<PAGE>
As Filed With the Securities and Exchange Commission on May 4, 2000
Registration No. 333-30344
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HANOVER COMPRESSOR COMPANY
(Exact Name of Registrant as Specified in its Charter)
Delaware 76-0625124
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
12001 North Houston Rosslyn
Houston, Texas 77086
(281) 447-8787
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
HANOVER COMPRESSOR CAPITAL TRUST
(Exact Name of Registrant as Specified in its Charter)
Delaware Applied For
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
12001 North Houston Rosslyn
Houston, Texas 77086
(281) 447-8787
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
Michael J. McGhan
President and Chief Executive Officer
Hanover Compressor Company
12001 North Houston Rosslyn
Houston, Texas 77086
(281) 447-8787
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
----------------
COPY TO:
Richard S. Meller, Esq.
Latham & Watkins
233 South Wacker Drive
Suite 5800
Chicago, Illinois 60606
(312) 876-7700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
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<PAGE>
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
Calculation of Registration Fee
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<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum Amount of
Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered Per Security Offering Price Fee
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<S> <C> <C> <C> <C>
7 1/4% Convertible
Preferred Securities... 1,725,000 $50.00(1)(2) $86,250,000(1)(2) $22,770(1)
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Convertible Junior
Subordinated Debentures
due 2029 of Hanover
Compressor Company..... (3) -- -- --
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Common Stock, par value
$.001 per share, of
Hanover Compressor
Company................ 2,412,585(4) -- -- --
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Common Stock, par value
$.001 per share, of
Hanover Compressor
Company................ 173,268(5) $59.40625(6) $10,293,202 $2,718(6)
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Preferred Securities
Guarantee(7)........... -- -- -- --
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Total................. $25,488(8)
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) of the Securities Act, as amended, based upon
the average of the high and low prices on February 10, 2000.
(2) Exclusive of accrued interest and distributions, if any.
(3) $86,250,000 in aggregate principal amount of Convertible Junior
Subordinated Debentures due 2029 (the "debentures") of Hanover Compressor
Company (the "Company") were issued and sold to Hanover Compressor Company
Capital Trust (the "Trust") in connection with the issuance by the Trust
of 1,725,000 of its 7 1/4% Convertible Preferred Securities (the
"preferred securities"). The debentures may be distributed, under certain
circumstances, to the holders of the preferred securities for no
additional consideration.
(4) Such number of shares of Common Stock, par value $.001 per share, of the
Company (the "common stock") as are initially issuable upon conversion of
the preferred securities or the debentures registered hereunder for no
additional consideration. This Registration Statement also covers such
shares of common stock as may be issuable pursuant to anti-dilution
adjustments.
(5) This number represents shares of common stock being offered by one of our
stockholders.
(6) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) of the Securities Act, as amended, based upon
the average of the high and low trading prices reported in the
consolidated trading system on May 1, 2000. This amount is being paid
concurrent with the filing of this amendment.
(7) Includes the rights of holders of the preferred securities under the
preferred securities guarantee agreement between Hanover Compressor
Company and Wilmington Trust Company, as guarantee trustee (the
"guarantee"). No separate consideration will be received for the
guarantee.
(8) Of this amount, $22,770 was paid concurrently with the initial filing of
this Registration Statement on February 14, 2000, and $2,718 is being paid
concurrently with the filing of this amendment.
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. The +
+selling holders may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This prospectus is not an offer to sell these securities, and it is not +
+soliciting an offer to buy these securities, in any state where the offer or +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 4, 2000
PROSPECTUS
1,725,000 Convertible Preferred Securities
Hanover Compressor Capital Trust
7 1/4% Convertible Preferred Securities
(liquidation amount $50 per Convertible Preferred Security)
guaranteed by, and convertible into Common Stock of,
[LOGO OF HANOVER COMPRESSOR COMPANY APPEARS HERE]
Hanover Compressor Company
-----------
The Selling Holders may offer, from time to time:
. 7 1/4% Convertible Preferred Securities of Hanover Compressor Capital
Trust
. Convertible Junior Subordinated Debentures due 2029 of Hanover Compressor
Company
. shares of common stock of Hanover Compressor Company
Hanover Compressor Capital Trust is a Delaware business trust. The 7 1/4%
convertible preferred securities represent undivided beneficial ownership
interests in the assets of Hanover Compressor Capital Trust.
The Selling Holders may sell these securities from time to time directly to
purchasers or through agents, underwriters or dealers. If required, the names
of any other Selling Holders, agents or underwriters involved in the sale of
these securities and the applicable agent's commission, dealer's purchase price
or underwriter's discount, if any, will be set forth in a supplement to this
prospectus. We will not receive any proceeds from the sale of these securities.
In addition, this prospectus relates to the offering by one of our
stockholders of up to 173,268 shares of our common stock acquired in private
placement transactions. As part of these transactions, we granted this
stockholder the right to include resales of his shares in this prospectus. We
will not receive any proceeds from the sale of the common stock by this
stockholder.
YOU SHOULD CAREFULLY CONSIDER MATTERS DISCUSSED UNDER THE CAPTION "RISK
FACTORS" BEGINNING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is May , 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus.................. i
Where You Can Find More Information.... ii
Cautionary Statement About Forward-
Looking Statements.................... ii
The Company............................ 1
Risk Factors........................... 3
Use of Proceeds........................ 9
Accounting Treatment................... 9
Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Dividends................... 9
Hanover Compressor Capital Trust....... 10
Description of Preferred Securities.... 11
Description of Debentures.............. 28
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Description of Guarantee....................................................... 37
Relationship Among the Preferred Securities, the Debentures and the Guarantee.. 40
Description of Hanover Capital Stock........................................... 42
Federal Income Tax Consequences................................................ 44
Certain Erisa Considerations................................................... 49
Registration Rights............................................................ 51
Selling Holders................................................................ 52
Plan of Distribution........................................................... 54
Legal Matters.................................................................. 55
Experts........................................................................ 55
</TABLE>
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As used in this prospectus, (a) the "indenture" means the Indenture between
Hanover Compressor Company and Wilmington Trust Company, as trustee (the
"debenture trustee") relating to the debentures, (b) the "declaration" means
the Amended and Restated Declaration of Trust relating to the trust among
Hanover Compressor Company, as depositor (the "depositor"), Wilmington Trust
Company, as property trustee (the "property trustee"), Wilmington Trust
Company, as Delaware trustee (the "Delaware trustee"), the individuals named as
administrative trustees therein (the "administrative trustees" and collectively
with the property trustee and the Delaware trustee, the "trustees") and the
holders from time to time of undivided beneficial interests in the assets of
the trust, (c) the "guarantee" means the Preferred Securities Guarantee
Agreement between Hanover Compressor Company and Wilmington Trust Company, as
guarantee trustee (the "guarantee trustee"), (d) the "preferred securities"
means the 7 1/4% Convertible Preferred Securities issued by Hanover Compressor
Capital Trust, (e) the "common securities" means the common securities issued
by the trust, (f) the "trust securities" means the Preferred Securities and the
common securities, (g) the "common stock" means the common stock of Hanover
Compressor Company, par value $.001 per share, and (h) the "debentures" means
the Convertible Junior Subordinated Debentures due 2029 issued by Hanover
Compressor Company.
ABOUT THIS PROSPECTUS
This prospectus contains summaries, believed to be accurate in all material
respects, of terms of certain agreements. These summaries are qualified in
their entirety by reference to the actual agreements, copies of which will be
made available to you upon request to us. While any preferred securities,
debentures or common stock issued upon conversion of such securities remain
outstanding, we will make available, upon request, to any holder and any
prospective purchaser of such securities the information required pursuant to
Rule 144A(d)(4) under the Securities Act during any period in which we are not
subject to Section 13 or 15(d) of the Exchange Act.
No separate financial statements of the trust have been included herein. We
do not consider such financial statements material to the holders of preferred
securities because:
. we own, directly or indirectly, all of the voting securities of the
trust, and we are subject to the reporting requirements under the
Exchange Act;
i
<PAGE>
. the trust has no independent operations but exists for the sole purpose
of issuing securities representing undivided beneficial interests in the
assets of the trust and investing the proceeds thereof in debentures
issued by us; and
. the obligations of the trust under the trust securities are fully and
unconditionally guaranteed by us to the extent that the trust has funds
available to meet such obligations.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. These filings include
previous filings made by our predecessor, which was also called "Hanover
Compressor Company." You may also read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the SEC located at 7 World Trade Center, Suite
1300, New York, New York 10048 and at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. You may obtain information on the operation of the
SEC's public reference room in Washington, D.C. by calling the SEC at 1-800-
SEC-0330. We also file information with The New York Stock Exchange. These
reports, proxy statements and other information may be read and copied at 20
Broad Street, New York, New York 10005.
In this prospectus we have incorporated by reference certain reports and
other information we and our predecessor have filed, or will file, with the
SEC. The information incorporated by reference is an important part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference our Annual
Report on Form 10-K for the year ended December 31, 1999 and any further
filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act until all of the securities are sold or this offering is
terminated.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Hanover Compressor Company
12001 North Houston Rosslyn
Houston, Texas 77086
Attention: Corporate Secretary
(281) 447-8787
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front of those documents.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
Certain matters discussed in this prospectus are "forward-looking
statements" intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can generally be identified as such because the
context of the statement will include words such as "believes", "anticipates",
"expects", "estimates" or words of similar import. Similarly, statements that
describe our future plans, objectives or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risks and
uncertainties which could cause actual results to differ materially from those
anticipated as of the date of this prospectus. The risks and uncertainties
include:
ii
<PAGE>
. the loss of market share through competition;
. the introduction of competing technologies by other companies;
. a prolonged substantial reduction in oil and gas prices which would cause
a decline in the demand for our compression and oil and gas production
equipment;
. new governmental safety, health and environmental regulations which could
require us to make significant capital expenditures; and
. changes in economic or political conditions in the countries in which we
operate.
