRMENT TO SUBORDINATION. No right of any present or
future holder of any Senior Debt to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Debentureholders, without incurring
responsibility to the Debentureholders and without impairing or releasing the
subordination provided in this Article 14 or the obligations hereunder of the
holders of the Debentures to the holders of such Senior Debt, do any one or more
of the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Senior Debt, or otherwise amend or
supplement in any manner such Senior Debt or any instrument evidencing the same
or any agreement under which such Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Debt; (iii) release any Person liable in any
manner for the collection of such Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company, as the case may be, and any other
Person.
SECTION 14.09. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time
any paying agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article 14
shall in such case (unless the context otherwise requires) be construed as
extending to and including such paying agent within its meaning as fully for all
intents and purposes as if such paying agent were named in this Article 14 in
addition to or in place of the Trustee.
SECTION 14.10. TRUST MONEYS NOT SUBORDINATED. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Section 11.02 of this Indenture by
the Trustee for the payment of principal of and interest on the Debentures
shall not be subordinated to the prior payment of any Senior Debt or subject
to the restrictions set forth in this Article 14, and none of the
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Debentureholders shall be obligated to pay over any such amount to the
Company or any holder of Senior Debt or any other creditor of the Company.
Wilmington Trust Company, as Trustee, hereby accepts the trust in this
Indenture declared and provided, upon the terms and conditions herein above
set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
POGO PRODUCING COMPANY
By
------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By
------------------------------
Name:
Title:
<PAGE>
- --------------------------------------------------------------------------------
POGO PRODUCING COMPANY
AND
WILMINGTON TRUST COMPANY,
as Trustee
------------------
SUPPLEMENTAL INDENTURE NO. 1
Dated as of June 1, 1999
TO
JUNIOR SUBORDINATED INDENTURE
Dated as of June 1, 1999
-------------------
6 1/2% Junior Subordinated Convertible Debentures, Series A due 2029
$154,640,000
- --------------------------------------------------------------------------------
<PAGE>
SUPPLEMENTAL INDENTURE NO. 1, dated as of the first day of June, 1999,
between Pogo Producing Company, a corporation duly organized and existing under
the laws of the State of Delaware (the "Company"), and Wilmington Trust Company,
a Delaware banking corporation, as trustee (the "Trustee").
RECITALS
The Company has heretofore executed and delivered to the Trustee a
Junior Subordinated Indenture, dated as of June 1, 1999 (the "Indenture"),
providing for the issuance from time to time of one or more series of its
unsecured junior subordinated debentures (the "Debentures").
Pursuant to the terms of the Indenture, the Company desires to provide
for the establishment of a new series of Debentures to be designated as the
6 1/2% Junior Subordinated Convertible Debentures, Series A due 2029 (the
"Series A Debentures"), the form and substance of such Series A Debentures and
the terms, provisions and conditions thereof to be as set forth or provided in
the Indenture and this Supplemental Indenture No. 1.
The Company has caused Pogo Trust I ("Pogo Trust I") to be created as
a statutory business trust under the Business Trust Act of the State of Delaware
(12 DEL. CODE Section 3801 ET SEQ.) pursuant to a Declaration of Trust, dated
as of March 17, 1999 (the "Original Declaration"), and the filing of a
Certificate of Trust with the Secretary of State of the State of Delaware on
March 18, 1999.
The Original Declaration is to be amended and restated in its entirety
pursuant to an Amended and Restated Declaration of Trust dated as of June 2,
1999 (such Amended and Restated Declaration of Trust, as amended from time to
time, the "Declaration of Trust").
Pogo Trust I desires to issue $150,000,000 aggregate liquidation
amount of its 6 1/2% Cumulative Quarterly Income Convertible Preferred
Securities, Series A (the "Preferred Securities") and sell such Preferred
Securities to the underwriters set forth in that certain Underwriting Agreement
dated May 26, 1999 (the "Underwriting Agreement") by and among the Company, Pogo
Trust I and the underwriters named therein.
In connection with such purchases of Preferred Securities and the
related purchases by the Company of the Common Securities (as defined in the
Declaration of Trust) of Pogo Trust I, Pogo Trust I will purchase and hold as
trust assets up to $154,640,000 aggregate principal amount of the Series A
Debentures.
Pursuant to the Declaration of Trust, the legal title to the Series A
Debentures shall be owned and held of record in the name of Wilmington Trust
Company or its successor under the Declaration of Trust, as Property Trustee
(the "Property Trustee"), in trust for the benefit of holders of the Preferred
Securities and the Common Securities.
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Upon written direction of the Company or any subsequent holder of the
Common Securities, the Regular Trustees (as defined in the Declaration of Trust)
of Pogo Trust I shall, unless the Series A Debentures are redeemed as described
herein, dissolve Pogo Trust I and cause to be distributed to the holders of the
Preferred Securities and the Common Securities, on a Pro Rata basis (as defined,
and determined as provided, in the terms of the Preferred Securities and Common
Securities attached as Exhibits B and C to the Declaration of Trust), Series A
Debentures and, in connection with a Liquidation Distribution (as defined in the
Declaration of Trust), the Regular Trustees may cause to be distributed to
holders of Preferred Securities and Common Securities, on a Pro Rata basis,
Series A Debentures (each a "Dissolution Event").
Section 2.01 of the Indenture provides that various matters with
respect to any series of Debentures issued under the Indenture may be
established in an indenture supplemental to the Indenture.
Subparagraph (h) of Section 9.01 of the Indenture provides that the
Company and the Trustee may enter into an indenture supplemental to the
Indenture to establish the form or terms of Debentures of any series as
permitted by Section 2.01 of the Indenture.
For and in consideration of the premises and the issuance of the
Series A Debentures provided for herein, it is mutually covenanted and agreed,
for the equal and proportionate benefit of the holders of the Series A
Debentures, as follows:
ARTICLE ONE
Relation to Indenture; Additional Definitions
SECTION 1.01. Relation to Indenture. This Supplemental Indenture No.
1 constitutes an integral part of the Indenture.
SECTION 1.02. Additional Definitions. For all purposes of this
Supplemental Indenture No. 1:
(1) Capitalized terms used herein shall have the meanings specified
herein or in the Indenture, as the case may be;
(2) "Additional Interest" has the meaning set forth in Section
2.05(d) hereof;
(3) "Applicable Price" means (i) in the case of a Non-Stock
Fundamental Change in which the holders of the Common Stock received only
cash, the amount of cash received by the holder of one share of 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 for
the Common Stock during the ten trading days prior to and
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including the record date for the determination of the holders of Common
Stock entitled to receive such securities, cash, or other property in
connection with such Non-Stock Fundamental Change or Common Stock
Fundamental Change or, if there is no such record date, the date upon which
the holders of the Common Stock shall have the right to receive such
securities, cash, or other property, in each case as adjusted in good faith
by the Company to appropriately reflect any of the events referred to in
Section 5.03;
(4) "Change in Investment Company Act Law" has the meaning set forth
in the definition of Investment Company Event;
(5) "Closing Price" means for any day, the average of the highest and
lowest reported sale prices, regular way, of Common Stock on such day,
or, if no sales take 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 NYSE Consolidated Transactions Tape, or, if the Common
Stock is not listed or admitted to trading on the NYSE, on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading, if the Common Stock is listed on a national
securities exchange, or the Nasdaq National Market, or, if the Common
Stock is not quoted or admitted to trading on such quotation system, on
the principal quotation system on which the 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 highest and lowest bid and asked prices of the Common
Stock in the over-the-counter market on such day 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 NYSE member firm selected from time to time by the Board of
Directors of the Company for that purpose or, if not so available in such
manner, as otherwise determined in good faith by the Board of Directors
of the Company;
(6) "Common Securities" has the meaning set forth in the Recitals
herein;
(7) "Common Stock" means the common stock, par value $1.00 per share,
of the Company including associated preferred share purchase rights;
(8) "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 Common Stock
consisted of common stock that for each of the ten consecutive trading days
prior to the record date for the determination of the holders of Common
Stock entitled to receive such common stock or, if there is no such record
date, the date on which the holders of the Common Stock shall have the
right to receive such Common Stock, has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the Nasdaq National Market; provided, however, that a
Fundamental Change shall not be a
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Common Stock Fundamental Change unless either (i) the Company continues to
exist after the occurrence of such Fundamental Change and the outstanding
Preferred Securities continue to exist as outstanding Preferred Securities
or (ii) not later than the occurrence of such Fundamental Change, the
outstanding Series A Debentures are converted into or exchanged for
debentures of a corporation succeeding to the business of the Company,
which debentures shall have terms substantially similar to those of the
Series A Debentures;
(9) "Compounded Interest" has the meaning set forth in Section
2.05(a) hereof;
(10) "Conversion Agent" has the meaning set forth in Section 5.02(a)
hereof;
(11) "Conversion Date" has the meaning set forth in Section 5.02(a)
hereof;
(12) "Conversion Expiration Date" means the earlier of (i) the close
of business on May 31, 2029, or (ii) in the case of Series A Debentures
called for redemption, the close of business on the Business Day prior to
the redemption date;
(13) "Conversion Price" has the meaning specified in Section 5.01
hereof;
(14) "Debentures" has the meaning set forth in the Recitals herein;
(15) "Declaration of Trust" has the meaning set forth in the Recitals
herein;
(16) "Dissolution Event" has the meaning set forth in the Recitals
herein;
(17) "Expiration Time" has the meaning set forth in Section 5.03(e)
hereof;
(18) "Extended Interest Payment Period" has the meaning set forth in
Section 4.01(a) hereof;
(19) "Fractional Share Cash Payment Amount" has the meaning specified
in Section 5.02(e) hereof;
(20) "Fundamental Change" means the occurrence of any Transaction or
event in connection with a plan pursuant to which all or substantially all
of the Common Stock shall 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), PROVIDED, that, in the case of a plan involving more than one
such Transaction or event, for purposes of adjustment of the Conversion
Price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock shall be exchanged for, converted
into, or acquired for or constitute solely
4
<PAGE>
the right to receive securities, cash, or other property, but the
adjustment shall be based upon the consideration that a holder of Common
Stock received in such Transaction or event as a result of which more than
50% of the Common Stock shall have been exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash, or
other property;
(21) "Guarantee Payments" has the meaning set forth in Section 6.01
hereof;
(22) "Indenture" has the meaning set forth in the Recitals herein;
(23) "Interest Payment Date" has the meaning set forth in Section
2.05(a) hereof;
(24) "Investment Company Act" means the Investment Company Act of
1940, as amended;
(25) "Investment Company Event" means that the Company and the
Regular Trustees shall have received an opinion of independent nationally
recognized counsel, who may be counsel for Pogo Trust I, the Trustee or
the Company, but who may not be an employee of the Company, Pogo Trust I
or the Trustee, and who shall be reasonably acceptable to the Trustee,
experienced in practice under the Investment Company Act that as a result
of the occurrence of a 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 (a "Change in
Investment Company Act Law"), there is more than an insubstantial risk
that Pogo Trust I is or will be considered an "investment company" which
is required to be registered under the Investment Company Act, which
Change in Investment Company Act Law becomes effective on or after May
26, 1999;
(26) "Liquidation Distribution" has the meaning set forth in the
Recitals herein;
(27) "Maturity Date" has the meaning set forth in Section 2.03 hereof;
(28) "Non Book-Entry Preferred Securities" has the meaning set forth
in Section 2.04(b)(ii) hereof;
(29) "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change;
(30) "Notice of Conversion" means (i) the notice given by a holder of
Series A Debentures to the Conversion Agent directing the Conversion Agent
to exchange Series A Debentures of such holder into Common Stock on behalf
of such holder, or (ii) the notice given by a holder of Preferred
Securities to the Conversion Agent directing the Conversion Agent to
exchange Preferred Securities of such holder for Series A
5
<PAGE>
Debentures and to convert such Series A Debentures into Common Stock on