The forward-looking statements included herein are only made as of the date
of this prospectus and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
iii
<PAGE>
THE COMPANY
The information provided in this prospectus gives effect to a restructuring
of Hanover Compressor Company that was effected on December 9, 1999 (the
"Restructuring"). The sole purpose of the Restructuring was to create a holding
company, and the Restructuring will have no effect on our business. As a result
of the Restructuring, "old" Hanover Compressor Company was renamed Hanover
Compression Inc. ("HCI") and became a wholly-owned subsidiary of a newly
created holding company called Hanover Compressor Company. Each share of HCI
was exchanged for one share of "new" Hanover Compressor Company, which replaced
"old" Hanover Compressor Company as the publicly held company whose stock is
traded on the New York Stock Exchange. Financial and other information
discussed in this prospectus for periods prior to the Restructuring relates to
HCI and its subsidiaries. Except as described in the previous sentence and
unless the context requires otherwise, "Hanover," "we," "us," "our" or similar
terms in this prospectus refer to "new" Hanover Compressor Company and its
subsidiaries and not the trust.
We are a leading provider of a broad array of natural gas compression
services in the United States and select international markets. We operate the
largest compressor rental fleet, in terms of horsepower, in the gas compression
industry and provide our services on a rental, contract compression,
maintenance and acquisition leaseback basis. Our customers include independent
and major producers and distributors of natural gas throughout the Western
Hemisphere. Our products and services are essential to the production,
transportation, processing and storage of natural gas. Founded in 1990 and
publicly held since 1997, we are the largest public company whose primary focus
is in the natural gas compression business. Our compression services are
complemented by our compressor and oil and gas production equipment fabrication
operations, which broaden our customer relationships both domestically and
internationally.
Through internal growth and a series of strategic acquisitions, we have
become the largest operator of rental compression horsepower capacity in the
United States, serving an estimated 28% of the domestic rental market. We began
international operations in 1995 and have become one of the largest providers
of compression services in the rapidly growing Latin American and Canadian
markets. As of December 31, 1999, our compression rental fleet included the
following:
<TABLE>
<CAPTION>
Units Horsepower
----- ----------
<S> <C> <C>
U.S. .................................................... 3,608 1,181,000
International............................................ 290 277,000
----- ---------
Total Fleet............................................ 3,898 1,458,000
===== =========
</TABLE>
In addition to our business of providing natural gas compression services,
we also fabricate gas compressors for sale to third parties and for inclusion
in our rental fleet. We were the second largest fabricator of natural gas
compressors (by horsepower) in North America in 1999.
Complementing our gas compression businesses is our oil and gas production
equipment fabrication business. Oil and gas production equipment is typically
installed at the wellhead immediately before beginning large-scale production
and remains at the site for the life of the well. We fabricate equipment used
by oil and gas producers to separate and treat oil and gas immediately after it
is produced in order to facilitate further processing, transportation and sale.
Industry Overview
We compete primarily in the transportable natural gas compression market for
units of up to 4,400 horsepower. We believe that aggregate domestic natural gas
compression horsepower grew from approximately 8.8 million horsepower at the
end of 1992 to approximately 14.9 million horsepower at the end of 1999,
reflecting a compound annual growth rate of 8%. We believe that the domestic
gas compression market will continue to grow due to increasing consumption of
natural gas, continued aging of the natural gas reserve base and the attendant
decline of wellhead pressures and the discovery of new reserves.
1
<PAGE>
We believe that the rental portion of the domestic gas compression market
grew from approximately 1.8 million horsepower at the end of 1992 to
approximately 4.7 million horsepower at the end of 1998, reflecting a compound
annual growth rate of 15%. We believe that the growth in rental compression
capacity in the U.S. has been driven primarily by an increasing trend toward
outsourcing by energy producers and processors. Internationally, we believe
that similar growth opportunities for compressor rental and sales exist due to
anticipated increases in energy consumption worldwide, new international
environmental and conservation laws and increased outsourcing by energy
producers and processors. As worldwide gas consumption continues to grow, we
believe that there will also be a continued demand for the purchase and sale of
gas compression units.
The oil and gas production equipment industry is more sensitive than the gas
compression industry to the volatility of oil and natural gas prices,
indicating that the growth of this industry will more closely track the growth
of oil and gas production.
Growth Strategy
Our business strategy is to continue building on our reputation as the
premier operating company in natural gas compression and to grow the rental
fleet in accordance with a proven growth strategy. Our aggressive growth
strategy has generated the following results:
. aggregate horsepower capacity of our compressor rental fleet grew from
117,000 horsepower in 1992 to 1,458,000 horsepower in 1999;
. we maintained average horsepower utilization of approximately 93% from
1994 to 1999, compared to the average industry utilization which we
estimate to be approximately 83%;
. revenues increased from $33.1 million in 1992 to $317.0 million in 1999;
. earnings before interest, leasing expense, taxes, and depreciation and
amortization ("EBITDA") increased from $7.3 million in 1992 to $132.0
million in 1999; and
. net income grew from $1.0 million in 1992 to $40.4 million in 1999.
We intend to build on our results to date by continuing to pursue our growth
strategy, which includes the following key elements:
. delivering a comprehensive range of compression products and services;
. focusing on higher horsepower compression units;
. expanding our international operations;
. broadening our customer base by acquiring compressors from, and leasing
them back to, our customers;
. participating in the consolidation of the compression industry;
. acquiring other companies having assets or businesses which complement
ours;
. capitalizing on our decentralized management and operating structure to
provide superior customer service; and
. using equity incentives to attract and retain an experienced,
entrepreneurial, highly motivated management team.
We believe the successful execution of our growth strategy, combined with
our focus on and leadership position in the compression industry, will enable
us to continue to generate and realize significant growth opportunities.
Our principal executive office is located at 12001 North Houston Rosslyn,
Houston, Texas 77086, telephone (281) 447-8787.
2
<PAGE>
RISK FACTORS
An investment in the preferred securities involves risks. You should
carefully consider and evaluate all of the information in this prospectus,
including the following risk factors, before investing.
Risks Relating to Hanover
Industry Conditions--A prolonged, substantial reduction in oil or gas prices
could adversely affect our business.
Our operations depend upon the levels of activity in natural gas
development, production, processing and transportation. In recent years, oil
and gas prices and the level of drilling and exploration activity have been
extremely volatile. For example, from mid-1998 to mid-1999, oil and gas
exploration and development activity and the number of well completions
declined due to a significant reduction in oil and gas prices. As a result, the
demand for our gas compression and oil and gas production equipment was
adversely affected. Any future significant, prolonged decline in oil and gas
prices could have a material adverse effect on our business, results of
operations and financial condition.
Short Lease Terms--Our compressor leases have short initial terms, and we
cannot be sure that the compressors will stay out on location after the end
of the initial lease term.
The length of our leases varies based on operating conditions and customer
needs. In most cases, under currently prevailing lease rates, the initial lease
terms are not long enough to enable us to fully recoup the average cost of
acquiring or manufacturing the compressors. We cannot assure you that a
substantial number of our lessees will continue to renew their leases or that
we will be able to re-lease the compressors to new customers or that any
renewals or re-leases will be at comparable lease rates. An inability to renew
or re-lease a substantial portion of our compressor rental fleet would have a
material adverse effect upon our business, results of operations and financial
condition.
Substantial Capital Requirements--We require a substantial amount of capital
to expand our compressor rental fleet and our complementary businesses.
We will continue to make substantial capital investments to expand our
compressor rental fleet and our complementary businesses. We invested
approximately $318 million in capital expenditures in 1999, and we expect to
invest approximately $250 million in capital expenditures in 2000. The amount
of these expenditures may vary depending on the rate of return we expect to
earn from these investments, conditions in the natural gas industry and whether
we make any significant acquisitions. Historically, we have funded these
investments through internally generated funds, debt and sale and leaseback
transactions and equity financing. While we believe that cash flow from our
operations and borrowings under HCI's existing $200 million bank credit
facility will provide us with sufficient cash to fund these investments, we
cannot assure you that these sources will be sufficient. HCI would need the
consent of the lenders under its bank credit facility and the lessors under its
sale and leaseback transactions to complete any new financing. Failure to
generate sufficient cash flow, together with the absence of alternative sources
of capital, could have a material adverse effect on our growth, results of
operations and financial condition.
International Operations--There are many risks associated with conducting
operations in international markets.
We operate in many different geographic markets, some of which are outside
the United States. Changes in local economic or political conditions,
particularly in Latin America or Canada, could have a material adverse effect
on our business, financial condition and results of operations. Additional
risks inherent in our international business activities include the following:
. difficulties in managing international operations;
3
<PAGE>
. unexpected changes in regulatory requirements;
. tariffs and other trade barriers which may restrict our ability to enter
into new markets;
. potentially adverse tax consequences;
. restrictions on repatriation of earnings;
. the burden of complying with foreign laws; and
. fluctuations in currency exchange rates and the value of the U.S. dollar.
Acquisition Strategy--We may not be able to find suitable acquisition
candidates or successfully integrate acquired companies into our business.
As part of our business strategy, we will continue to pursue the acquisition
of other companies, assets and product lines that either complement or expand
our business. Each acquisition involves potential risks, such as the diversion
of management's attention away from current operations, problems in integrating
acquired businesses and possible short-term adverse effects on our operations
as a result of that process. We routinely conduct preliminary discussions with
other companies, which have operations or assets that may be suitable for us to
acquire. Given our selective approach to acquisitions, we are unable to predict
whether or when we will find suitable acquisition candidates or whether we will
be able to complete a material acquisition. We may seek to finance acquisitions
with cash or through the issuance of new debt and/or equity securities. A
relatively large acquisition in which cash is the primary form of consideration
would utilize a substantial portion of our existing financial resources. As the
compression industry continues to consolidate, the size of the companies we may
consider acquiring may become larger and, as a result, the general risks
inherent in acquisitions described above may become more significant.
Competition--We operate in a highly competitive industry and compete against
many larger companies with greater financial resources.
We compete with several large national and multinational companies which
provide compression services to third parties, many of which have greater
financial and other resources than we do. If our competitors were to
substantially increase the resources they devote to the development and
marketing of competitive products and services, we cannot assure you that we
will have sufficient resources to respond accordingly.
Concentrated Ownership--A significant amount of our stock is owned by one
stockholder.
Our largest stockholder, GKH Partners, L.P. ("GKH"), controlled
approximately 40% of our voting power as of December 31, 1999. GKH is in a
position to exert substantial influence over the outcome of most corporate
actions requiring stockholder approval, including the election of directors,
the future issuance by Hanover of common stock or other securities, and the
approval of transactions involving a change of control. The interests of GKH
could conflict with the interests of our other stockholders.
Anti-Takeover Provisions--Our certificate of incorporation and by-laws
contain certain provisions that could make a takeover more difficult.
Certain provisions of our certificate of incorporation and by-laws could
make it more difficult for a third party to acquire control of Hanover, even if
such a change in control would benefit our stockholders. Our certificate of
incorporation allows us to issue preferred stock without stockholder approval
and our by-laws limit who may call special stockholder meetings. These
provisions could make it more difficult for a third party to acquire us and may
discourage acquisition bids or limit the price that investors might be willing
to pay in the future for shares of our common stock. The ownership of a
substantial number of our shares of common stock by GKH and our officers,
directors, employees and their affiliates also could discourage acquisition
bids. There are also provisions of Delaware law that could delay or make
difficult a merger, tender offer or proxy contest. Please read the "Description
of Hanover Capital Stock" section of this prospectus.
4
<PAGE>
Potential Liability and Insurance--Natural gas operations entail inherent
risks that may result in substantial liability to Hanover.
Natural gas operations entail inherent risks, including equipment defects,
malfunctions, failures and natural disasters which could result in
uncontrollable flows of gas or well fluids, fires and explosions. These risks
may expose us to liability for personal injury, wrongful death, property
damage, pollution and other environmental damage. We have obtained insurance
against liability for personal injury, wrongful death and property damage, but
we cannot assure you that the insurance will be adequate to cover our
liability. Similarly, we cannot assure you that we will be able to obtain
insurance in the future at a reasonable cost or at all. Our business, results
of operations and financial condition could be adversely affected if we incur
substantial liability and the damages are not covered by insurance or are in
excess of policy limits.
Governmental Regulation--Our business is subject to a variety of governmental
regulations relating to environmental, health and safety.
Our business is subject to a variety of federal, state and local laws and
regulations relating to safety, health and the environment. These laws and
regulations are complex, change frequently and have tended to become more
stringent over time. Failure to comply with these laws and regulations may
result in a variety of civil and criminal enforcement measures, including
assessment of monetary penalties, imposition of remedial requirements, and
issuance of injunctions as to future compliance. As part of the regular overall
evaluation of our current operations, we are updating certain facility permits
with respect to stormwater discharges and air emissions but do not believe such
updates will have a material adverse effect on our operations as a result of
any enforcement measures or capital costs. Based on our experience to date, we
believe that the future cost of compliance with existing laws and regulations
and the future cost of necessary investigation or remediation of contamination
will not have a material adverse effect on our business, financial condition
and results of operations. However, future events, such as discovery of unknown
contamination, any third party claims made with respect to previously owned or
leased properties, compliance with more stringent laws and regulations or more
vigorous enforcement policies by regulatory agencies or stricter or different
interpretations of existing laws and regulations could require us to make
material expenditures.
We have conducted preliminary environmental site assessments with respect to
certain properties currently owned or leased by us. Some of these assessments
have revealed that soils and/or groundwater at some of our facilities are
contaminated with hydrocarbons and various other regulated substances. We do
not believe that our operations caused any such contamination and are not
currently under any orders or directives to undertake any remedial activity. In
addition, we have previously owned or leased certain properties that had in the
past experienced soil contamination. We have since conducted remedial
operations at certain of these previously held properties as we believed
necessary and either sold the owned properties to third parties or returned the
leased properties to the lessors. We are not currently aware of any further
remedial obligations at such previously held properties. We cannot be certain,
however, that we will not be required to undertake any remedial activities
involving any substantial costs on any of these properties in the future.
Shares Eligible for Future Sale--The market price of our common stock could
be depressed by future sales.
Future sales of our common stock, or the perception that these sales could
occur, could adversely affect the market price of our common stock. We cannot
assure you as to when, and how many of, the shares of our common stock will be
sold and the effect those sales may have on the market price of our common
stock. Westar Capital, Inc., which we believe holds approximately 1.5 million
shares of our common stock, has publicly announced this it is reviewing
alternatives to monetize or liquidate these shares. In addition, we may issue
additional shares of common stock in connection with future acquisitions or
other transactions. Although those securities may be subject to regulatory or
contractual resale restrictions, as these restrictions lapse or if these shares
are registered for sale to the public, they may be sold to the public. In the
event we issue a substantial number of shares of our common stock, which
subsequently become available for unrestricted resale, there could be a
material adverse effect on the prevailing market price for our common stock.
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Risks Relating to the Preferred Securities
Subordination--Our obligations under the guarantee and debentures are
subordinated.
Because of the subordinated nature of the guarantee and the debentures, we:
. will not be permitted to make any payments of principal, including
redemption payments, or interest on the debentures if we default on our
senior debt, as described under the "Description of Debentures--
Subordination" section of this prospectus;
. will not be permitted to make payments on the guarantee if we default on
any of our senior debt; and
. must pay all of our senior debt before we make payment on the guarantee
or the debentures if we become bankrupt, liquidate or dissolve.
The preferred securities, the guarantee, and the debentures do not limit our
ability or the ability of our subsidiaries to incur additional indebtedness,
including indebtedness that ranks senior to the debentures and the guarantee.
As of December 31, 1999 after giving effect to the Restructuring, Hanover had
no senior debt but had guaranteed approximately $62 million of HCI's
indebtedness under its bank credit agreement. In addition, Hanover has
guaranteed the residual value of the equipment under HCI's sale and lease back
transactions of approximately $333 million, which guarantee ranks senior to the
debentures.
Structural Subordination--The preferred securities and the debentures will be
effectively subordinated to the obligations of our subsidiaries.
We are a holding company and we conduct our operations entirely through our
subsidiaries. We have few assets of significance other than the capital stock
of HCI and our other subsidiaries. Consequently, we are dependent upon
dividends or other intercompany transfers of funds from our direct and indirect
subsidiaries to meet our debt service obligations, including those related to
the debentures, the guarantee and the preferred securities. Our subsidiaries
are separate legal entities that have no obligation to pay any amounts due
under the preferred securities, the debentures or the guarantee. Our
subsidiaries do not guarantee the payment of the preferred securities or the
debentures. Furthermore, our subsidiaries are not obligated to make funds
available to us, and creditors of our subsidiaries will have a superior claim
to our subsidiaries' assets. As a result, your right to receive payment on the
debentures and the preferred securities is effectively junior to our
subsidiaries' existing indebtedness and possibly to all of their future
borrowings. In addition, our subsidiaries' ability to make any payments to us
will depend on their earnings, the terms of their indebtedness, business and
tax considerations and legal restrictions.
Our subsidiaries are permitted to enter into various debt agreements that
restrict their ability to pay dividends, make advances or otherwise distribute
funds to us. We cannot assure you that HCI or any of our other subsidiaries
will be able to pay dividends or otherwise distribute funds to us in an amount
sufficient to pay the principal of or interest on the debentures. At December
31, 1999, after giving effect to the Restructuring, our subsidiaries had
approximately $7 million of debt.
Tax Consequences of Our Right to Defer Payments--Our right to defer interest
payments on the debentures has tax consequences for you.
We can, on one or more occasions, defer interest payments on the debentures
for up to 20 consecutive quarterly periods unless an event of default under the
indenture has occurred and is continuing. We cannot, however, defer interest
payments beyond the earlier of the maturity date of the debentures, which is
December 15, 2029, or the date on which the debentures are redeemed. If we
defer interest payments on the debentures, the trust will also defer
distributions on the preferred securities and the common securities. During a
deferral period, distributions will continue to accumulate on the preferred
securities.
If we defer payment of interest on the debentures, you will be required to
accrue interest income, as original issue discount, for the deferred interest
allocable to your share of preferred securities for United States
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federal income tax purposes. As a result, you will include that income in gross
income for United States federal income tax purposes prior to your receipt of
any cash distributions. In addition, you will not receive cash from the trust
related to that income if you sell your preferred securities prior to the
record date on which those distributions are made. You should consult with your
own tax advisor regarding the tax consequences of an investment in the
preferred securities.
Market Price Consequences of Our Right to Defer Payments--Our right to defer
interest payments on the debentures may affect the market price of the
preferred securities.
If we defer interest payments on the debentures in the future, the market
price of the preferred securities may not fully reflect the value of accrued
but unpaid interest on the debentures. If you sell preferred securities during
a deferral period, you may not receive the same return on investment as someone
who continues to hold preferred securities. In addition, our right to defer
interest payments on the debentures may mean that the market price for the
preferred securities will be more volatile than other securities that are not
subject to these rights.
The Guarantee is a Limited Guarantee--The guarantee only guarantees payments
on the preferred securities if the trust has cash available.
Our guarantee only applies to the extent that the trust has sufficient funds
to make the payments. If we fail to make payments on the debentures, the trust
will not be able to make the related distribution, redemption or liquidation
payments on the preferred securities. In those circumstances, you will not be
able to rely upon the guarantee for payments of those amounts.
Instead, if we are in default under the debentures you may:
. rely on the property trustee of the trust to enforce the trust's rights
under the debentures; or
. directly sue us or seek other remedies to collect your pro rata share of
payments owed.
Optional Redemption--We may cause the preferred securities to be redeemed on
or after December 20, 2002 without your consent.
At our option, we may redeem all or some of the debentures at any time on or
after December 20, 2002. The redemption price you would receive in such an
event may vary, but will not be less than 100% of the principal amount to be
redeemed plus any accrued and unpaid interest. Please read the "Description of
Debentures--Redemption--Optional Redemption" section of this prospectus. You
should assume that we will exercise our redemption option if we are able to
refinance the debentures at a lower interest rate or if it is otherwise in our
interest to redeem the debentures. If a redemption occurs, the trust will use
the cash it receives from the redemption of the debentures to redeem an
equivalent amount of preferred securities and common securities on a pro rata
basis.
Redemption Upon the Occurrence of a Tax Event--The trust may redeem the
preferred securities without your consent if specified tax changes occur.
If specified tax changes occur relating to the non-deductibility of interest
payments on the debentures and certain other conditions are met as are more
fully described under the "Description of Preferred Securities--Tax Event or
Investment Company Event Redemption or Distribution" section of this
prospectus, we may redeem all, but not less than all, of the debentures for the
principal amount of the debentures plus any accrued and unpaid interest on the
debentures. If this happens, the trust will use the cash it receives from the
redemption of the debentures to redeem the preferred securities and the common
securities.
Distribution of the Debentures--We may, at any time, dissolve the trust and
distribute the debentures to you which may have adverse tax and other
consequences for you.
We may dissolve the trust at any time. If we do so, the trust will, after
satisfaction of liabilities to creditors of the trust as required by applicable
law, redeem the preferred securities and the common securities by distributing
the debentures to you and to us, as holder of the common securities, on a pro
rata basis.