behalf of such holder, any such notice including the information specified
by Section 5.02 hereof;
(31) "NYSE" means the New York Stock Exchange, Inc.;
(32) "Optional Redemption Price" has the meaning set forth in Section
3.01(a) hereof;
(33) "Original Declaration" has the meaning set forth in the Recitals
herein;
(34) "Pogo Trust I" has the meaning set forth in the Recitals herein;
(35) "Preferred Securities" has the meaning set forth in the Recitals
herein;
(36) "Preferred Securities Guarantee" means the Guarantee Agreement,
dated as of June 2, 1999, between the Company and Wilmington Trust Company
as the initial Guarantee Trustee thereunder, in respect of the Preferred
Securities;
(37) "Property Account" has the meaning set forth in Section 2.04(a)
hereof;
(38) "Property Trustee" has the meaning set forth in the Recitals
herein;
(39) "Purchased Shares" has the meaning set forth in Section 5.03(e)
hereof;
(40) "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive
trading days prior to and including the record date for the determination
of the holders of Common Stock entitled to receive such common stock or, if
there is no such record date, the date on which the holders of Common Stock
shall have the right to receive such common stock, as adjusted in good
faith by the Company to appropriately reflect any of the events referred to
in Section 5.03;
(41) "Regular Trustees" has the meaning set forth in the Recitals
herein;
(42) "Reference Market Price" initially means $12.67 (which is an
amount equal to 66 2/3% of the reported last sales price for the Common
Stock on the NYSE Consolidated Transactions Tape on May 26, 1999), and in
the event of any adjustment of the Conversion Price other than as a result
of a Non-Stock Fundamental Change, the Reference Market Price shall also be
adjusted so that the ratio of the Reference Market Price to the Conversion
Price after giving effect to any such adjustment shall always be the same
as the ratio of the initial Reference Market Price to the initial
Conversion Price of the Debentures;
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<PAGE>
(43) "Rights" has the meaning specified in Section 5.02(h) hereof;
(44) "Series A Debentures" has the meaning set forth in the Recitals
herein and Section 2.01 hereof;
(45) "Special Event" means either a Tax Event or an Investment Company
Event;
(46) "Tax Event" means that the Company and the Regular Trustees
shall have received an opinion of counsel from independent nationally
recognized tax counsel experienced in such matters and who shall be
reasonably acceptable to the Trustee, to the effect that on or after May
26, 1999 as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation or 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
theretofore commonly accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each
case on or after May 26, 1999, there is more than a remote risk that (i)
Pogo Trust I is, or will be within 90 days of the date thereof, subject
to federal income tax with respect to income accrued or received on the
Series A Debentures, (ii) Pogo Trust I is, or will be within 90 days of
the date thereof, subject to more than a DE MINIMIS amount of taxes,
duties or other governmental charges or (iii) interest payable by the
Company to Pogo Trust I on the Series A Debentures is not, or within 90
days of the date thereof will not be, deductible by the Company for
United States federal income tax purposes;
(47) "Tax Redemption Price" means with respect to each $50 principal
amount of Series A Debentures (i) if the Series A Debentures are redeemed
as a result of the occurrence of a Tax Event prior to June 1, 2002, the
greater of (a) the total principal amount of such Series A Debenture or
the liquidation amount of the Preferred Securities, (b) the average of the
highest and lowest reported sale prices, regular way, of the Preferred
Securities over the five trading days immediately prior to the day on
which notice of such redemption is given, and (c) the average of the
highest and lowest reported sale prices, regular way, of Preferred
Securities on the trading day immediately prior to the day on which
notice of such redemption is given
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or (ii) if the Series A Debentures are redeemed as a result of the
occurrence of a Tax Event on or after June 1, 2002, the principal amount
of such Series A Debentures. For purposes of clauses (b) and (c) above,
if the Series A Debentures have been distributed in exchange for
Preferred Securites, the references to sales prices shall be deemed to
refer to the sale prices of the Series A Debentures.
(48) "Transaction" has the meaning set forth in Section 5.04(a)
hereof;
(49) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 1; and
(50) The terms "herein," "hereof," "hereunder" and other words of
similar import refer to this Supplemental Indenture No. 1.
ARTICLE TWO
General Terms and Conditions of the Series A Debentures
SECTION 2.01. Title of Debentures. There shall be and is hereby
authorized a series of Debentures designated as the "6 1/2% Junior Subordinated
Convertible Debentures Series A due 2029" (the "Series A Debentures").
SECTION 2.02. Limitation on Aggregate Principal Amount. The
aggregate principal amount of the Series A Debentures shall be limited to
$154,640,000; PROVIDED, HOWEVER, that the authorized aggregate principal amount
of the Series A Debentures may be increased above such amount by a Board
Resolution to such effect. Each Series A Debenture shall be dated the date of
its authentication.
SECTION 2.03. Maturity Date. (a) The Series A Debentures shall
mature and the principal amount thereof shall be due and payable together
with all accrued and unpaid interest thereon, including Additional Interest
and Compounded Interest, if any, on June 1, 2029 (the "Maturity Date");
PROVIDED, if a Tax Event occurs, then the Company will have the right (a)
prior to the dissolution of Pogo Trust I, to shorten the Maturity Date of the
Series A Debentures, to the minimum extent required, but not earlier than
June 2, 2014, or (b) to direct the Property Trustee to dissolve Pogo Trust I
(if not previously dissolved) and shorten the Maturity Date of the Series A
Debentures, to the minimum extent required, but not earlier than June 2,
2014, in each case such that in the opinion of an independent nationally
recognized counsel to the Company, experienced in such matters, after
shortening the Maturity Date, interest paid on the Series A Debentures will
be deductible for federal income tax purposes.
(b) Whenever the Maturity Date is shortened in accordance with this
Section 2.03, a notice stating the Maturity Date has been adjusted and
setting forth the adjusted Maturity Date shall as soon as practicable be
mailed by the Company to all record holders of the Series A Debentures at
their last addresses as they appear on the Debenture Register.
SECTION 2.04. Place of Payment, Registration or Exchange.
(a) Except as provided in Section 2.04(b), the Series A Debentures
shall be issued in fully registered certificated form without interest coupons
in denominations of $50 or
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integral multiples thereof. Principal and interest on the Series A Debentures
issued in certificated form will be payable, the transfer of such Series A
Debentures will be registrable and such Series A Debentures will be exchangeable
for Series A Debentures bearing identical terms and provisions at the Corporate
Trust Office of the Trustee; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered holders at
such addresses as shall appear in the Debenture Register and that the payment of
principal with respect to the Series A Debentures will only be made upon
surrender of the Series A Debentures to the Trustee. Notwithstanding the
foregoing, so long as the Property Trustee is the legal owner and record holder
of the Series A Debentures, the payment of the principal of and interest
(including Additional Interest and Compounded Interest, if any) on the Series A
Debentures held by the Property Trustee will be made by the Company in
immediately available funds on the payment date therefor at such place and to
the Property Account (as defined in the Declaration of Trust) established and
maintained by the Property Trustee pursuant to the Declaration of Trust.
(b) In connection with a Dissolution Event:
(i) Series A Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for one or more
Global Debentures representing the Series A Debentures in an
aggregate principal amount equal to all outstanding Series A
Debentures, to be registered in the name of the Depositary, or
its nominee, and delivered by the Trustee to the Depositary for
crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees. The Company upon any such
presentation shall execute one or more Global Debentures
representing the Series A Debentures in such aggregate principal
amount and deliver the same to the Trustee for authentication and
delivery in accordance with the Indenture and this Supplemental
Indenture No. 1. Payments on the Series A Debentures issued as a
Global Debenture will be made to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, any Definitive Preferred Security Certificate
(as defined in the Declaration of Trust) which represents
Preferred Securities other than Preferred Securities held by the
Clearing Agency (as defined in the Declaration of Trust) or its
nominee ("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in Series A Debentures presented
to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the
Non Book-Entry Preferred Securities until such Definitive
Preferred Security Certificate is presented to the Debenture
Registrar for transfer or reissuance at which time such Preferred
Security Certificate will be canceled and a Series A Debenture,
registered in the name of the holder of the Preferred Security
Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with
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an aggregate principal amount equal to the aggregate
liquidation amount of the Definitive 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 Supplemental
Indenture No. 1. Upon issuance of such Series A Debentures,
Series A Debentures with an equivalent aggregate amount that
were presented by the Property Trustee to the Trustee will
be deemed to have been canceled.
SECTION 2.05. Interest and Interest Rates.
(a) Each Series A Debenture will bear interest at the rate of 6 1/2%
per annum from June 2, 1999 until the principal thereof becomes due and payable,
and on any overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum (6 1/2%), compounded quarterly ("Compounded Interest"),
payable (subject to the provisions of Article Four) quarterly in arrears on
March 1, June 1, September 1 and December 1 of each year (each an "Interest
Payment Date"), commencing on September 1, 1999, to the person in whose name
such Series A Debenture or any predecessor Series A Debenture is registered, at
the close of business on the regular record date for such interest installment,
which, except as set forth below, shall be, in respect of any Series A
Debentures of which the Property Trustee is the registered holder or a Global
Debenture, the close of business on the Business Day next preceding that
Interest Payment Date. Notwithstanding the foregoing sentence, if the Preferred
Securities are no longer in book-entry only form or if pursuant to the
provisions of Section 2.11(c) of the Indenture the Series A Debentures are not
represented by a Global Debenture, the regular record date for such interest
installment shall be the fifteenth day of the month preceding the month in which
that Interest Payment Date occurs.
(b) Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered holders on
such regular record date, and shall instead be paid to the person in whose name
the Series A Debenture (or one or more Predecessor Debentures) is registered at
the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered holders of the Series A Debentures not less than 10 days prior to
such special record date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange or quotation
system on which the Series A Debentures may be listed or traded, and upon such
notice as may be required by such exchange or quotation system, all as more
fully provided in Section 2.03 of the Indenture.
(c) The amount of interest payable for any full quarterly interest
period will be computed on the basis of a 360-day year of twelve 30-day months,
and for any period shorter than a full quarterly interest period for which
interest is computed, interest shall be computed on the basis of the actual
number of days elapsed per 90-day quarter. In the event that any date on which
interest is payable on the Series A Debentures is not a Business Day, then
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payment of interest payable on such date shall be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable.
(d) If at any time Pogo Trust I shall be required to pay any taxes,
duties, assessments or governmental charges of any nature (other than
withholding taxes) imposed by the Internal Revenue Service or any other taxing
authority, then, in any such case, the Company shall pay as additional interest
("Additional Interest") on the Series A Debentures such additional amounts as
shall be required so that the net amounts received and retained by Pogo Trust I
after paying any such taxes, duties, assessments or other governmental charges
shall be equal to the amounts Pogo Trust I would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
SECTION 2.06. Denomination of Debentures. The Series A Debentures
shall be in registered form without coupons and shall be issuable in
denominations of $50 and integral multiples thereof.
SECTION 2.07. Currency. Payment of principal and interest on the
Series A Debentures shall be payable in U.S. dollars.
SECTION 2.08. Paying Agent. The Trustee shall initially serve as
paying agent of the Series A Debentures.
SECTION 2.09. Sinking Fund Obligations. The Company has no
obligation to redeem or purchase any Series A Debentures pursuant to any sinking
fund or analogous provisions (including payments made in cash in anticipation of
future sinking fund obligations) or at the option of a holder thereof.
SECTION 2.10. Additional Events of Default.
(a) The Events of Default specified in Section 6.01(a) of the
Indenture shall constitute Events of Default with respect to the Series A
Debentures, except as modified below.