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Under current United States federal income tax laws, a distribution of
debentures on the dissolution of the trust would not be a taxable event to you.
Nevertheless, if the trust is classified for United States federal income tax
purposes as a corporation at the time it is dissolved, the distribution of the
debentures would be a taxable event to you. In addition, if there is a change
in law, a distribution of debentures on the dissolution of the trust could also
be a taxable event to you.
We have no current intention of dissolving the trust and causing the
distribution of the debentures. However, there are no restrictions on our
ability to do so. We anticipate that we would consider exercising this right if
expenses associated with maintaining the trust were substantially greater than
we currently expect.
We cannot predict the market prices for the debentures that may be
distributed. Accordingly, the debentures you receive on a distribution, or the
preferred securities you hold pending that distribution, may trade at a
discount to the price you paid to purchase the preferred securities.
Because you may receive debentures, you should make an investment decision
about the debentures in addition to the preferred securities. You should
carefully review all the information regarding the debentures contained in this
prospectus.
Lack of an Active Trading Market--We cannot assure you that an active trading
market for the preferred securities will develop.
There is no existing market for the preferred securities (or the debentures)
and there can be no assurance as to the liquidity of any markets that may
develop for the preferred securities (or the debentures), the ability of the
holders to sell their preferred securities (or debentures) or at what price
holders of the preferred securities (or the debentures) will be able to sell
such securities. Future trading prices of the preferred securities (and the
debentures) will depend on many factors including:
. prevailing interest rates;
. our common stock price;
. the Company's operating results; and
. the markets for similar securities.
The initial purchasers of the preferred securities, Credit Suisse First
Boston Corporation, Goldman Sachs & Co., Salomon Smith Barney, Inc. and Dain
Rauscher Incorporated, currently make a market for the preferred securities
offered hereby; however, the initial purchasers are not obligated to do so and
such market making activity is subject to the limits imposed by applicable law
and may be discontinued at any time without notice.
Limited Voting Rights--You will have limited voting rights as a holder of
preferred securities.
As a holder of preferred securities, you will have limited voting rights
relating only to the modification of the preferred securities and, in specified
circumstances, the exercise of the trust's rights as holder of the debentures
and the guarantee and the appointment of a special trustee. Except as described
in the preceding sentence, only we can replace or remove any of the trustees or
increase or decrease the number of trustees.
Payment of Dividends--We may not be able to pay dividends on the common stock
into which your preferred securities may be converted.
We have no obligation to pay dividends on the common stock into which your
preferred securities may be converted. The declaration and payment of dividends
on our common stock is subject to, and will depend upon, among other things:
. our future earnings and financial condition, liquidity and capital
requirements,
. our ability and the ability of HCI to pay dividends under HCI's bank
credit agreement,
. the general economic and regulatory climate and
. other factors deemed relevant by our board of directors.
Our guarantee of HCI's senior debt restricts our ability to pay cash
dividends on our common stock.
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USE OF PROCEEDS
The Selling Holders will receive all of the proceeds from the sale of the
securities offered by this prospectus. Neither the Company nor the Trust will
receive any of the proceeds from the sale of the securities offered by this
prospectus.
ACCOUNTING TREATMENT
For financial reporting purposes, we will treat the trust as a subsidiary
of Hanover, and accordingly, we will include the accounts of the trust in our
consolidated financial statements. We will present the Preferred Securities in
our consolidated balance sheet as a separate line item entitled "company-
obligated mandatorily redeemable convertible preferred securities." We will
also include appropriate disclosures about the Preferred Securities, the
guarantee and the debentures in the notes to our consolidated financial
statements. For financial reporting purposes, we will record distributions
payable on the Preferred Securities as a financing charge to earnings in our
consolidated statement of income.
RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED DIVIDENDS
The following table contains our consolidated ratios of earnings to fixed
charges for the periods indicated
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges................... 2.96 3.56 3.75 3.76 3.03
Ratio of earnings to combined fixed charges and
preferred dividends................................. 2.02 1.31 3.75 3.76 3.03
</TABLE>
For purposes of computing the ratios of earnings to fixed charges and
earnings to fixed charges plus dividends: (i) earnings consist of income
before income taxes plus fixed charges and (ii) "fixed charges" consist of
interest expense (including amortization of debt discount and expense),
leasing expense and the estimated interest factor attributable to rentals.
There was no preferred stock outstanding during 1997, 1998 or 1999.
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HANOVER COMPRESSOR CAPITAL TRUST
Hanover Compressor Capital Trust is a statutory business trust that was
formed under Delaware law on December 1, 1999. The trust's original declaration
of trust was amended and restated in its entirety as of December 15, 1999.
We own all of the trust's common securities. The common securities represent
common undivided beneficial interests in the assets of the trust with an
aggregate liquidation amount equal to at least 3% of the total capital of the
trust.
The trust exists for the exclusive purposes of:
. issuing the preferred securities;
. issuing the common securities to us;
. investing the gross proceeds of the sale of the preferred securities and
the common securities in the debentures;
. distributing payments received on the debentures to holders of the
preferred securities and the common securities; and
. engaging in only those other activities necessary or incidental to such
purposes.
The trust currently has five trustees. Three of those trustees, referred to
as administrative trustees, are our employees or officers. Wilmington Trust
Company serves as the trust's property trustee and as the trust's Delaware
trustee. In some circumstances, the holders of a majority of the preferred
securities will be entitled to appoint one additional trustee, referred to as a
special trustee, who does not need to be affiliated with us, who will have the
same rights, powers and privileges as the administrative trustees.
The property trustee, among other things:
. holds title to the debentures for the benefit of the holders of the
preferred securities and the common securities;
. has the power to exercise all rights, powers and privileges under the
indenture as the holder of the debentures; and
. maintains exclusive control of a segregated non-interest bearing bank
account, called the property account, to hold all payments made in
respect of the debentures for the benefit of the holders of the preferred
securities and the common securities.
Subject to the right of the holders of the preferred securities to appoint a
special trustee, we, as holder of all the common securities, have the right to
appoint, remove or replace any of the trustees and to increase or decrease the
number of trustees. However, the number of trustees is required to be at least
three, a majority of which will be administrative trustees.
We pay all fees and expenses related to the trust.
The rights of the holders of the preferred securities, including economic
rights, rights to information and voting rights, are as set forth in the
declaration and the Delaware Business Trust Act, as amended (the "Trust Act").
See "Description of Preferred Securities." The declaration, the indenture and
the guarantee also incorporate by reference the terms of the Trust Indenture
Act. It is expected that, at the time this registration statement becomes
effective, the declaration, the indenture and the guarantee will be qualified
under the Trust Indenture Act.
The address of the principal office of the trust is c/o Hanover Compressor
Company, 12001 N. Houston Rosslyn, Houston, Texas 77086, and its telephone
number is (281) 447-8787.
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DESCRIPTION OF PREFERRED SECURITIES
The trust issued the preferred securities pursuant to the terms of the
declaration of trust. The declaration of trust will be qualified under the
Trust Indenture Act and incorporates selected provisions of the Trust Indenture
Act. We have summarized selected provisions of the declaration of trust and the
preferred securities below. This summary is not complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the
declaration of trust. A copy of the declaration of trust is available upon
request. Unless the context requires otherwise, "Hanover," "we," "us," "our"
and similar terms in this section refer solely to Hanover Compressor Company
after giving effect to the Restructuring and not the trust or any of our other
consolidated subsidiaries.
General
The declaration of trust authorizes the trust to issue the Preferred
Securities and the common securities. The preferred securities represent
preferred undivided beneficial ownership interests in the assets of the trust.
The common securities represent common undivided beneficial ownership interests
in the assets of the trust. Payments on the preferred securities will be made
pro rata with payments on the common securities, except as described under
"--Subordination of Common Securities." Under a guarantee agreement we
guarantee, on a subordinated basis, any payments required to be made by the
trust to the holders of the preferred securities but only to the extent that the
trust has funds on hand available to make the payments. Please read the
"Description of Guarantee" section of this prospectus.
Distributions
If you purchase preferred securities you will be entitled to receive cash
distributions at an annual rate of 7 1/4% of the $50 stated liquidation amount
per each preferred securities. Distributions are cumulative and will begin to
accumulate on the date of original issuance of the preferred securities.
Distributions will be payable quarterly in arrears March 15, June 15, September
15 and December 15, of each year beginning March 15, 2000, to the person in
whose name each of the preferred securities is registered, subject to certain
exceptions, at the close of business on the first day of the month of the
applicable distribution date.
The amount of distributions payable for any period will be computed on the
basis of the number of days elapsed in a 360-day year consisting of twelve 30-
day months. If a distribution date is not a business day, the trust will make
the distributions on the next day that is a business day, without any
additional distributions or other payments due to the delay.
Accrued distributions that are not paid on the applicable distribution date
will accrue additional distributions compounded quarterly from the relevant
distribution date. For the purpose of this prospectus, a "distribution" will
include quarterly distributions, additional distributions on quarterly
distributions not paid on the applicable distribution date, special
distributions (as described in the "Registration Rights" section of this
prospectus) and additional sums (as described in the "Description of
Debentures--Additional Sums" section of this prospectus), as applicable. A
"business day" is any day other than a Saturday or a Sunday, or a day on which
banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law or executive order to remain closed, or a day on
which the corporate trust office of the property trustee or the debenture
trustee is closed for business.
Option to Defer Distributions
We can, on one or more occasions, defer interest payments on the debentures
for up to 20 consecutive quarterly periods unless an event of default under the
indenture has occurred and is continuing. Interest payments will not be due and
payable on the debentures during a deferral period. We cannot, however, defer
interest payments beyond the earlier of the maturity date of the debentures,
which is December 15, 2029, or the date the debentures are redeemed.
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If we defer interest payments on the debentures, the trust will defer
distribution payments on the preferred securities and the common securities.
Distributions will continue to accumulate on the preferred securities and the
common securities during a deferral period. Also, additional cash
distributions will accumulate on any deferred distributions at the annual rate
of 7 1/4%, compounded quarterly.
We do not currently intend to defer interest payments on the debentures.
We may extend a deferral period prior to the period's termination. However,
we may not extend a deferral period, including all previous and further
extensions of the period, beyond 20 consecutive quarterly interest periods or
the maturity date of the debentures. Once a deferral period ends and we make
all payments due on the debentures, we can commence a new deferral period.
Consequently, there could be multiple deferral periods of varying lengths
throughout the term of the debentures. Please read the "Federal Income Tax
Consequences--Interest Income and Original Issue Discount" section of this
prospectus.
Payment of Distributions
The trust must pay distributions on the preferred securities on the
distribution payment dates to the extent that the property trustee has cash on
hand to make distributions. The property trustee will maintain that cash in
the property account. The only funds the property trustee will have to
distribute to the holders of the preferred securities will be from payments
received on the debentures. If we do not make interest payments on the
debentures, the property trustee will not have funds available to make
distributions on the preferred securities. If and to the extent we make
interest payments on the debentures, the property trustee will be obligated to
make distributions on the preferred securities and the common securities on a
pro rata basis. We guarantee the payment of distributions and other payments
on the preferred securities on a subordinated basis, but only if, and to the
extent, we have made corresponding payments to the trust on the debentures
and, as a result, the property trustee has funds available to make
distributions on the preferred securities. Please read the "Description of the
Guarantee" section in this prospectus.
Conversion Rights
General
Holders of preferred securities may convert them into our common stock at
any time before the earlier of:
. the close of business on the business day immediately prior to the
maturity date of the debentures; or
. in the case of preferred securities called for redemption, the close of
business on the business day immediately prior to the redemption date.
Initially, each of the preferred securities is convertible, at the option
of the holder, into 1.3986 shares of our common stock. This conversion rate is
equivalent to a conversion price of $35.75 per share of our common stock. The
conversion rate and conversion price will be subject to adjustment as
described under the "--Conversion Price Adjustments" section of this
prospectus.
If you wish to exercise your conversion right, you must deliver an
irrevocable conversion notice, together, if the preferred securities are in
certificated form, with the certificated security, to the conversion agent who
will, on your behalf, exchange the preferred securities for a like amount of
debentures and immediately convert the debentures into shares of our common
stock. You may obtain copies of the required form of the conversion notice
from the conversion agent.
At the close of business on a distribution record date, you will be
entitled to receive the distribution payable on your preferred securities on
the corresponding distribution date even if you convert your preferred
securities after the distribution record date but prior to the distribution
date. Except as provided in the immediately preceding sentence, neither we nor
the trust will make, or be required to make, any payment, allowance or
adjustment for accrued and unpaid distributions, whether or not in arrears, on
converted preferred
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securities, even if you convert you preferred securities during a deferral
period. We will make no payment or allowance for distributions on our shares of
common stock issued upon conversion, except to the extent that those shares of
common stock are held of record on the record date for any distributions. We
will deem each conversion to have been effected immediately prior to the close
of business on the day on which the trust received the related conversion
notice.
We will not issue any fractional shares of our common stock as a result of a
conversion of preferred securities. We will pay cash in lieu of a fractional
share of common stock.
Conversion Price Adjustments--General.
The conversion price will be subject to adjustment for some events,
including:
. the payment of dividends or distributions payable in our common stock on
our common stock;
. the issuance of rights or warrants to all holders of our common stock;
. subdivisions and combinations of our common stock;
. the payment of dividends or distributions to all holders of our common
stock consisting of our indebtedness, securities or capital stock, cash
or assets, excluding any rights, warrants, dividends or distributions
referred to in the first two bullet points and dividends and
distributions paid exclusively in cash;
. the payment of dividends or other distributions on our common stock
exclusively in cash, excluding:
. cash dividends that do not exceed the per share amount of the
smallest of the four immediately preceding quarterly cash dividends
as adjusted to reflect any of the events referred to in the
proceeding bullet points; and
. cash dividends, if the annualized per share amount of the cash
dividends does not exceed 12.5% of the market price of our common
stock on the trading day immediately prior to the date of declaration
of the dividend; and
. payment to holders of our common stock in respect of a tender or exchange
offer, other than an odd-lot offer by us or any subsidiary of ours, for
our common stock at a price in excess of 110% of the market price of our
common stock as of the trading day next succeeding the last date tenders
or exchanges may be made in the tender or exchange offer.
We may, at our option, make other reductions in the conversion price that
our board of directors determines are advisable to avoid or diminish any income
tax to holders of our common stock resulting from any dividend or distribution
of stock or rights to acquire stock or from any event treated as such for
income tax purposes. Please read the "Federal Income Tax Consequences--
Adjustment of Conversion Price" section of this prospectus.
The conversion price will not be adjusted for the issuance of our common
stock (or securities convertible into or exchangeable for our common stock),
except as described above. For example, the conversion price will not be
adjusted upon the issuance of shares of our common stock
. under any present or future plan providing for the reinvestment of
dividends or interest payable on our securities;
. in connection with the investment of additional optional amounts in
shares of our common stock under any plan described in the preceding
bullet point;
. under any present or future employee benefit plan or program of ours; or
. pursuant to any option, warrant, right, or exercisable, exchangeable or
convertible security outstanding as of the date the preferred securities
were first issued.
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If any action would require adjustment of the conversion price under more
than one of the provisions described above, only one adjustment will be made
and that adjustment will be the amount of adjustment that has the highest
absolute value to holders of the preferred securities. An adjustment in the
conversion price will not be required unless the adjustment would require a
change of at least 1% in the conversion price then in effect.
However, any adjustment that would otherwise be required to be made will be
carried forward and taken into account in any subsequent adjustment.
Conversion Price Adjustments--Merger, Consolidation or Sale of Assets
If we are a party to any transaction, including a merger, consolidation,
sale of all or substantially all of our assets, recapitalization or
reclassification of our common stock or any compulsory share exchange, that
results in shares of our common stock being converted into the right to receive
other securities, cash or other property, then lawful provision will be made as
part of the terms of the transaction so that the holders of the preferred
securities will have the right to convert each Preferred Securities into:
. in the case of any transaction other than a transaction involving a
Common Stock Fundamental Change (as defined below), the kind and amount
of securities, cash or other property receivable upon the consummation of
the transaction by a holder of that number of shares of our common stock
into which a preferred securities was convertible immediately prior to
the transaction; or
. in the case of a transaction involving a Common Stock Fundamental Change,
common stock of the kind received by holders of our common stock.
In each case described in the foregoing bullet points, the conversion will
be made after giving effect to any adjustment discussed below relating to a
Fundamental Change if the transaction constitutes a Fundamental Change. The
holders of preferred securities will have no voting rights with respect to any
transaction described in this section.
If a Fundamental Change occurs, the conversion price in effect immediately
before the Fundamental Change will be adjusted as described below.
In the case of a Non-Stock Fundamental Change, the conversion price of the
preferred securities will be adjusted to become the lower of:
. the conversion price in effect immediately prior to the Non-Stock
Fundamental Change, but after giving effect to any other adjustments that
may be made pursuant to the first paragraph under the "--Conversion Price
Adjustments--General" section of this prospectus; and
. the result obtained by multiplying the greater of the Relevant Price (as
defined below) or the then applicable Reference Market Price (as defined
below) by the Optional Redemption Ratio (as defined below) (such product
shall be referred to as the "Adjusted Relevant Price" or the "Adjusted
Reference Market Price," as the case may be).
In the case of a Common Stock Fundamental Change, the conversion price of
the preferred securities in effect immediately before the Common Stock
Fundamental Change, but after giving effect to any other prior adjustments,
will thereupon be adjusted by multiplying the conversion price by a fraction of
which the numerator will be the Purchaser Stock Price (as defined below) and
the denominator will be the Relevant Price; provided, however, that in the
event of a Common Stock Fundamental Change in which:
. 100% of the value of the consideration received by a holder of our common
stock is common stock of the successor, acquiror or other third party
(and cash, if any, is paid only with respect to any fractional interests
in that common stock resulting from such Common Stock Fundamental
Change); and
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. all of our common stock will have been exchanged for, converted into, or
acquired for common stock (and cash with respect to fractional interests)
of the successor, acquiror or other third party,
the conversion price of the preferred securities in effect immediately before
the Common Stock Fundamental Change will be adjusted by multiplying the
conversion price by a fraction of which the numerator will be one and the
denominator will be the number of shares of common stock of the successor,
acquiror, or other third party received by a holder of one share of our common
stock as a result of the Common Stock Fundamental Change.
In the absence of the adjustments to the conversion price after a
Fundamental Change, in the case of a transaction mentioned above, each
preferred securities would become convertible into the securities, cash, or
other property receivable by a holder of the number of shares of our common
stock into which each preferred securities was convertible immediately prior to
the transaction. As a result, in the absence of the Fundamental Change
provisions, a transaction could substantially lessen or eliminate the value of
the conversion privilege associated with the preferred securities. For example,
if we are acquired in a cash merger, each preferred securities would become
convertible solely into cash and would no longer be convertible into securities
whose value would vary depending on our future prospects and other factors.
In Non-Stock Fundamental Change transactions, the foregoing conversion price
adjustments are designed to increase the securities, cash or other property
into which each preferred securities is convertible. In a Non-Stock Fundamental
Change transaction where the initial value received per share of our common
stock (measured as described in the definition of Relevant Price) is lower than
the conversion price of the preferred securities but greater than or equal to
the Reference Market Price, the conversion price will be adjusted as described
above with the effect that each preferred securities will be convertible into
securities, cash or other property of the same type received by the holders of
our common stock in the transaction with the conversion price adjusted as
though the initial value had been the Adjusted Relevant Price.
In a Non-Stock Fundamental Change transaction where the initial value
received per share of our common stock (measured as described in the definition
of Relevant Price) is lower than both the conversion price of each preferred
securities in effect immediately before any adjustment described above and the
Reference Market Price, the conversion price will be adjusted as described
above but calculated as though the initial value had been the Adjusted
Reference Market Price.
In Common Stock Fundamental Change transactions, the adjustments described
above are designed to provide in effect that:
. where our common stock is converted partly into common stock and partly
into other securities, cash or property, each preferred securities will
be convertible solely into a number of shares of common stock determined
so that the initial value of those shares (measured as described in the
definition of Purchaser Stock Price below) equals the value of the shares
of our common stock into which the preferred securities was convertible
immediately before the transaction (measured as described above) and
. where our common stock is converted solely into common stock, each
preferred securities will be convertible into the same number of shares
of common stock receivable by a holder of the number of shares of our
common stock into which the preferred securities was convertible
immediately before the transaction.