(b) The Company's failure to pay interest on the Series A Debentures
for 30 days, subject to Company's right to extend the interest payment period of
the Series A Debentures provided in Article IV hereof, shall constitute an Event
of Default under the Indenture.
(c) The Company's failure to deliver Shares of Common Stock in
accordance with the provisions of Article V hereof upon appropriate election by
a holder of Series A Debentures to convert such Series A Debentures into Common
Stock shall constitute an Event of Default under the Indenture.
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SECTION 2.11. Defeasance. Section 11.01(B) of the Indenture shall
not apply to the Series A Debentures.
ARTICLE THREE
Optional Redemption of the Series A Debentures
SECTION 3.01. Optional Redemption on or after June 1, 2002.
(a) Except as provided in Section 3.02 hereof and subject to the
provisions below, Series A Debentures shall not be redeemed by the Company prior
to June 1, 2002. Subject to the terms of Article 3 of the Indenture, the
Company shall have the right to redeem the Series A Debentures, in whole or in
part, at any time from time to time on or after June 1, 2002, upon not less than
30 nor more than 60 days' notice to each holder of the Series A Debentures,
during the twelve-month periods commencing June 1 in each of the following years
at the indicated redemption price (expressed as a percentage of the principal
amount of the Series A Debentures being redeemed), together with any accrued and
unpaid interest thereon, including Compounded Interest and Additional Interest,
if any, to, but excluding, the date of such redemption (the "Optional Redemption
Price"):
<TABLE>
<CAPTION>
Redemption Price Redemption Price
---------------- ----------------
(% of (% of
principal principal
Year amount) Year amount)
---- ------ ---- ------
<S> <C> <C> <C>
2002 . . . . . . 104.55% 2006 . . . . . . . . 101.95%
2003 . . . . . . 103.90% 2007 . . . . . . . . 101.30%
2004 . . . . . . 103.25% 2008 . . . . . . . . 100.65%
2005 . . . . . . 102.60% 2009 and thereafter . 100%
</TABLE>
(b) If the Series A Debentures are redeemed on any Interest Payment
Date, accrued and unpaid interest shall be payable to holders of record on the
relevant record date.
(c) If the Series A Debentures are redeemed after a record date and
on or before the related Interest Payment Date, accrued and unpaid interest
shall be payable to holders of record on the relevant record date.
(d) The Company shall not redeem any Series A Debentures unless all
accrued and unpaid interest thereon, including Compounded Interest and
Additional Interest, if any, has been paid in full for all quarterly interest
periods terminating prior to and including the redemption date.
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<PAGE>
(e) If the Company gives a notice of redemption in respect of
Series A Debentures (which notice will be irrevocable), then by 12:00 noon, New
York City time, on the redemption date, the Company shall deposit irrevocably
with the Trustee funds sufficient to pay the applicable Optional Redemption
Price and shall give irrevocable instructions and authority to pay such Optional
Redemption Price to the holders of the Series A Debentures. If notice of
redemption shall have been given and funds deposited as required, then
immediately prior to the close of business on the redemption date interest shall
cease to accrue on the Series A Debentures called for redemption, such Series A
Debentures shall no longer be deemed to be outstanding and all rights of holders
of such Series A Debentures so called for redemption shall cease, except the
right of the holders of such Series A Debentures to receive the Optional
Redemption Price but without interest on such Optional Redemption Price.
(f) If any date fixed for redemption of any Series A Debentures is
not a Business Day, then payment of the Optional Redemption Price payable on
such date shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day falls in the next calender year, such payment will be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If the Company fails to
repay the Series A Debentures on maturity or the date fixed for redemption or if
payment of the Optional Redemption Price in respect of the Series A Debentures
is improperly withheld or refused and not paid by the Company, interest on such
Series A Debentures shall continue to accrue from the original redemption date
to the date of payment, in which case the actual payment date shall be
considered the date fixed for redemption for purposes of calculating the
Optional Redemption Price.
(g) In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange any Series A
Debentures during a period beginning at the opening of business 15 days before
the mailing of a notice of redemption of Series A Debentures and ending at the
close of business on the date of such mailing and (ii) register the transfer of
or exchange any Series A Debentures so selected for redemption, in whole or in
part, except the unredeemed portion of any Series A Debentures being redeemed in
part.
SECTION 3.02. Optional Redemption upon the Occurrence of a Tax Event.
If a Tax Event shall occur and be continuing, the Company shall have
the right within 90 days following the occurrence of such Tax Event to redeem
the Series A Debentures in whole, but not in part, for cash at the Tax
Redemption Price, together with any accrued and unpaid interest thereon,
including Compounded Interest and Additional Interest, if any, to, but
excluding, the date of such redemption.
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<PAGE>
SECTION 3.03. Partial Redemption. If the Series A Debentures are
only partially redeemed pursuant to this Article Three, the Series A Debentures
will be redeemed pro rata or by lot or by any other method utilized by the
Trustee. Notwithstanding the foregoing, if a partial redemption of the Series A
Debentures would result in the delisting of the Preferred Securities by any
national securities exchange or other organization on which the Preferred
Securities are then listed or traded, the Company shall not be permitted to
effect such partial redemption and will only redeem the Series A Debentures in
whole.
SECTION 3.04. Corresponding Redemption of Preferred Securities. So
long as the Preferred Securities are outstanding, the proceeds from the
redemption of the Series A Debentures will be used by Pogo Trust I to redeem
Preferred Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Series A Debentures so redeemed.
SECTION 3.05. Exchange of Preferred Securities for Series A
Debentures.
(a) At any time, the Company shall have the right to dissolve the
Trust and cause the Series A Debentures to be distributed to the holders of
the Preferred Securities in liquidation of Pogo Trust I after satisfaction of
liabilities to creditors of Pogo Trust I as provided by applicable law.
(b) If a Special Event in respect of Pogo Trust I shall occur, the
Company shall give the Property Trustee notice of the same. If a Special
Event in respect of Pogo Trust I shall occur and be continuing, the
Declaration of Trust requires the Property Trustee to direct the Conversion
Agent (as defined in the Declaration of Trust) to exchange all outstanding
Preferred Securities for the Series A Debentures having a principal amount
equal to the aggregate liquidation amount of the Preferred Securities to be
exchanged with accrued interest in an amount equal to any unpaid
distributions (including any Additional Interest) on the Preferred
Securities; PROVIDED, THAT, in the case of a Tax Event, the Company shall
have the right to direct the Property Trustee that less than all, or none of
the Preferred Securities be so exchanged (i) if and for so long as the
Company shall have elected to pay any Additional Interest such that the net
amounts received by holders of the Preferred Securities not so exchanged in
respect of distributions are not reduced as a result of such Tax Event, and
shall not have revoked any such election or failed to make such payments or
(ii) if the Company shall instead elect to redeem the Series A Debentures, in
whole or in part, in the manner set forth in Section 3.02.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Option to Extend Interest Payment Period.
(a) So long as no Event of Default has occurred and is continuing,
the Company shall have the right to defer payments of interest on the Series A
Debentures by extending the interest payment period of the Series A Debentures
at any time from time to time for up to 20 consecutive quarterly interest
periods (each such period an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest accrued at the interest rate
specified in Section 2.05(a) herein compounded quarterly and unpaid thereon
(together with Compounded Interest and Additional Interest, if any); PROVIDED
THAT no Extended Interest Payment Period may extend beyond the Maturity Date or
redemption date of the Series A Debentures.
(b) During any Extended Interest Payment Period, the Company shall
not (i) declare or pay any dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any of its capital stock,
other than:
(A) dividends or distributions in shares of, or options,
warrants, rights to subscribe for or purchase shares of, the
Common Stock;
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<PAGE>
(B) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant
thereto;
(C) as a result of a reclassification of the Company's capital
stock or the exchange or the conversion of one class or
series of the Company's capital stock for another class or
series of the Company's capital stock;
(D) the payment of accrued dividends and 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; or
(E) purchases of Common Stock related to the issuance of Common
Stock or rights under any of the Company's benefit plans for
its directors, officers, employees, any of the Company's
dividend reinvestment plans or stock purchase plans, or any
of the benefit plans of any of the Company's Affiliates for
such Affiliates' directors, officers or employees;
(ii) make any payment of principal or of interest or premium, if any, on or
repay, repurchase or redeem any debt security of the Company that, ranks PARI
PASSU with or junior in interest to the Series A Debentures; or (iii) make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary of the Company (other than the Preferred Securities
Guarantee) if such guarantee ranks PARI PASSU with or junior in interest to the
Series A Debentures.
(c) Prior to the termination of any Extended Interest Payment Period,
the Company may pay all or any portion of the interest accrued on the Series A
Debentures on any Interest Payment Date to holders of record on the regular
record date for such Interest Payment Date or from time to time further extend
such Extended Interest Payment Period; PROVIDED that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed 20 consecutive quarterly interest periods. Upon the termination of any
Extended Interest Payment Period and the payment of all accrued and unpaid
interest, including any Additional Interest and Compounded Interest, the Company
may commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof. On the Interest Payment Date
occurring at the end of the Extended Interest Payment Period, the Company shall
pay all accrued and unpaid interest on the Series A Debentures, including any
Additional Interest and Compounded Interest, to the holders of the Series A
Debentures in whose names the Series A Debentures are registered in the
Debenture Register
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<PAGE>
(regardless of who the holders of record may have been on other dates during the
Extended Interest Payment Period) on the record date for such Interest Payment
Date.
SECTION 4.02. Notice of Extension of Interest Payment Period.
(a) So long as the Property Trustee is the legal owner and sole
holder of record of the Series A Debentures, at the time the Company elects to
begin an Extended Interest Payment Period, the Company shall give both the
Property Trustee and the Trustee notice of its election to begin such Extended
Interest Payment Period one Business Day prior to the earlier of (i) the next
succeeding date on which Distributions (as defined in the Declaration of Trust)
on the Preferred Securities are payable or (ii) the date Pogo Trust I is
required to give notice of the record date or the date such Distributions are
payable to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities, but in any event not
less than one Business Day prior to such record date.
(b) If as a result of a Dissolution Event Series A Debentures have
been distributed to holders of Trust Securities, the Company shall give the
holders of the Series A Debentures and the Trustee notice of its election to
begin an Extended Interest Payment Period at least 10 Business Days prior to the
earlier of (i) the next succeeding Interest Payment Date or (ii) the date the
Company is required to give notice of the record or payment date of such related
interest payment to the New York Stock Exchange (if the Series A Debentures are
then listed thereon) or other applicable self-regulatory organization or to
holders of the Series A Debentures.
(c) The quarter in which any notice is given pursuant to Section 4.02
shall not be counted as one of the quarters permitted in the maximum Extended
Interest Payment Period permitted under this Article Four.
ARTICLE FIVE
Conversion of the Series A Debentures into Common Stock
SECTION 5.01. Conversion Rights.
Subject to and upon compliance with the provisions of this Article
Five, the Series A Debentures are convertible, at the option of the holder, at
any time prior to the Conversion Expiration Date, into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
rate of 2.1053 shares of Common Stock for each $50 in aggregate principal amount
of Series A Debentures (equal to a conversion price of $23.75 per share of
Common Stock), subject to adjustment as described in this Article Five (as
adjusted the "Conversion Price"). A holder of Series A Debentures may convert
any portion of the principal amount of the Series A Debentures into that number
of fully paid and nonassessable shares of Common Stock (calculated as to each
conversion to the nearest 1/100th of a share)
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<PAGE>
obtained by dividing the principal amount of the Series A Debentures to be
converted by the Conversion Price.
SECTION 5.02. Conversion Procedures.