"Closing Price" of any security on any day means the last reported sale
price of that security on that day, or if no sale takes place on that day, the
average of the closing bid and asked prices in each case on the principal
national securities exchange on which the securities are listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on the National Market System of the Nasdaq Stock Market or any
successor national automated interdealer quotation system (the "Nasdaq Stock
Market") or, if such securities are not listed or admitted to trading on any
national securities exchange or quoted on the
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Nasdaq Stock Market, the average of the closing bid and asked prices of that
security in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected by us for that purpose.
"Common Stock Fundamental Change" means any Fundamental Change in which more
than 50% of the value, as determined in good faith by our board of directors,
of the consideration received by holders of our common stock consists of common
stock that for each of the ten consecutive trading days immediately prior to
and including the Entitlement Date has been admitted for listing or admitted
for listing subject to notice of issuance on a national securities exchange or
quoted on the Nasdaq Stock Market; provided, however, that a Fundamental Change
will not be a Common Stock Fundamental Change unless either:
. we continue to exist after the occurrence of the Fundamental Change and
the outstanding preferred securities continue to exist as outstanding
Preferred Securities; or
. not later than the occurrence of such Fundamental Change, the outstanding
debentures are converted into or exchanged for debentures of a
corporation succeeding to the business of our company, which debentures
have terms substantially similar to those of the debentures.
"Entitlement Date" means the record date for determination of the holders of
our common stock entitled to receive securities, cash or other property in
connection with a Non-Stock Fundamental Change or a Common Stock Fundamental
Change or, if there is no record date, the date on which holders of our common
stock will have the right to receive such securities, cash or other property.
"Fundamental Change" means the occurrence of any transaction or event in
connection with a plan under which all or substantially all of our common stock
will be exchanged for, converted into, acquired for or constitute solely the
right to receive securities, cash or other property (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided that, in the case of
a plan involving more than one of these transactions or events, for purposes of
adjustment of the conversion price, the Fundamental Change will be deemed to
have occurred when substantially all of our common stock will be exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash, or other property, but the adjustment will be based upon the
highest weighted average per share consideration that a holder of our common
stock could have received in that transaction or event as a result of which
more than 50% of our common stock will have been exchanged for, converted into,
or acquired for or constitute solely the right to receive securities, cash or
other property.
"Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.
"Optional Redemption Ratio" means a fraction of which the numerator will be
$50 and the denominator will be the then current redemption price or, prior to
December 20, 2002, an amount per preferred securities determined by us in our
sole discretion, after consultation with an investment banking firm, to be the
equivalent of the hypothetical redemption price that would have been applicable
if the preferred securities had been redeemable during such period.
"Purchaser Stock Price" means, with respect to any Common Stock Fundamental
Change, the average of the Closing Prices for the common stock received in the
Common Stock Fundamental Change for the ten consecutive trading days prior to
and including the Entitlement Date, as adjusted in good faith by us to
appropriately reflect any of the events referred to in the first paragraph
under the "--Conversion Price Adjustments--General" section of this prospectus.
"Reference Market Price" initially means $20.17 (which is an amount equal to
66 2/3% of the last reported sale price for our common stock on the New York
Stock Exchange Composite Transactions Tape on December 9, 1999), and, in the
event of any adjustment to the conversion price, other than as a result of a
Non-Stock Fundamental Change, the Reference Market Price will also be adjusted
so that the ratio of the Reference Market Price to the conversion price after
giving effect to the adjustment will always be the same as the ratio of $20.17
to the initial conversion price of the preferred securities.
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"Relevant Price" means (a) in the case of a Non-Stock Fundamental Change in
which the holder of our common stock receives only cash, the amount of cash
received by the holder of one share of our common stock; and (b) in the event
of any other Non-Stock Fundamental Change or any Common Stock Fundamental
Change, the average of the daily Closing Prices for our common stock during the
ten consecutive trading days prior to and including the Entitlement Date, in
each case as adjusted in good faith by us to appropriately reflect any of the
events referred to in the first paragraph under the "--Conversion Price
Adjustments--General" section of this prospectus.
Mandatory Redemption
When the debentures are repaid in full at their stated maturity or the
debentures are redeemed in whole or in part (other than following any
distribution of the debentures to the holders of the preferred securities and
common securities), the proceeds from the repayment or redemption of the
debentures will be applied to redeem, on a pro rata basis, an equivalent
liquidation amount of preferred securities and common securities. The
redemption price for each preferred securities on any such redemption will be
equal to:
. the liquidation amount of each preferred securities plus any accrued and
unpaid distributions on the preferred securities in the case of (a) the
repayment of the debentures at their stated maturity or (b) the
redemption of the debentures in some limited circumstances upon the
occurrence of a tax event; or
. the redemption price described under the "Description of Debentures--
Redemption--Optional Redemption" section of this prospectus in the case
of an optional redemption of the debentures on or after December 20,
2002.
Redemption Procedures
If the trust gives a redemption notice for the preferred securities, then,
by 12:00 noon, New York City time, on the redemption date and provided that we
have paid to the property trustee a sufficient amount of cash for the
redemption, and the preferred securities are held in global form, the property
trustee will:
. deposit with DTC funds sufficient to pay the applicable redemption price;
and
. give DTC irrevocable instructions and authority to pay the applicable
redemption price to the holders of the preferred securities.
For preferred securities held in certificated form, the property trustee
will:
. deposit with the paying agent for the preferred securities funds
sufficient to pay the applicable redemption price; and
. give the paying agent irrevocable instructions and authority to pay the
redemption price to the holders of the preferred securities upon
surrender of their certificates evidencing the preferred securities.
Distributions payable on or prior to the applicable redemption date will be
payable to the holders of the preferred securities on the relevant record dates
for the related distribution dates. If notice of redemption has been given and
funds have been deposited as required, then upon the date of the deposit, all
rights of the holders of the preferred securities will cease, except the right
of the holders of the preferred securities to receive the applicable redemption
price, but without interest on such redemption price, and the preferred
securities will cease to be outstanding.
If a date fixed for redemption is not a business day, then payment of the
redemption price payable on that date will be made on the next day that is a
business day, and without any interest or other payment because of the delay.
However, if the next business day falls in the next calendar year, the payment
will be made on the immediately preceding business day. Payment made in either
of these cases will have the same effect as if made on the date fixed for
redemption. If payment of the redemption price is improperly withheld or
refused and not paid either by the property trustee or by us pursuant to the
guarantee, distributions on the preferred
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securities will continue to accrue from the original redemption date of the
preferred securities to the date the redemption price is actually paid. In that
case, the actual payment date will be the date fixed for redemption for
purposes of calculating the redemption price and accrued interest.
Subject to applicable law, we or our subsidiaries may at any time purchase
outstanding preferred securities by tender, in the open market or by private
agreement.
If we desire to consummate an optional redemption we must send a notice to
each holder of preferred securities at its registered address in accordance
with the notice procedures set forth under the "Description of Debentures--
Redemption--Optional Redemption" section of this prospectus. Notice of a
redemption due to a tax event must be mailed at least 20 days but not more than
60 days before the redemption date to each holder of preferred securities.
Notice of repayment at the stated maturity of the debentures is not required.
Tax Event or Investment Company Event Redemption or Distribution
Tax Event
If a tax event occurs, we will cause the trustees to dissolve the trust and,
after satisfaction of liabilities to creditors of the trust as required by
applicable law, distribute the debentures to the holders of the preferred
securities within 90 days following the occurrence of the tax event. However,
such a liquidation and distribution will be conditioned on:
. the trustees' receipt of an opinion of nationally recognized independent
tax counsel experienced in such matters that the holders of the preferred
securities will not recognize any income, gain or loss for United States
federal income tax purposes as a result of distribution of the
debentures; and
. our being unable to avoid the tax event within the 90-day period by
taking some ministerial action or pursuing some other reasonable measure
that, in our sole judgment, will have no adverse effect on the trust, us
or the holders of the preferred securities and will involve no material
cost.
Furthermore, if a tax event occurs and:
. we receive an opinion of nationally recognized independent tax counsel
experienced in such matters that, as a result of a tax event, there is
more than an insubstantial risk that we would be precluded from deducting
the interest on the debentures for United States federal income tax
purposes, even after the debentures were distributed to the holders of
the preferred securities upon liquidation of the trust as described
above; or
. the trustees are informed by such tax counsel that it cannot deliver the
opinion contemplated by the immediately preceding paragraph,
then we will have the right, upon not less than 20 nor more than 60 days'
notice and within 90 days following the occurrence and continuation of the tax
event, to redeem the debentures, in whole, but not in part, for cash, for the
principal amount of the debentures plus accrued and unpaid interest on the
debentures and, following the redemption, all the preferred securities will be
redeemed by the trust at their aggregate liquidation amount plus accrued and
unpaid distributions on the preferred securities. However, if at the time there
is available to us or the trust the opportunity to eliminate, within a 90-day
period, the tax event by taking some ministerial action or pursuing some other
reasonable measure that, in our sole judgment, will have no adverse effect on
us, the trust or the holders of the preferred securities and will involve no
material cost, either we or the trust will pursue such measure in lieu of
redemption. In lieu of the foregoing options, we will also have the option of
causing the preferred securities to remain outstanding and pay additional sums
on the debentures as described below in the "Description of Debentures--
Additional Sums" section of this prospectus.
A tax event will occur upon the receipt by the property trustee of an
opinion of a nationally recognized independent tax counsel experienced in such
matters to the effect that, on or after the date of original issuance of the
preferred securities, as a result of:
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. any amendment to or change, including any announced prospective change
(provided that a tax event will not occur more than 90 days before the
effective date of any such prospective change), in the laws of the United
States or any political subdivision or taxing authority thereof or
therein;
. any judicial decision or official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations; or
. any amendment to or change in the administrative position or
interpretation of any judicial decision or official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, or
judicial decision that differs from the previously generally accepted
position, in each case, by any legislative body, court, governmental
agency or regulatory body, irrespective of the manner in which such
amendment or change is made known, which amendment or change is effective
or such amendment or change is announced
there is more than an insubstantial risk that:
. if the debentures are held by the property trustee, (a) the trust is,
or will be within 90 days of the date of the opinion, subject to
United States federal income tax with respect to interest accrued or
received on the debentures or subject to more than a de minimis amount
of other taxes, duties or other governmental charges or (b) any
portion of interest payable by us to the trust on the debentures is
not, or within 90 days of the date of the opinion will not be,
deductible by us in whole or in part for United States federal income
tax purposes; or
. with respect to debentures that are no longer held by the property
trustee, any portion of interest payable by us on the debentures is
not, or within 90 days of the date of the opinion will not be,
deductible by us in whole or in part for United States federal income
tax purposes.