(a) NOTICE OF CONVERSION. In order to convert all or a portion of
the Series A Debentures, the holder thereof shall deliver to the Property
Trustee, as conversion agent or to such other agent appointed by the Company for
such purposes (the "Conversion Agent") an irrevocable Notice of Conversion
setting forth the principal amount of Series A Debentures to be converted,
together with the name or names, if other than the holder, in which the shares
of Common Stock should be issued upon conversion and directing the Conversion
Agent to convert such Series A Debentures, on behalf of such holder into Common
Stock pursuant to the provisions of this Article Five, and, if such Series A
Debentures are definitive Series A Debentures, surrender to the Conversion Agent
the Series A Debentures to be converted, duly endorsed or assigned to the
Company or in blank. In addition, a holder of Preferred Securities may exercise
its right under the Declaration of Trust to convert such Preferred Securities
into Common Stock by delivering to the Conversion Agent an irrevocable Notice of
Conversion setting forth the information called for by the preceding sentence
and directing the Conversion Agent (i) to exchange such Preferred Security for a
portion of the Series A Debentures held by the Trust (at an exchange rate of $50
principal amount of Series A Debentures for $50 liquidation amount Preferred
Security) and (ii) to immediately convert such Series A Debentures, on behalf of
such holder, into Common Stock pursuant to the provisions of this Article Five
and, if such Preferred Securities are in the form of Definitive Preferred
Security Certificates, surrendering such Definitive Preferred Security
Certificates, duly endorsed or assigned to the Company or in blank.
If a Notice of Conversion is delivered after the close of business on
any regular record date and prior to the opening of business on the subsequent
Interest Payment Date, the holder of record on the regular record date shall be
entitled to receive the interest paid on the subsequent Interest Payment Date on
the portion of Series A Debentures 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 Debenture
which is converted, interest whose Interest Payment Date is on or after the date
of conversion of such Debenture shall not be payable, and the Company shall not
make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid interest on the Series A Debentures being
converted, which shall be deemed to be paid in full.
(b) CONVERSION DATE. Each conversion shall be deemed to have been
effected immediately prior to the close of business on the day on which the
Notice of Conversion was received (the "Conversion Date") by the Conversion
Agent from the Holder or from a holder of the Preferred Securities effecting a
conversion thereof pursuant to its conversion rights under the Declaration of
Trust, as the case may be. The Person or Persons entitled to receive the Common
Stock issuable upon such conversion shall be treated for all purposes as the
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<PAGE>
record holder or holders of such 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 Debentures on that date.
(c) DELIVERY OF COMMON STOCK UPON CONVERSION. 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 holders of the Preferred Securities identified in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the Fractional Share Cash Payment
Amount to the Person or Persons entitled to receive the same. The Conversion
Agent shall deliver such certificate or certificates to such person or Persons.
(d) SATISFACTION OF OBLIGATIONS UNDER THE SERIES A DEBENTURES. The
Company's delivery upon conversion of the fixed number of shares of Common Stock
into which the Series A Debentures are convertible (together with the cash
payment, if any, in lieu of fractional shares) shall be deemed to satisfy the
Company's obligation to pay the principal amount at maturity of the portion of
Series A Debentures so converted and any unpaid interest (including Additional
Interest and Compounded Interest, if any) accrued on such Series A Debentures at
the time of such conversion.
(e) CASH IN LIEU OF FRACTIONAL SHARES. No fractional shares of
Common Stock will be issued as a result of conversion, but in lieu thereof, the
Company shall pay to the Conversion Agent a cash adjustment in an amount equal
to the same fraction of the Closing Price with respect to such fractional
interest on the Conversion Date (the "Fractional Share Cash Payment Amount"),
or, if such day is not a day on which any securities are traded on the national
securities exchange or quotation system used to determine the Closing Price, on
the next such trading day, and the Conversion Agent in turn will make such
payment, if any, to the holder of the Series A Debentures or the holder of the
Preferred Securities so converted.
(f) ISSUANCE OF NEW DEBENTURES UPON PARTIAL CONVERSIONS. In the
event of the conversion of any Debenture in part only, a new Debenture or
Series A Debentures for the unconverted portion thereof will be issued in the
name of the holder thereof upon the cancellation of the Debenture converted in
part in accordance with Section 2.04.
(g) ROLE AND AUTHORITY OF THE CONVERSION AGENT. In effecting the
conversion transactions 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 Debentures) and as agent of the holders of
Series A Debentures (in the conversion of Series A Debentures into 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 Debentures
held by the Trust from time to time for Preferred Securities in connection with
the conversion of such Preferred Securities in accordance with this Article Five
and (ii) to convert all or a portion of the Series A Debentures into Common
Stock and thereupon to deliver such shares of Common
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<PAGE>
Stock in accordance with the provisions of this Article Five and to deliver to
the Trust a new Debenture or Series A Debentures for any resulting unconverted
principal amount.
(h) COMMON STOCK TO BE ISSUED UPON CONVERSION OF SERIES A
DEBENTURES. The Company shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Series A Debentures, such number of shares of Common Stock
as shall from time to time be issuable upon the conversion of all the Series
A Debentures then outstanding. Notwithstanding the foregoing, the Company
shall be entitled to deliver upon conversion of Series A Debentures shares of
Common Stock reacquired and held in the treasury of the Company (in lieu of
the issuance of authorized and unissued shares of 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 Common Stock
upon conversion of Series A Debentures and the Company has in effect at such
time a share purchase rights agreement under which holders of Common Stock
are issued rights ("Rights") entitling the holders under certain
circumstances to purchase an additional share or shares of Common Stock or
other capital stock of the Company, the Company will issue, together with
each such share of Common Stock, such number of Rights (which number may be a
fraction) as shall at that time be issuable with a share of Common Stock
pursuant to such share purchase rights agreement. Any shares of Common Stock
issued upon conversion of the Series A Debentures shall be duly authorized,
validly issued and fully paid and nonassessable. The Conversion Agent shall
deliver the shares of Common Stock received upon conversion of the Series A
Debentures 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 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 the Common Stock (and all requirements to
list the Common Stock issuable upon conversion of Series A Debentures that
are at the time applicable), in order to enable the Company to lawfully issue
Common Stock upon conversion of the Series A Debentures and to lawfully
deliver the Common Stock to each holder upon conversion of the Series A
Debentures.
(i) PAYMENT OF TAXES. The Company shall pay any and all taxes that
may be payable in respect of the issue or delivery of shares of Common Stock
excluding United States withholding taxes on conversion of Series A Debentures.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the Series A Debentures 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.
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<PAGE>
SECTION 5.03. Conversion Price Adjustments.
The Conversion Price shall be subject to adjustment (without
duplication) from time to time as follows:
(a) ADJUSTMENT UPON PAYMENT OF STOCK DIVIDENDS OR SUBDIVISIONS,
COMBINATIONS OR RECLASSIFICATIONS OF COMMON STOCK. In case the Company shall,
while any of the Series A Debentures are outstanding, (i) pay a dividend or make
a distribution with respect to its Common Stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, the Conversion Price in effect immediately prior to such action
shall be adjusted by multiplying it by a fraction, the numerator of which is
equal to the total number of outstanding shares of Common Stock immediately
prior to such dividend, distribution, subdivision, combination or
reclassification, and the denominator of which is equal to the total number of
outstanding shares of Common Stock immediately following such dividend,
distribution, subdivision, combination or reclassification.
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 Debenture 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 which would
then be in effect if such record date had not been fixed.
(b) ADJUSTMENT UPON ISSUANCE OF RIGHTS OR WARRANTS TO ACQUIRE COMMON
STOCK AT PRICES BELOW MARKET VALUE. In case the Company shall, while any of the
Series A Debentures are outstanding, issue rights or warrants to all holders of
its Common Stock entitling them (for a period expiring within 45 days after the
record date mentioned below) to subscribe for or purchase shares of Common Stock
at a price per share less than the Closing Price per share of Common Stock on
the record date mentioned below, the Conversion Price for the Series A
Debentures shall be adjusted so that the Conversion Price 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, the numerator of
which shall be the number of shares of Common Stock outstanding on the date
fixed for the determination of stockholders entitled to receive such rights or
warrants plus the number of shares which the aggregate offering price
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<PAGE>
of the total number of shares so offered for subscription or purchase would
purchase at such Closing Price, and the denominator of which shall be the number
of shares of Common Stock outstanding on the date fixed for the determination of
stockholders entitled to receive such rights or warrants plus the number of
additional shares of 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 Common Stock at any
time outstanding shall not include shares held in the treasury of the Company.
The Company agrees not to issue any rights or warrants in respect of
shares of 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) ADJUSTMENT UPON DISTRIBUTION OF EVIDENCES OF INDEBTEDNESS,
CAPITAL STOCK, CASH OR ASSETS. Subject to the last sentence of this
subparagraph (c), in case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of any class or series of capital stock, cash or assets (including
securities, but excluding (i) any rights or warrants referred to in
subparagraph (b), (ii) any dividend or distribution paid exclusively in cash
and (iii) any dividend or distribution referred to in subparagraph (a) of
this Section 5.03), the Conversion Price shall be reduced so that the
Conversion Price 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, the numerator of which shall be the Closing Price per share of the
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 resolution of the Board of Directors filed with the Trustee), 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
Common Stock, and the denominator of which shall be such Closing Price per
share of the 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
which 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 Common Stock or rights or warrants to subscribe for or
purchase shares of Common Stock shall be deemed instead to be (i) a dividend or
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<PAGE>
distribution of the evidences of indebtedness, shares of capital stock, cash or
assets other than such shares of 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 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 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) ADJUSTMENT UPON ALL-CASH DISTRIBUTIONS. In case the Company
shall pay or make a dividend or other distribution on its Common Stock
exclusively in cash (excluding (i) any cash dividends on Common Stock to the
extent that the aggregate cash dividends per share of Common Stock in any
consecutive 12-month period do not exceed the greater of (x) the amount per
share of Common Stock of the cash dividends paid on Common Stock in the
immediately preceding 12-month period, to the extent that such dividends for the
immediately preceding 12-month period did not require an adjustment of the
Conversion Price, and (y) 12.5% of the average of the daily Closing Prices of
the Common Stock for the ten consecutive trading days immediately prior to the
date of declaration of such dividend, and (ii) a redemption of any Rights issued
under a rights agreement), the Conversion Price shall be reduced so that the
Conversion Price 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, the numerator of
which shall be the Closing Price per share of the 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
Closing Price per share, determined as provided above) applicable to one share
of Common Stock and the denominator of which shall be such Closing Price per
share of the 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 Common Stock is equal to or
greater than the Closing Price per share of the Common Stock on the record date
mentioned above (excluding that portion of such distribution that does not
exceed 12.5% of the Closing 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 Debentures shall have the right to receive upon conversion
the amount of cash such holder would have received had such holder converted
each of the Series A Debentures 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 Closing Price per share, determined as provided above). In
the event that such dividend or distribution is not so paid
22
<PAGE>
or made, the Conversion Price shall again be adjusted to be the conversion price
which would then be in effect if such record date had not been fixed.
(e) ADJUSTMENT UPON A TENDER OR EXCHANGE OFFER. 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 the 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 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 resolution of the
Board of Directors) 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 Closing Price of the Common Stock
on the trading day next succeeding the Expiration Time, the Conversion Price
shall be reduced so that the Conversion Price 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, the numerator of which shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time (including the Purchased Shares) (as defined
below) multiplied by the Closing Price per share of the Common Stock on the
trading day next succeeding the Expiration Time and the denominator of which
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 in excess of the Closing Price per share that does not exceed
110% of the Closing Price per share) and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the
Expiration Time and the Closing Price per share of the Common Stock on the
trading day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following
the Expiration Time. 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 which would then be in effect if such record date had not been fixed.
(f) COMPANY'S OPTION TO REDUCE THE CONVERSION PRICE. 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 Business Days,
provided, that the Company shall give at least 15 days' notice of such reduction
to the Trustee and the holders of the Series A Debentures. The Company may, at
its option, make such reductions in the Conversion Price, in addition to those
set forth above, as the Board of Directors deems advisable to avoid or diminish
any income tax to holders of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to acquire stock or from
any event treated as such for tax purposes or for any other reasons.
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<PAGE>
(g) LIMITATION ON ADJUSTMENTS. If any action would require
adjustment of the Conversion Price pursuant to more than one of the
anti-dilution 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 holders of the Series A Debentures. 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 any subsequent adjustment.
SECTION 5.04. Fundamental Change.
(a) In the event that the Company is a party to any transaction,
including, without limitation, a merger (other than a merger that does not
result in a reclassification, conversion, exchange or cancellation of Common
Stock), consolidation, sale of all or substantially all of the assets of the
Company, recapitalization or reclassification of 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 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 Common Stock shall
be converted into the right to receive, or shall be exchanged for, (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 Debenture shall thereafter be convertible into the kind
and, in the case of a Transaction which does not involve a Fundamental Change,
amount of securities, cash and other property receivable upon the consummation
of such Transaction by a holder of that number of shares of Common Stock into
which a Debenture was convertible immediately prior to such Transaction, or (ii)
in the case of a Transaction involving a Common Stock Fundamental Change, common
stock, each Debenture shall thereafter be convertible (in the manner described
herein) into common stock of the kind received by holders of Common Stock (but
in each case after giving effect to any adjustment discussed in paragraphs (b)
and (c) below relating to a Fundamental Change if such Transaction constitutes a
Fundamental Change). The holders of Series A Debentures or Preferred Securities
will have no voting rights with respect to any Transaction described in this
section.
(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 Debenture shall be convertible solely into common stock of the kind
received by holders of 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
such that:
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<PAGE>
(1) in the case of a Non-Stock Fundamental Change, the
Conversion Price of the Series A Debentures 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, and (B) the result obtained by multiplying the
greater of the Applicable Price or the then applicable Reference
Market Price by a fraction, the numerator of which shall be $50 and
the denominator of which shall be (x) the amount of the Optional
Redemption Price for the Debenture 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
Debentures and through May 31, 2000, and the twelve-month periods
commencing June 1, 2000 and June 1, 2001, the product of 106.50%,
105.85% and 105.20%, respectively, multiplied by $50) plus (y) any
then-accrued and unpaid interest on the Series A Debentures; and
(2) in the case of a Common Stock Fundamental Change, the
Conversion Price of the Series A Debentures in effect immediately
prior to such Common Stock Fundamental Change, but after giving effect
to any other prior adjustments, will thereupon be adjusted by
multiplying such Conversion Price by a fraction, the numerator of
which shall be the Purchaser Stock Price and the denominator shall 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 Common Stock is common stock of
the successor, acquirer, 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 the Common Stock will have been exchanged for, converted into, or
acquired for common stock (and cash with respect to fractional
interests) of the successor, acquirer, or other third party, the
Conversion Price of the Series A Debentures in effect immediately
prior to such Common Stock Fundamental Change will thereupon be
adjusted by multiplying such Conversion Price by a fraction, the
numerator of which shall be one and the denominator of which shall be
the number of shares of common stock of the successor, acquirer, or
other third party received by a holder of one share of Common Stock as
a result of such Common Stock Fundamental Change.
SECTION 5.05. 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 and the Controller
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 Debenture Registrar; and
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<PAGE>
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of the Series A Debentures at their
last addresses as they appear upon the Debenture Register.
SECTION 5.06. Dividend or Interest Reinvestment Plans.
Notwithstanding anything to the contrary in this Article Five, no
adjustment of the Conversion Price will be made upon the issuance of any shares
of Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company. The
investment of additional optional amounts in shares of Common Stock under any
such plan, and the issuance of any shares of Common Stock or options or rights
to purchase such shares pursuant to any employee benefit plan or program of the
Company or any of its Subsidiaries or joint ventures currently existing or
adopted subsequent to May 26, 1999 or pursuant to any option, warrant, right or
exercisable, exchangeable or convertible security outstanding as of the date the
Series A Debentures were first issued, shall not be deemed to constitute an
issuance of Common Stock or exercisable, exchangeable or convertible securities
by the Company to which any of the adjustment provisions described above
applies. There shall also be no adjustment of the Conversion Price in case of
the issuance of any stock (or securities convertible into or exchangeable for
stock) of the Company except as specifically described in this Article Five.
SECTION 5.07. 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 Debenture or to any holder
of a Preferred Security to determine whether any facts exist which 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 or whether a supplemental indenture need be entered into. 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 Common Stock or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Debenture; 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 Common Stock or
stock certificates or other securities or property upon the surrender of any
Debenture for the purpose of conversion, or, except as expressly herein
provided, to comply with any of the covenants of the Company contained in this
Article Five.
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<PAGE>
ARTICLE SIX
Covenants Applicable to the Series A Debentures
SECTION 6.01. Prohibited Actions While Preferred Securities are
Outstanding. So long as any Preferred Securities issued by Pogo Trust I remain
outstanding, the Company shall not (i) declare or pay any dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its capital stock (other than (a) dividends or distributions
in shares of, or options, warrants, rights to subscribe for or purchase shares
of, common stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) as a result of a reclassification of the Company's
capital stock or the exchange or the conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (d) the payment of accrued dividends and 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, or (e) purchases of the Company's common stock related to the
issuance of the Company's common stock or rights under any of the Company's
benefit plans for its directors, officers, employees, any of the Company's
dividend reinvestment plans or stock purchase plans, or any of the benefit plans
of any of the Company's Affiliates for such Affiliates' directors, officers or
employees), (ii) make any payment of principal or of interest or premium, if
any, on or repay, repurchase or redeem any debt security of the Company that,
ranks PARI PASSU with or junior in interest to the Series A Debentures or (iii)
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any Subsidiary of the Company (other than pursuant to the
Preferred Securities Guarantee or a substantially similar guarantee agreement
relating to a series of trust preferred securities substantially similar to the
Preferred Securities) if such guarantee ranks PARI PASSU with or junior in
interest to the Series A Debentures, if at such time (x) the Company shall be in
default with respect to its Guarantee Payments (as defined in the Preferred
Securities Guarantee) or other payment obligations under the Preferred
Securities Guarantee, (y) there shall have occurred any Event of Default with
respect to the Series A Debentures or (z) the Company shall have given notice of
its election to defer payments of interest on the Series A Debentures by
extending the interest payment period in accordance with Article Four hereof.
SECTION 6.02. Listing on the NYSE. In connection with the
distribution of the Series A Debentures to the holders of the Preferred
Securities upon a Dissolution Event, the Company will use its best efforts to
list such Series A Debentures on the New York Stock Exchange or on such other
exchange or quotation system as the Preferred Securities are then listed and
traded.
SECTION 6.03. Compliance With the Declaration of Trust. The Company
covenants and agrees for the benefit of the holders of the Preferred Securities
to comply fully with all
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<PAGE>
of its obligations and agreements under the Declaration of Trust, including,
without limitation, its obligations under Article 4 thereof.
SECTION 6.04. Covenants With Respect to Pogo Trust I. Prior to the
distribution of Series A Debentures to the holders of Preferred Securities upon
a Dissolution Event, the Company covenants and agrees for the benefit of the
holders of the Preferred Securities (i) to remain the sole direct or indirect
owner of all of the outstanding Common Securities and not to cause or permit the
Common Securities to be transferred except as permitted by the Declaration of
Trust, provided that any permitted successor of the Company under the Indenture
may succeed to the Company's ownership of the Common Securities, and (ii) use
reasonable efforts to cause Pogo Trust I to continue to be treated as a grantor
trust for United States federal income tax purposes, except in connection with a
Dissolution Event.
ARTICLE SEVEN
Form of Series A Debentures
SECTION 7.01. The Series A Debentures and the Trustee's Certificate
of Authentication to be endorsed thereon are to be substantially in the
following forms:
(FORM OF FACE OF SERIES A DEBENTURE)
[IF THE SERIES A DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This
Debenture is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Debenture is exchangeable for Debentures registered in the
name of a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized representative to
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
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No. $
CUSIP NO. 730448AM9
POGO PRODUCING COMPANY
6 1/2% JUNIOR SUBORDINATED CONVERTIBLE DEBENTURE, SERIES A DUE 2029
POGO PRODUCING COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (herein referred to as the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _________________
_______, or registered assigns, the principal sum of _________ Dollars on
June 1, 2029, PROVIDED, if a Tax Event occurs, then the Company will have the
right (a) prior to the dissolution of Pogo Trust I, to shorten the Maturity Date
of this series of Debentures to the minimum extent required, but not earlier
than June 2, 2014, or (b) to direct the Property Trustee to dissolve Pogo Trust
I (if not previously dissolved) and shorten the Maturity Date of this series of
Debentures to the minimum extent required, but not earlier than June 2, 2014, in
each case such that in the opinion of counsel to the Company, experienced in
such matters, after shortening the Maturity Date, interest paid on this
series of Debentures will be deductible for federal income tax purposes, and to
pay interest on said principal sum from June 2, 1999 or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly in arrears on March 1,
June 1, September 1 and December 1 of each year, commencing September 1, 1999 at
the rate of 6 1/2% per annum plus Additional Interest and Compounded Interest,
if any, until the principal hereof shall have become due and payable, and on
any overdue principal and premium, if any.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right to defer payments of interest on this series of
Debentures by extending the interest payment period of this series of Debentures
at any time from time to time for up to 20 consecutive quarterly interest
periods (each such period an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest accrued and unpaid thereon
(together with Compounded Interest and Additional Interest, if any); PROVIDED
THAT no Extended Interest Payment Period may extend beyond the Maturity Date or
redemption date of this series of Debentures. Prior to the termination of any
Extended Interest Payment Period, the Company may pay all or any portion of the
interest accrued on this series of Debentures on any Interest Payment Date to
holders of record on the regular record date for such Interest Payment Date or
prepay at any time all or any portion of the interest accrued during an
Extension Period or from time to time further extend such Extended Interest
Payment Period; PROVIDED THAT such Extended Interest Payment Period together
with all such further extensions thereof shall not exceed 20 consecutive
quarterly interest periods or extend beyond the Maturity Date or redemption date
of this series of Debentures. Upon the termination of any Extended Interest
Payment Period and the payment of all accrued and
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<PAGE>
unpaid interest, including any Additional Interest and Compounded Interest, the
Company may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof. On the Interest Payment
Date occurring at the end of the Extended Interest Payment Period, the Company
shall pay all accrued and unpaid interest on this series of Debentures,
including any Additional Interest and Compounded Interest, to the holders of
this series of Debentures in whose names this series of Debentures are
registered in the Debenture Register (regardless of who the holders of record
may have been on other dates during the Extended Interest Payment Period) on the
record date for such Interest Payment Date.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly interest period for which interest is
computed, interest shall be computed on the basis of the actual number of days
elapsed per 90-day quarter. In the event that any date on which interest is
payable on this series of Debentures is not a Business Day, then payment of
interest payable on such date shall be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable. The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Debenture (or one or more
Predecessor Debentures, as defined in said Indenture) is registered at the close
of business on the regular record date for such interest installment, [IF POGO
TRUST I OR ITS PROPERTY TRUSTEE IS THE HOLDER OF RECORD OF THIS DEBENTURE --
which shall be the close of business on the Business Day next preceding such
Interest Payment Date, provided if the Preferred Securities of Pogo Trust I are
no longer in book-entry only form, the regular record dates shall be the close
of business on the fifteenth (15th) day of the month in which such Interest
Payment Date occurs] [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE
INDENTURE THIS series of Debentures IS NOT REPRESENTED BY A GLOBAL DEBENTURE --
which shall be the close of business on the fifteenth (15th) day of the month in
which such Interest Payment Date occurs.] Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered holders on such regular record date, and shall instead be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
or quotation system on which the Debentures of this series may be listed or
traded, and upon such notice as may be required by such exchange or quotation
system, all as more fully provided in Section 2.03 of the Indenture. The
principal of and the interest on this
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Debenture shall be payable at the Corporate Trust Office of the Trustee, in any
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debts; PROVIDED, HOWEVER, that
payment of interest may be made at the option of the Company by check mailed to
the registered holder at such addresses as shall appear in the Debenture
Register and that the payment of principal will only be made upon the surrender
of this Debenture to the Trustee. Notwithstanding the foregoing, so long as the
owner and record holder of this Debenture is the Property Trustee (as defined in
the Indenture), the payment of the principal of and interest (including
Additional Interest and Compounded Interest, if any) on this Debenture will be
made by the Company in immediately available funds on the payment date therefor
at such place and to the Property Account (as defined in the Indenture)
established and maintained by the Property Trustee pursuant to the Declaration
of Trust (as defined in the Indenture).