Investment Company Event
If an investment company event occurs and is continuing, we will cause the
trustees to dissolve the trust and, after satisfaction of liabilities to
creditors of the trust as required by applicable law, cause the debentures to
be distributed to the holders of the preferred securities in liquidation of the
trust within 90 days following the occurrence of the investment company event.
An investment company event will occur upon the receipt by the property
trustee of an opinion of nationally recognized independent securities counsel
to the effect that on or after the date of original issuance of the preferred
securities, as a result of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, the trust is or will be
considered an investment company that is required to be registered under the
Investment Company Act of 1940, as amended.
The distribution by us of the debentures will effectively result in the
cancellation of the preferred securities.
Liquidation of the Trust and Distribution of the Debentures
We will have the right at any time to dissolve the trust and, after
satisfaction of liabilities to creditors of the trust as required by applicable
law, cause an equivalent principal amount of the debentures to be distributed
to the holders of the preferred securities in liquidation of the trust.
In addition, the trust will automatically dissolve upon the first to occur
of:
. specified events of bankruptcy, dissolution or liquidation of Hanover;
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. upon our election to distribute all of the debentures to the holders of
the preferred securities and the common securities in exchange for all of
the preferred securities and common securities in accordance with the
terms of the preferred securities and common securities;
. redemption of all the preferred securities and common securities as
described under "--Mandatory Redemption" above;
. conversion of all outstanding preferred securities and the trust's common
securities as described under "--Conversion Rights" above;
. December 1, 2049, the expiration of the trust's term; and
. upon a decree of judicial dissolution.
If an early dissolution occurs as described in the first, second or sixth
bullet points above, the trustees will liquidate the trust as expeditiously as
possible by distributing, after satisfaction of liabilities to the trust's
creditors as required by applicable law, to the holders of the preferred
securities and common securities an equivalent principal amount of debentures.
However, if the distribution of debentures is not practical, the holders of
preferred securities will be entitled to receive out of the assets of the trust
available for distribution to holders of preferred securities, an amount equal
to the aggregate liquidation amount of the preferred securities plus accrued
and unpaid distributions of the preferred securities to the date of payment. If
this amount can be paid only in part because the trust has insufficient assets
available to pay the full amount, then the amounts payable directly by the
trust on the preferred securities will be paid on a pro rata basis. We, as
holder of the common securities, will be entitled to receive distributions upon
any such liquidation pro rata with the holders of the preferred securities.
However, if an event of default under the indenture or declaration of trust has
occurred and is continuing, the preferred securities will have a priority over
the common securities with respect to any distributions.
On and after the liquidation date fixed for any distribution of debentures
to holders of the preferred securities and common securities:
. the preferred securities will no longer be deemed to be outstanding;
. DTC or its nominee, as the record holder of the preferred securities,
will receive a registered global certificate or certificates representing
the debentures to be delivered upon such distribution with respect to
preferred securities held by DTC or its nominee; and
. any certificates representing preferred securities not held by DTC or its
nominee will be deemed to represent debentures having a principal amount
equal to the liquidation amount of such preferred securities and bearing
accrued and unpaid interest in an amount equal to the accumulated and
unpaid distributions on such preferred securities until certificates are
presented to the administrative trustees or their agent for cancellation,
whereupon we will issue to such holder, and the debenture trustee will
authenticate, a certificate representing the debentures.
Subordination of Common Securities
Payment on the preferred securities will be made pro rata with payments on
the common securities based on the liquidation amount of the securities.
However, if on a distribution date or redemption date, as the case may be, an
event of default under the indenture or declaration of trust has occurred and
is continuing, no payment may be made on the common securities.
In the case of any event of default under the declaration of trust resulting
from an event of default under the indenture, we, as holder of the common
securities, will be deemed to have waived any right to act with respect to any
such event of default under the declaration of trust until the effect of all
such events of default have been cured, waived or otherwise eliminated. Until
all of the events of default under the declaration of trust have been cured,
waived or otherwise eliminated, the property trustee will act solely on behalf
of the holders of
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the preferred securities and not on our behalf, and only the holders of the
preferred securities will have the right to direct the property trustee to act
on their behalf.
Events of Default; Notice
Any one of the following events constitutes an event of default under the
declaration of trust:
. the occurrence of an event of default under the indenture;
. default by the trust in the payment of any distribution when it becomes
due and payable, and continuation of such default for a period of 30 days
(subject to the deferral of any due date in the case of a deferral
period);
. default by the trust in the payment of any redemption price of any
preferred securities when it becomes due and payable;
. default in the performance, or breach, in any material respect, of any
other covenant or warranty of the trustees in the declaration of trust,
and continuation of such default or breach for a period of 60 days after
there has been given written notice of the breach by the holders of at
least 25% in aggregate liquidation amount of the outstanding preferred
securities; or
. the occurrence of certain events of bankruptcy or insolvency with respect
to the property trustee and our failure to appoint a successor property
trustee within 60 days thereof.
We and the administrative trustees are required to file annually with the
property trustee a certificate as to whether or not we are in compliance with
all the conditions and covenants applicable to us under the declaration of
trust.
Removal of Trustees
Unless an event of default under the indenture occurs and is continuing, we
may remove any trustee at any time. If an event of default under the indenture
has occurred and is continuing, the property trustee and the Delaware trustee
may be removed at that time only by the holders of a majority in liquidation
amount of the outstanding preferred securities. The holders of the preferred
securities do not have the right to appoint, remove or replace the
administrative trustees. We have the exclusive right, as the holder of the
common securities, to appoint, remove or replace the administrative trustees. A
resignation or removal of the Delaware trustee or the property trustee and an
appointment of a successor trustee will not be effective until the acceptance
of appointment by the successor trustee in accordance with the provisions of
the declaration of trust.
Co-trustees and Separate Property Trustee
Unless an event of default under the indenture has occurred and is
continuing, at any time, for the purpose of meeting the legal requirements of
the Trust Indenture Act or of any jurisdiction in which any part of the trust's
property may at the time be located, we, as the holder of the common
securities, and the administrative trustees may appoint one or more persons
either to act as a co-trustee, jointly with the property trustee, of all or any
part of the trust's property, or to act as separate trustee of any of the
trust's property. If an event of default under the indenture has occurred and
is continuing, the property trustee alone will have the power to make the
appointment.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The trust may not merge with or into, consolidate, amalgamate or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other person, except as described below or as
otherwise set forth in the declaration of trust. The trust may, with the
consent of the administrative trustees and without the consent of the holders
of the preferred securities, the property trustee or
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the Delaware trustee, merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, a trust organized under the laws of any state
of the United States or the District of Columbia if:
. the trust is not the surviving entity, the successor entity either (a)
expressly assumes all of the obligations of the trust with respect to the
preferred securities or (b) substitutes for the preferred securities
other securities having substantially the same terms as the preferred
securities so long as the successor securities rank the same as the
preferred securities;
. a trustee of the successor entity possessing the same powers and duties
as the property trustee as the holder of the debentures is appointed;
. the preferred securities or any successor securities are listed, or any
successor securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the preferred
securities are then listed or quoted, if any;
. the transaction does not cause the preferred securities (including any
successor securities) to be downgraded by any nationally recognized
statistical rating agency then rating the preferred securities;
. the transaction does not adversely affect the rights, preferences and
privileges of the holders of the preferred securities (including any
successor securities) in any material respect;
. the successor entity has a purpose substantially identical to that of the
trust;
. prior to the transaction, we receive an opinion from independent counsel
experienced in such matters to the effect that (a) the successor entity
will be treated as a grantor trust for United States federal income tax
purposes, (b) following the transaction, neither the trust nor the
successor entity will be required to register as an investment company
under the 1940 Act, and (c) the transaction will not adversely affect the
limited liability of the holders of the trust securities (including any
successor securities);
. we or any permitted successor or assignee will own all of the common
securities of the successor entity and will guarantee the obligations of
the successor entity under the successor securities at least to the
extent provided by the guarantee; and
. the transaction is not a taxable event for holders of the preferred
securities.
Notwithstanding the foregoing, the trust will not, except with the consent
of holders of 100% in liquidation amount of the preferred securities and common
securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to, any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it, if the transaction would cause
the trust or the successor entity to be classified as an association taxable as
a corporation, or substantially increase the likelihood that the trust or the
successor entity would not be classified as a grantor trust for United States
federal income tax purposes.
Voting Rights; Amendment of the Declaration
Except as provided below and under the "Description of Guarantee--Amendments
and Assignment" section of this prospectus and as otherwise required by law and
the declaration of trust, the holders of the preferred securities will have no
voting rights.
In addition to the rights of the holders of preferred securities to enforce
payment to the trust of the principal or interest on the debentures described
in the "Description of Debentures--Enforcement of Certain Rights by Holders of
Preferred Securities" section of this prospectus, if an event of default under
the indenture occurs and is continuing or we default under the guarantee with
respect to the preferred securities, then the holders of the preferred
securities will be entitled by the majority vote of the holders to appoint a
special trustee. Any holder of preferred securities other than us and our
affiliates will be entitled to nominate a special trustee. Not later than 30
days after the right to appoint a special trustee arises, the trustees will
convene a
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meeting of the holders of the preferred securities for the purpose of
appointing a special trustee. If the trustees fail to convene the meeting
within the 30-day period, the holders of not less than 10% of the aggregate
liquidation amount of the outstanding preferred securities will be entitled to
convene the meeting. Any appointed special trustee will cease to be a special
trustee if the event that caused the appointment is cured. Regardless of the
appointment of a special trustee, we will retain all rights under the
indenture.
The declaration of trust may be amended by us, the property trustee and the
administrative trustees without the consent of the holders of the preferred
securities:
. to cure any ambiguity, correct or supplement any provision in the
declaration of trust that may be inconsistent with any other provision of
the declaration of trust, or to make provisions with respect to
ministerial matters or questions arising under the declaration of trust,
which are not inconsistent with the other provisions of the declaration
of trust; or
. to modify, eliminate or add to any provisions of the declaration of trust
to the extent as is necessary to ensure that (a) the trust will not be
taxable as a corporation and will continue to be classified for United
States federal income tax purposes as a grantor trust at all times that
any preferred securities or common securities are outstanding or (b) the
trust will not be required to register as an "investment company" under
the 1940 Act.