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Debt (as defined in the Indenture), and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each holder of this Debenture, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. Each holder hereof, by his
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Debt, whether now outstanding or hereafter incurred, and waives reliance
by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
Dated:
------------------------
POGO PRODUCING COMPANY
By:
-------------------------------------
Name:
Title:
Attest:
By:
---------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in
the within-mentioned Indenture.
- ------------------------------ ------------------------------------
as Trustee or as Authentication Agent
By By
---------------------------- ----------------------------------
Authorized Signatory Authorized Signatory
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<PAGE>
(FORM OF REVERSE OF SERIES A DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of June 1, 1999 duly executed and delivered between the
Company and Wilmington Trust Company, a Delaware banking corporation, as Trustee
(herein referred to as the "Trustee"), as supplemented by the Supplemental
Indenture No. 1 dated as of June 1, 1999 ("Supplemental Indenture No. 1")
between the Company and the Trustee (said Indenture as so supplemented being
hereinafter referred to as the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Debentures, and, to the
extent specifically set forth in the Indenture, the holders of Senior Debt and
Preferred Securities. By the terms of the Indenture, the Debentures are
issuable in series which may vary as to amount, date of maturity, rate of
interest and in other respects as in the Indenture provided. This series of
Debentures is designated the 6 1/2% Junior Subordinated Convertible Debentures,
Series A due 2029 and is limited in aggregate principal amount as specified in
said Supplemental Indenture No. 1.
Except as provided in the next paragraph, the Debentures of this
series shall not be redeemed by the Company prior to June 1, 2002. The Company
shall have the right to redeem this Debenture at the option of the Company, in
whole or in part, at any time from time to time on or after June 1, 2002 (an
"Optional Redemption"), upon not less than 30 nor more than 60 days' notice to
the holders of the Debentures of this series, during the twelve-month periods
commencing June 1 in each of the following years at the indicated redemption
price (expressed as a percentage of the principal amount of the Series A
Debentures being redeemed), together with any accrued but unpaid interest
thereon, including Compounded Interest and Additional Interest, if any, to, but
excluding, the date of such redemption (the "Optional Redemption Price"):
<TABLE>
<CAPTION>
Redemption Price Redemption Price
---------------- ----------------
(% of (% of
principal principal
Year amount) Year amount)
---- ------ ---- ------
<S> <C> <C> <C>
2002 . . . . . . 104.55% 2006 . . . . . . . . 101.95%
2003 . . . . . . 103.90% 2007 . . . . . . . . 101.30%
2004 . . . . . . 103.25% 2008 . . . . . . . . 100.65%
2005 . . . . . . 102.60% 2009 and thereafter . 100%
</TABLE>
If the Debentures of this series are redeemed on any Interest Payment
Date, accrued and unpaid interest shall be payable to holders of record on the
relevant record date.
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<PAGE>
The Company shall not redeem any Debentures of this series unless all
accrued and unpaid interest thereon, including Compounded Interest and
Additional Interest, if any, has been paid for all quarterly interest periods
terminating on or prior to the date of notice of redemption.
If a Special Event shall occur and be continuing, this Series A
Debenture shall be exchangeable for Preferred Securities in accordance with
Section 3.05 of the Indenture or, in certain circumstances, redeemable by the
Company in accordance with Section 3.02 of the Indenture.
If a Tax Event shall occur or be continuing, the Company shall have
the right at any time to redeem the Debentures of this series in whole, but not
in part, for cash at the Tax Redemption Price, together with any accrued unpaid
interest thereon, including Compounded Interest and Additional Interest, if any,
to but excluding the date of such redemption within 90 days following the
occurrence of such Tax Event.
"Tax Event" means that the Company and the Regular Trustees shall
have received an opinion of nationally recognized independent counsel
experienced in such matters to the effect that on or after May 26, 1999 as a
result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation or
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 the theretofore
generally accepted position or (d) any action taken by any governmental
agency or regulatory authority, which amendment or change is enacted,
promulgated, issued or announced or which interpretation or pronouncement is
issued or announced or which action is taken, in each case on or after May
26, 1999, there is more than than a remote risk that (i) Pogo Trust I is, or
will be within 90 days of the date thereof, subject to federal income tax
with respect to income accrued or received on the Debentures of this series,
(ii) Pogo Trust I is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by the Company to Pogo Trust I on the
Debentures of this series is not, or within 90 days of the date thereof will
not be, deductible by the Company for federal income tax purposes;
34
<PAGE>
"Tax Redemption Price" means with respect to each $50 principal
amount of Series A Debentures (i) if the Series A Debentures are redeemed as
a result of the occurrence of a Tax Event prior to June 1, 2002, the greater
of (a) the total principal amount of such Series A Debenture or the
liquidation amount of the Preferred Securities, (b) the average of the
highest and lowest reported sale prices, regular way, of the Preferred
Securities over the five trading days immediately prior to the day on which
notice of such redemption is given, and (c) the average of the highest and
lowest reported sale prices, regular way, of Preferred Securities on the
trading day immediately prior to the day on which notice of such redemption
is given, or (ii) if the Series A Debentures are redeemed as a result of the
occurrence of a Tax Event on or after June 1, 2002, the principal amount of
such Series A Debentures. For purposes of clauses (b) and (c) above, if the
Series A Debentures have been distributed in exchange for Preferred
Securities, the references to sales prices shall be deemed to refer to the
sales price, of the Series A Debentures.
If the Debentures of this series are only partially redeemed by the
Company pursuant to an Optional Redemption, the Debentures shall be redeemed pro
rata or by lot or in some other equitable manner determined by the Trustee;
provided if, at the time of redemption, the Debentures of this series are
registered as a Global Debenture, the Depository shall determine the principal
amount of such Debentures of this series held by each holder of Debentures to be
redeemed in accordance with its customary procedures. Notwithstanding the
foregoing, if a partial redemption of the Debentures of this series would result
in the delisting of the Preferred Securities by any national securities exchange
or other organization on which the Preferred Securities are then listed or
traded, the Company shall not be permitted to effect such partial redemption and
will only redeem the Debentures of this series in whole.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for unredeemed portion hereof will be
issued in the name of the holder hereof upon the cancellation hereof.
Subject to the terms and conditions set forth in Article V of
Supplemental Indenture No. 1, this Debenture is convertible, at the option of
the holder hereof, into shares of Common Stock upon delivery by such holder to
the Conversion Agent of an irrevocable Notice of Conversion [IF DEBENTURE ISSUED
IN CERTIFICATED FORM -- and, surrender to the Conversion Agent by such holder of
this Debenture, duly endorsed or assigned to the Company in a blank.] In
addition a holder of Preferred Securities may exercise its right under the
Declaration of Trust to convert such Preferred Securities into Common Stock by
delivering to the Conversation Agent an irrevocable Notice of Conversion
directing
35
<PAGE>
the Conversion Agent (i) to exchange such Preferred Security for the portion of
this Debenture held by the Trust and (ii) to immediately convert such portion of
this Debenture, on behalf of such holder, into Common Stock, and if such
Preferred Securities are in the form of Definitive Preferred Security
Certificates, surrendering such Definitive Preferred Security Certificates, duly
endorsed or assigned to the Company or in blank. A form of Notice of Conversion
is included at the end of this Debenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures of this
series may be declared, and upon such declaration shall become, due and payable,
in the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture (and, if this Debenture is held as a
trust asset of Pogo Trust I, such consent of holders of the Preferred Securities
and the Common Securities as may be required under the Declaration of Trust), to
execute supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or of modifying in any manner the rights of the
holders of the Debentures; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) extend the fixed maturity of the Debentures of this series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holder of each Debenture so affected or (ii)
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of each Debenture (and, if this Debenture is held as a trust asset of
Pogo Trust I, such consent of the holders of the Preferred Securities and the
Common Securities as may be required under the Declaration of Trust) then
outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of a majority in aggregate principal amount of the
Debentures of a series at the time outstanding affected thereby (subject, in the
case of a Debenture held as a trust asset of Pogo Trust I and with respect to
which a securities exchange has not theretofore occurred, to such consent of
holders of Preferred Securities and Common Securities as may be required under
the Declaration of Trust), on behalf of the holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Debentures of
such series as and when the same shall become due by the terms of the Debentures
of such series otherwise than by acceleration (unless such default
36
<PAGE>
has been cured and a sum sufficient to pay all matured installments of interest
and principal and any premium has been deposited with the Trustee), or a call
for redemption of the Debentures of such series. Any such consent or waiver by
the registered holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
Subject to Section 13.11 of the Indenture, no reference herein to the
Indenture (other than such Section) and no provision of this Debenture or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this Debenture at the
time and place at the rate and in the money herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture Register, upon surrender of this Debenture for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
37
<PAGE>
[If certificated Debentures -- The Debentures of this series are
issuable only in registered form without coupons in denominations of $50 and any
integral multiple thereto.] [If Global Debenture -- This Global Debenture is
exchangeable for Debentures in definitive form under certain limited
circumstances set forth in the Indenture. Debentures of this series so issued
are issuable only in registered form without coupons in denominations of $50 or
any integral multiple thereof.] As provided in the Indenture and subject to
certain limitations [If Global Debenture -- herein and] therein set forth,
Debentures of this series [If Global Debenture -- so issued] are exchangeable
for a like aggregate principal amount of Debentures of this series of a
different authorized denomination, as requested by the holder surrendering the
same.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
38
<PAGE>
FORM OF NOTICE OF CONVERSION
To: Pogo Producing Company
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion below designated, into
Common Stock of Pogo Producing Company in accordance with the terms of the
Indenture referred to in this Debenture, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Date: ____________, ____
in whole _______ Portions of Debenture to be in part converted ($50
or integral multiples thereof):
$
-------------------------------------------------
--------------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Signature Guarantee:*____________________________________
* Signature must be guaranteed by an institution which is a member of one or
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.
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<PAGE>
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. The Indenture, as supplemented by this Supplemental
Indenture, is in all respects ratified and confirmed. This Supplemental
Indenture No. 1 shall be deemed part of the Indenture in the manner and to the
extent herein and therein provided.
SECTION 8.02. Enforcement Rights of Holders of Preferred Securities.
A holder of Preferred Securities will (i) have the right to enforce the Property
Trustee's rights as holder of the Series A Debentures if the Property Trustee
fails to enforce its rights under the Series A Debentures and (ii) have the
right to directly institute a proceeding for enforcement of payment to such
holder of the principal of or interest on the Series A Debentures if an Event of
Default has occurred and is continuing and such event is attributed to the
failure of the Company to pay interest or principal on the Series A Debentures,
in the manner and to the extent set forth in Section 3.10(e) of the Declaration
of Trust.
SECTION 8.03. Recitals. The recitals herein contained are made by
the Company and not by the Trustee, and the Trustee assumes no responsibility
for the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Indenture No. 1.
SECTION 8.04. Counterparts. This Supplemental Indenture No. 1 may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
SECTION 8.05. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE NO. 1 AND
EACH SERIES A DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 8.06. Separability. In case any one or more of the
provisions contained in this Supplemental Indenture No. 1 or in the Series A
Debentures shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Supplemental Indenture No. 1 or of the Series A
Debentures, but this Supplemental Indenture No. 1 and the Series A Debentures
shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.
40
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 1 to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
POGO PRODUCING COMPANY
By:
--------------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY
as Trustee
By:
--------------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
41
<PAGE>
POGO PRODUCING COMPANY
GUARANTEE AGREEMENT
POGO TRUST I
----------------------
Dated as of June 2, 1999
----------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS.............................................................1
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION........................................4
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES................................5
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE........................................5
SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE...............................5
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT........................5
SECTION 2.06. EVENTS OF DEFAULT; WAIVER...............................................5
SECTION 2.07. DISCLOSURE OF INFORMATION...............................................6
SECTION 2.08. CONFLICTING INTEREST....................................................6
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE..............................6
SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE......................7
SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE...................9
SECTION 3.04. THE GUARANTEE TRUSTEE MAY OWN PREFERRED SECURITIES......................9
SECTION 3.05. MONEYS RECEIVED BY THE GUARANTEE TRUSTEE TO BE HELD IN
TRUST WITHOUT INTEREST..................................................9
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. QUALIFICATIONS..........................................................9
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE................................................................10
ARTICLE 5
GUARANTEE
SECTION 5.01. GUARANTEE..............................................................10
SECTION 5.02. WAIVER OF NOTICE.......................................................11
SECTION 5.03. OBLIGATIONS NOT AFFECTED...............................................11
SECTION 5.04. ENFORCEMENT OF GUARANTEE...............................................12
SECTION 5.05. GUARANTEE OF PAYMENT...................................................12
SECTION 5.06. SUBROGATION............................................................12
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 5.07. INDEPENDENT OBLIGATIONS................................................12
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. LIMITATION OF TRANSACTIONS.............................................13
SECTION 6.02. SUBORDINATION..........................................................13
ARTICLE 7
TERMINATION
SECTION 7.01. TERMINATION............................................................14
ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. EXCULPATION............................................................14
SECTION 8.02. INDEMNIFICATION........................................................14
SECTION 8.03. SURVIVE TERMINATION....................................................15
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. SUCCESSORS AND ASSIGNS.................................................15
SECTION 9.02. AMENDMENTS.............................................................15
SECTION 9.03. NOTICES................................................................15
SECTION 9.04. GENDERS................................................................16
SECTION 9.05. BENEFIT................................................................16
SECTION 9.06. GOVERNING LAW..........................................................16
SECTION 9.07. COUNTERPARTS...........................................................16
SECTION 9.08. LIMITED LIABILITY......................................................16
</TABLE>
ii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of June 2, 1999, is executed and
delivered by Pogo Producing Company, a Delaware corporation (the "Guarantor"),
and Wilmington Trust Company, a Delaware banking corporation, as the initial
Guarantee Trustee (as defined herein) for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
Pogo Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of June 2, 1999 among the trustees of the
Issuer named therein, Pogo Producing Company, as Sponsor, and the Holders
from time to time of preferred undivided beneficial interests in the assets
of the Issuer, the Issuer may issue up to $150,000,000 aggregate liquidation
amount of its 6 1/2% Cumulative Quarterly Income Convertible Preferred
Securities, Series A (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Issuer and having the
terms set forth in Exhibit B to the Declaration, of which $150,000,000
aggregate liquidation amount of Preferred Securities is being issued as of
the date hereof; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein; and
NOW, THEREFORE, in consideration of the purchase by the initial
purchasers thereof of Preferred Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time.
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) Capitalized terms used in this
Guarantee Agreement but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
<PAGE>
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of this definition, beneficial ownership of 10% or
more of the voting common equity (on a fully diluted basis) or options or
warrants to purchase such equity (but only if exercisable at the date of
determination or within 60 days thereof) of a Person shall be deemed to
constitute control of such Person. No Person shall be deemed an Affiliate of
an oil and gas royalty trust solely by virtue of ownership of units of
beneficial interest in such trust.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer, having the terms set forth in
Exhibit C to the Declaration.
"Common Stock" means the common stock, $1.00 par value per share, of
the Guarantor, including associated preferred share purchase rights.
"Debentures" means the series of unsecured junior subordinated
convertible debentures issued by the Guarantor under the Indenture to the
Property Trustee and entitled the "6 1/2% Junior Subordinated Convertible
Debentures, Series A due 2029."
"Declaration" has the meaning set forth in the first WHEREAS clause
above.
"Distributions" means the periodic distributions and other payments
payable to Holders in accordance with the terms of the Preferred Securities set
forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; PROVIDED, HOWEVER,
that, except with respect to a default in payment of any Guarantee Payment, any
such default shall constitute an Event of Default only if the Guarantor shall
have received notice of such default and shall not have cured such default
within 30 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions, (ii) the Redemption Price, including all accumulated and unpaid
Distributions to the date of redemption, with respect to the Preferred
Securities called for redemption by the Issuer but in each of (i) and (ii) only
if and to the extent that in each case the Guarantor has made corresponding
payments to the Property Trustee of interest or principal or premium, if any, on
the Debentures and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of the Issuer (other than in connection with the distribution of
Debentures to Holders in exchange for Preferred Securities or the redemption of
all the Preferred Securities upon the maturity or redemption of the Debentures
as provided in the Declaration), the lesser of (a) the
2
<PAGE>
aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer has funds on hand legally available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer as required by applicable law (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means Wilmington Trust Company, a Delaware banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of June
1, 1999 between the Guarantor and Wilmington Trust Company, as trustee, as
supplemented by Supplemental Indenture No. 1 thereto dated as of June 1, 1999
(the "Supplemental Indenture"), pursuant to which the Debentures are to be
issued to the Property Trustee.
"Liquidation Distribution" has the meaning specified in the
definition of Guarantee Payments.
"Majority in liquidation amount of the Preferred Securities" means,
except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) represents more than 50% of the liquidation amount
of all outstanding Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President or a Vice President, and by the Treasurer, an Associate Treasurer,
an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary,
of such Person, and delivered to the Guarantee Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 2.04 shall be the
principal executive, financial or accounting officer of the Guarantor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(i) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating
thereto;
4
<PAGE>
(ii) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(iii) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.
"Property Trustee" means the Person acting as Property Trustee under
the Declaration.
"Redemption Price" means the amount payable on redemption of the
Preferred Securities in accordance with the terms of the Preferred Securities.
"Responsible Officer" means, when used with respect to the Guarantee
Trustee, any officer within the corporate trust department of the Guarantee
Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Guarantee Trustee who customarily performs functions similar to those performed
by the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of such Person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Guarantee Agreement.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION. (a) This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control; and
4
<PAGE>
(c) the application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing preferred undivided beneficial interests in the assets
of the Issuer.
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES. (a) The
Guarantor shall provide the Guarantee Trustee (unless the Guarantee Trustee is
otherwise the registrar of the Preferred Securities) (i) within 14 days after
each record date for payment of Distributions, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date, and (ii) at any other time within
30 days of receipt by the Guarantor of a written request for a List of Holders
as of a date no more than 14 days before such List of Holders is given to the
Guarantee Trustee; PROVIDED, that the Guarantor shall not be obligated to
provide such List of Holders at any time that the List of Holders does not
differ from the most recent List of Holders given to the Guarantee Trustee by
the Guarantor. The Guarantee Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in the List of Holders given
to it; PROVIDED, that the Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) the Guarantee Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after
May 15 of each year, commencing May 15, 2000, the Guarantee Trustee shall
provide to the Holders such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with the other requirements of Section 313 of the Trust
Indenture Act. A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Guarantee Trustee with the
Guarantor, with each stock exchange upon which any Preferred Securities are
listed (if so listed) and also with the Commission. The Guarantor agrees to
notify the Guarantee Trustee when any Preferred Securities become listed on
any stock exchange and any delisting thereof.
SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee, the Commission and the
Holders, as applicable, such documents, reports and information as required
by Section 314(a)(1)-(3) (if any) of the Trust Indenture Act and the
compliance certificates required by Section 314(a)(4) and (c) of the Trust
Indenture Act, any such certificates to be provided in the form, in the
manner and at the times required by Section 314(a)(4) and (c) of the Trust
Indenture Act (PROVIDED that any certificate to be provided pursuant to
Section 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each fiscal year of the Guarantor).
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
which relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c) may be given in the form of an Officers' Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER. (a) The Holders of a Majority
in liquidation amount of the Preferred Securities may, by vote, on behalf of the
Holders, waive any past Event of
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Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default, or impair any right consequent thereon.
(b) The right of any Holder to receive payment of the Guarantee
Payments in accordance with this Guarantee Agreement, or to institute suit for
the enforcement of any such payment, shall not be impaired without the consent
of each such Holder.
SECTION 2.07. DISCLOSURE OF INFORMATION. The disclosure of information
as to the names and addresses of the Holders in accordance with Section 312 of
the Trust Indenture Act, regardless of the source from which such information
was derived, shall not be deemed to be a violation of any existing law, or any
law hereafter enacted which does not specifically refer to Section 312 of the
Trust Indenture Act, nor shall the Guarantee Trustee be held accountable by
reason of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.
SECTION 2.08. CONFLICTING INTEREST. The Declaration shall be deemed to
be specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder exercising his or her
rights pursuant to Section 5.04(iv). The right, title and interest of the
Guarantee Trustee to this Guarantee Agreement shall vest automatically in each
Person who may hereafter be appointed as Guarantee Trustee in accordance with
Article 4. Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) This Guarantee Agreement and all moneys received by the Property
Trustee in respect of the Guarantee Payments will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of, or for the
benefit of, the Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default known to a Responsible Officer of the Guarantee Trustee,
transmit by mail, first class postage prepaid, to the Holders, as their names
and addresses appear upon the List of Holders, notice of all such Events of
Default, unless such defaults shall have been cured before the giving of such
notice; PROVIDED, that, the Guarantee Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors and/or Responsible
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Officers, of the Guarantee Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders. The Guarantee
Trustee shall not be deemed to have knowledge of any Event of Default except
any Event of Default as to which the Guarantee Trustee shall have received
written notice or a Responsible Officer charged with the administration of
this Guarantee Agreement shall have obtained written notice of such Event of
Default.
(e) The Guarantee Trustee shall continue to serve as a trustee until
a Successor Guarantee Trustee has been appointed and accepted that appointment
in accordance with Article 4.
SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) The Guarantee Trustee, before the occurrence of an Event of Default and
after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06), the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or the Trust Indenture Act are specifically required to
be furnished to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee
Agreement or the Trust Indenture Act, as the case may be;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that
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the Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount
of Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate, which, upon receipt of
such request, shall be promptly delivered by the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which may
be counsel to the Guarantor or any of its Affiliates and may include
any of its employees) selected by it in good faith and with due care
and the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon and in accordance with such advice
and opinion and (B) shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have
offered to the Guarantee Trustee security and indemnity satisfactory to
the Guarantee Trustee against the costs, expenses (including its
attorneys' fees and expenses) and liabilities that might be incurred by
it in complying with such request or direction; PROVIDED that nothing
contained in this clause (iv) shall relieve the Guarantee
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Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured or waived) to exercise such of the rights and
powers vested in it by this Guarantee Agreement, and to use the same
degree of care and skill in this exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her
own affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be required to
inquire as to the authority of the Guarantee Trustee to so act, or as
to its compliance with any of the terms and provisions of this
Guarantee Agreement, both of which shall be conclusively evidenced by
the Guarantee Trustee's or its agent's taking such action.
SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken as the
statements of the Guarantor and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee Agreement.
SECTION 3.04. THE GUARANTEE TRUSTEE MAY OWN PREFERRED SECURITIES. The
Guarantee Trustee, in its individual or any other capacity, may become the owner
or pledgee of Preferred Securities and may otherwise deal with the Guarantor
with the same rights it would have if it were not Guarantee Trustee.
SECTION 3.05. MONEYS RECEIVED BY THE GUARANTEE TRUSTEE TO BE HELD IN
TRUST WITHOUT INTEREST. All moneys received by the Guarantee Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Guarantee Trustee shall be under no liability
for interest on any moneys received by it hereunder except such as it may agree
in writing to pay thereon.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. QUALIFICATIONS. There shall at all times be a Guarantee
Trustee that shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a national banking association or corporation organized and
doing business under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
clause (ii), the combined capital and surplus of such corporation shall
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be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i) and (ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02. If
the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE. (a) Subject to Section 4.02(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the Guarantee
Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office until
his successor shall have been appointed or until its removal or resignation.
(d) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that no such resignation of the Guarantee
Trustee shall be effective until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon after such notice, if any,
as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.01. GUARANTEE. To the extent set forth herein, the Guarantor
irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by the
Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
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SECTION 5.02. WAIVER OF NOTICE. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands. Notwithstanding anything to the
contrary herein, the Guarantor retains all of its rights under the Indenture to
extend the interest payment period on the Debentures and the Guarantor shall not
be obligated hereunder to make any Guarantee Payment during any Extended
Interest Payment Period (as defined in the Supplemental Indenture) with respect
to the Distributions on the Preferred Securities.
SECTION 5.03. OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for
payment of Distributions that result from any Extended Interest Payment
Period), Redemption Price, Liquidation Distribution (as defined in the
Declaration) or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of
Distributions that result from any Extended Interest Payment Period);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the
Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.03 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional
under any and all circumstances.
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There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. ENFORCEMENT OF GUARANTEE. The Guarantor and the Guarantee
Trustee expressly acknowledge that (i) this Guarantee Agreement will be
deposited with the Guarantee Trustee to be held for the benefit of the
Holders;(ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
exercising any trust or other power conferred upon the Guarantee Trustee under
this Guarantee Agreement; and (iv) if the Guarantee Trustee fails to enforce
this Guarantee Agreement as provided in clauses (ii) and (iii) above, any Holder
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder may directly institute a proceeding against the Guarantor for
enforcement of this Guarantee Agreement for such payment without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or any
other Person.
SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not merely of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments
in full (without duplication of amounts theretofore paid by the Issuer) or
upon the distribution of the Debentures to the Holders as provided in the
Declaration.
SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; PROVIDED, HOWEVER,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
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ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. LIMITATION OF TRANSACTIONS. So long as any Preferred
Securities remain outstanding, the Guarantor will not (x) declare or pay
dividends on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its capital stock (other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor,(b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto,(c) as a result of a
reclassification of the Guarantor's capital stock or the exchange or the
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock,(d) the payment of accrued
dividends and the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, or (e) purchases of the
Guarantor's common stock related to the issuance of the Guarantor's common stock
or rights under any of the Guarantor's benefit plans for its directors, officers
or employees, any of the Guarantor's dividend reinvestment plans or stock
purchase plans, or any of the benefit plans of any of the Guarantor's
Affiliates, for such Affiliate's directors, officers or employees), (y) make any
payment of principal or of interest or premium, if any, on or repay, repurchase
or redeem any debt security of the Company that ranks PARI PASSU with or junior
in interest to the Debentures or (z) make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any Subsidiary of the
Company (other than pursuant to this Guarantee Agreement or a substantially
similar guarantee agreement relating to a series of trust preferred securities
substantially similar to the Preferred Securities) if such guarantee ranks PARI
PASSU with or junior in interest to the Debentures, if at such time (i)the
Guarantor shall be in default with respect to its Guarantee Payments or other
payment obligations hereunder,(ii) there shall have occurred any event of
default under the Declaration or (iii) the Guarantor shall have given notice of
its election of an Extended Interest Payment Period and such period, or any
extension thereof, is continuing. In addition, so long as any Preferred
Securities remain outstanding, the Guarantor (i) will remain the sole direct or
indirect owner of all of the outstanding Common Securities and shall not cause
or permit the Common Securities to be transferred except to the extent such
transfer is permitted under Section 9.01 of the Declaration; PROVIDED that any
permitted successor of the Guarantor under the Indenture may succeed to the
Guarantor's ownership of the Common Securities and (ii) will use reasonable
efforts to cause the Issuer to continue to be treated as a grantor trust for
United States federal income tax purposes except in connection with a
distribution of Debentures as provided in the Declaration.
SECTION 6.02. SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made PARI PASSU or
subordinate by their terms, and (ii) senior to all capital stock (other than
the most senior preferred stock issued, from time to time, if any, by the
Guarantor, which preferred stock will rank PARI PASSU with this Guarantee
Agreement) now or hereafter issued by the Guarantor and to any guarantee now
or hereafter entered into by the Guarantor in respect of any of its capital
stock (other than the most senior preferred stock issued, from time to time,
if any, by the Guarantor). The Guarantor's obligations under this Guarantee
Agreement will rank PARI PASSU with respect to obligations under
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other guarantee agreements which it may enter into from time to time to the
extent that (i) such agreements shall be entered into in substantially the
form hereof and provide for comparable guarantees by the Guarantor of payment
on preferred securities issued by other trusts, partnerships or other
entities affiliated with the Guarantor that are financing vehicles of the
Guarantor and (ii) the debentures or other evidences of indebtedness of the
Guarantor relating to such preferred securities are junior subordinated,
unsecured indebtedness of the Guarantor.
ARTICLE 7
TERMINATION
SECTION 7.01. TERMINATION. This Guarantee Agreement shall terminate and
be of no further force and effect (i) upon full payment of the Redemption Price
of all Preferred Securities, (ii) upon the distribution of Debentures to Holders
and holders of Common Securities in exchange for all of the Preferred Securities
and Common Securities, (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer or (iv) upon the
distribution, if any, of Common Stock to Holders in respect of the conversion of
all such Holders' Preferred Securities into Common Stock. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or under this
Guarantee Agreement.
ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. EXCULPATION. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Holder for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Guarantee Agreement and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Guarantee Agreement or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.02. INDEMNIFICATION. To the fullest extent permitted by
applicable law, the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Guarantee Agreement and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified
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Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
SECTION 8.03. SURVIVE TERMINATION. The provisions of Sections 8.01
and 8.02 shall survive the termination of this Guarantee Agreement or the
resignation or removal of the Guarantee Trustee.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture, the Guarantor shall not assign its obligations
hereunder.
SECTION 9.02. AMENDMENTS. Except with respect to any changes which do
not adversely affect the rights of Holders in any material respect (in which
case no consent of Holders will be required), this Guarantee Agreement may only
be amended with the prior approval of the Guarantor and the Holders of not less
than a Majority in liquidation amount of the Preferred Securities. The
provisions of Section 12.02 of the Declaration concerning meetings of Holders
shall apply to the giving of such approval.
SECTION 9.03. NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Holders:
Pogo Producing Company
5 Greenway Plaza
Suite 2700
Houston, Texas 77046
Facsimile No.: (713) 297-5100
Attention: Corporate Secretary
(b) if given to the Guarantee Trustee, to the address set forth below
or such other address as the Guarantee Trustee may give notice of to the
Holders:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19810
Attention: Corporate Trust Administration
Telecopy: (617) 664-5739
15
<PAGE>
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.04. GENDERS. The masculine, feminine and neuter genders
used herein shall include the masculine, feminine and neuter genders.
SECTION 9.05. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and subject to Section 3.01(a) is not separately
transferable from the Preferred Securities.
SECTION 9.06. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS). THE GUARANTOR
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF
NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTEE, AND THE GUARANTOR IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED BY ANY SUCH COURT.
SECTION 9.07. COUNTERPARTS. This Guarantee Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
SECTION 9.08. LIMITED LIABILITY. The Holders, in their capacities as
such, shall not be personally liable for any liabilities or obligations of the
Guarantor arising out of this Guarantee Agreement, and the parties hereby agree
that the Holders, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to the stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
16
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
POGO PRODUCING COMPANY
By:
-----------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Guarantee Trustee
By:
-----------------------------
Name:
Title:
17
<PAGE>
WASHINGTON
AUSTIN BAKER & BOTTS
DALLAS L.L.P.
NEW YORK ONE SHELL PLAZA
MOSCOW 910 LOUISIANA TELEPHONE: (713) 229-1234
LONDON HOUSTON, TEXAS 77002-4995 FACSIMILE: (713) 229-1522
BAKU
004241.0280 May 27, 1999
Pogo Producing Company
5 Greenway Plaza, Suite 2700
Houston, Texas 77046
Ladies and Gentlemen:
We have acted as counsel to Pogo Producing Company, a Delaware
corporation ("Pogo Producing"), and Pogo Trust I and Pogo Trust II, each of
which is a Delaware statutory business trust (collectively, the "Trusts"),
relating to the registration of (i) $250,000,000 aggregate principal amount of
Junior Subordinated Debt Securities of Pogo Producing and (ii) $250,000,000
aggregate liquidation amount of preferred securities of the Trusts. In that
connection, reference is made to the registration statement under the Securities
Act of 1933, as amended, of Pogo Producing and the Trusts on Form S-3
(Registration Nos. 333-75105, 333-75105-01, and 333-75105-02) filed with the
Securities and Exchange Commission (the "Commission") on March 26, 1999, as
amended by Pre-Effective Amendment No. 1 thereto filed with the Commission on
May 3, 1999 and Pre-Effective Amendment No. 2 thereto filed with the Commission
on May 10, 1999 and declared effective by the Commission on May 13, 1999 (as
amended, the "Registration Statement"), including a prospectus dated May 13,
1999 (the "Prospectus"), and a prospectus supplement dated May 26, 1999 (the
"Prospectus Supplement") describing the 6 1/2% Cumulative Quarterly Income
Convertible Preferred Securities, Series A of Pogo Trust I (the "Preferred
Securities") and the 6 1/2% Junior Subordinated Debentures, Series A due 2029 of
Pogo Producing (the "Junior Subordinated Debentures"). Capitalized terms not
otherwise defined herein shall have the meaning specified in the Prospectus and
the Prospectus Supplement.
We have examined the Prospectus, the Prospectus Supplement, and such
other documents and corporate records as we have deemed necessary or appropriate
for purposes of this opinion. In addition, we have assumed that the Junior
Subordinated Debentures and the Preferred Securities will be issued in
accordance with the operative documents described in the Prospectus and the
Prospectus Supplement.
Based on the assumptions contained therein, the statements of legal
conclusion set forth under the heading "Federal Income Tax Consequences" in the
Prospectus Supplement reflect our opinions on the material United States federal
income tax consequences of the ownership and disposition of the Preferred
Securities.
<PAGE>
Pogo Producing company -2- May 27,1999
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this Firm in the section
captioned "Federal Income Tax Consequences" in the Prospectus Supplement. In
giving this consent, we do not thereby admit that we come within the category of
a person whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Commission thereunder.
Very truly yours,
BAKER & BOTTS, L.L.P.
By: /s/ Stuart F. Schaffer
---------------------------------
Stuart F. Schaffer
SFS:3301