However, in the case described in the first bullet point above, the action
must not adversely affect in any material respect the interests of any holder
of preferred securities.
For amendments not described above, the declaration of trust may only be
amended by us and the trustees if:
. we obtain the consent of holders representing not less than a majority of
the aggregate liquidation amount of preferred securities outstanding; and
. the trustees receive an opinion of counsel that the amendment will not
affect the trust's status as a grantor trust for United States federal
income tax purposes or the trust's exemption from being an "investment
company" under the 1940 Act.
In addition, the declaration of trust may not be amended without the consent
of each holder of preferred securities to:
. change or adversely affect the amount or timing of any distribution on
the preferred securities; or
. restrict the right of a holder of preferred securities to sue to enforce
the payment of a distribution.
So long as any debentures are held by the trust, the trustees will not:
. direct the time, method and place of conducting any proceeding for any
remedy available to the debenture trustee, or executing any trust or
power conferred on the property trustee with respect to the debentures;
. waive any past default that is waivable under the indenture;
. exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the debentures; or
. consent to any amendment, modification or termination of the indenture or
the debentures, where the consent is required,
without, in each case, obtaining the prior approval of the holders of a
majority in aggregate liquidation amount of all outstanding preferred
securities.
However, where a consent under the indenture would require the consent of
each holder of debentures affected by the consent, no consent may be given by
the property trustee without the prior consent of each holder of the preferred
securities. The trustees will not revoke any action previously authorized or
approved by
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a vote of the holders of the preferred securities except by subsequent vote of
the holders. The property trustee will notify each holder of preferred
securities of any notice of default with respect to the debentures. In addition
to obtaining the foregoing approvals of the holders of the preferred
securities, prior to taking any of the foregoing actions, the trustees will
obtain an opinion of counsel experienced in these matters that the action will
not affect the trust's status as a grantor trust for United States federal
income tax purposes on account of the action.
Any required approval of holders of preferred securities may be given at a
meeting of the holders of preferred securities convened for that purpose or by
a written consent. Notice of any meeting at which holders of preferred
securities are entitled to vote will be given to each holder of record of
preferred securities in the manner set forth in the declaration of trust.
No vote or consent of the holders of preferred securities will be required
for the trust to redeem and cancel the preferred securities in accordance with
the declaration of trust.
Even though holders of the preferred securities may be entitled to vote or
consent under any of the circumstances described above, any of the preferred
securities that are owned by Hanover, the trustees or any affiliate of Hanover
or any trustee, will, for purposes of any vote or consent, be treated as if
they were not outstanding.
Expenses and Taxes
In the indenture, we have agreed to pay all present and future costs,
expenses, debts and other obligations, including taxes, other than withholding
taxes, of the trust. However, these costs, expenses, debts and obligations do
not include payment obligations of the trust to the holders of the preferred
securities.
Form, Book-Entry Procedures and Transfer
Preferred securities originally sold to "qualified institutional buyers" as
defined in Rule 144A under the Securities Act were issued in the form of a
fully registered global certificate except as described below. The global
certificate was deposited on the date of original issuance of the preferred
securities with DTC and registered in the name of Cede & Co., as nominee of
DTC. Except as set forth below, the global certificate may be transferred, in
whole and not in part, only to DTC or another nominee of the DTC. Investors may
hold their beneficial interests in the global certificate directly through DTC
if they have an account with DTC or indirectly through organizations that have
accounts with DTC.
DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of institutions that have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. Access to DTC's book-entry system is also available to
others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, whether directly or
indirectly.
Upon the issuance of the global certificate, DTC credited, on its book-entry
registration and transfer system, the principal amount of the global
certificate to the accounts of participants. The accounts credited were
designated by the initial purchasers. Ownership of beneficial interests in the
global certificate is shown on, and the transfer of those ownership interests
will be effected only through, records maintained by DTC (with respect to its
participants) and such participants (with respect to owners of beneficial
interests in the global
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certificate other than participants). The laws of some jurisdictions may
require that certain purchasers of securities take physical delivery of
securities in definitive form. These limits and laws may impair a person's
ability to transfer or pledge beneficial interests in the global certificate.
So long as DTC or its nominee is the registered holder and owner of the
global certificate, DTC or its nominee, as the case may be, will be considered
the sole legal owner and holder of the preferred securities represented by the
certificate for all purposes of the declaration of trust, the guarantee and the
indenture. Except as described below, owners of beneficial interests in the
global certificate will not be entitled to have the preferred securities
represented by the global certificate registered in their names, will not
receive or be entitled to receive physical delivery of certificated preferred
securities in definitive form and will not be considered to be the owners or
holders of any preferred securities under the declaration of trust, the
guarantee or the indenture. We understand that under existing industry
practice, in the event an owner of a beneficial interest in the global
certificate desires to take any action that DTC, as the holder of the global
certificate, is entitled to take, DTC would authorize the participants to take
such action, and that the participants would authorize beneficial owners owning
through such participants to take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of amounts with respect to the preferred securities represented by
the global certificate registered in the name of and held by DTC or its nominee
will be made to DTC or its nominee, as the case may be, as the registered owner
and holder of the global certificate.
We expect that DTC or its nominee, upon receipt of payment of amounts with
respect to the global certificate, will credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the liquidation amount of the global certificate as shown on the records of DTC
or its nominee. We also expect that payments by participants to owners of
beneficial interests in the global certificate held through such participants
will be governed by standing instructions and customary practices and will be
the responsibility of such participants. Neither the trust, the initial
purchasers nor we will have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests in the global certificate or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for
any other aspect of the relationship between or the relationship between such
participants and the owners of beneficial interests in DTC and its participants
or the relationship between such participants and the owners of beneficial
interests in the global certificate owning through such participants.
Unless and to the extent they are exchanged in whole or in part for
certificated preferred securities in definitive form, the global certificate
may not be transferred except as a whole by DTC to a nominee of DTC or by a
nominee of DTC to DTC or another nominee of DTC.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global certificate among participants of DTC, it
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the trust, the initial
purchasers nor we will have any responsibility for the performance by DTC or
its participants or indirect participants of their respective obligations under
the rules and procedures governing their operations.
Neither the trust, the initial purchasers, nor we will be liable for any
delay by DTC or any participant or indirect participant in identifying the
beneficial owners of the preferred securities, and we, the trust and the
initial purchasers may conclusively rely on, and will be protected in relying
on, instructions from DTC for all purposes (including with respect to the
registration and delivery, and their respective liquidation amounts, of the
preferred securities to be issued).
The information in this prospectus concerning DTC and DTC's book-entry
system has been obtained from sources that we believe to be reliable. Neither
the trust, the initial purchasers nor we will have any responsibility for the
performance by DTC or its participants of their respective obligations as
described in this prospectus or under the rules and procedures governing their
respective operations.
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Certificated Preferred Securities
The preferred securities represented by the global certificate are
exchangeable for certificated preferred securities in definitive form only if:
. DTC notifies us or the trust that it is unwilling or unable to continue
as depositary for the global certificate or if at any time DTC ceases to
be a clearing agency registered under the Exchange Act;
. we, or the trust, in our discretion at any time determine not to have all
of the preferred securities evidenced by the global certificate; or
. a default entitling the holders of the preferred securities to accelerate
the maturity of the preferred securities has occurred and is continuing.
Payment and Paying Agency
Payments in respect of the global certificate will be made to DTC. DTC will
credit the relevant accounts at DTC on the applicable distribution dates. For
any preferred securities that are not held by DTC, payment will be made by
check mailed to the address of the holder entitled to payment as the address
appears on the register. The paying agent will initially be the property
trustee. The paying agent will be permitted to resign upon 30 days' written
notice to the property trustee, the administrative trustees and us. In the
event that the property trustee is no longer willing to be the paying agent,
the administrative trustees will appoint a successor, which will be a bank or
trust company acceptable to the administrative trustees and to us, to act as
paying agent.
The property trustee has informed the trust that so long as it serves as
paying agent for the preferred securities, it anticipates that information
regarding distributions on the preferred securities, including payment date,
record date and redemption information, will be made available through
Wilmington Trust Company.
Registrar, Conversion Agent, and Transfer Agent
The property trustee acts as registrar and conversion agent for the
preferred securities. The property trustee acts as initial transfer agent for
certificated preferred securities and may designate additional or substitute
transfer agents at any time. Registration of transfers of certificated
preferred securities will be effected without charge by or on behalf of the
trust upon payment of any tax or other government charges that may be imposed
in relation to the transfer. The trust will not be required to register the
transfer of or exchange certificated preferred securities during the period
beginning at the opening of business 15 days before any selection of
certificated preferred securities to be redeemed and ending at the close of
business on the day of that selection or any certificated preferred securities
called for redemption.
Information Concerning the Property Trustee
The property trustee, other than during the occurrence and continuance of an
event of default, undertakes to perform only the duties that are specifically
described in the declaration of trust. During the existence of an event of
default under the declaration of trust, the property trustee must exercise the
same degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the property
trustee is under no obligation to exercise any of the powers vested in it by
the declaration of trust at the request of any holder of preferred securities
unless it is offered reasonable indemnity against any costs, expenses and
liabilities that might be incurred by the property trustee. If no event of
default has occurred and is continuing and the property trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the declaration of trust or is unsure of the application of any provision of
the declaration of trust, and the matter is not one on which holders of the
preferred securities or the common securities are entitled under the
declaration of trust to vote, then the property trustee will take such action
as is directed by us. If we do not direct the property trustee to take action,
the property trustee will take the action that it deems advisable and in the
best interests of the holders of the preferred securities and common securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.
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Miscellaneous
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the trust in such a way that:
. the trust will not be deemed to be an "investment company" required to be
registered under the 1940 Act;
. the trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes or in a way
that would substantially increase the risk that the trust would be
classified as other than a grantor trust for United States federal income
tax purposes; and
. the debentures will be treated as our indebtedness for United States
federal income tax purposes.
In this connection, we and the administrative trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
or the declaration of trust, that we and the administrative trustees determine
in our discretion to be necessary or desirable for these purposes, as long as
the action does not materially adversely affect the interests of the holders of
the preferred securities and common securities. Holders of the preferred
securities and common securities have no preemptive or similar rights. The
trust may not borrow money or issue debt or mortgage or pledge any of its
assets.
Governing Law
The declaration of trust and the preferred securities are governed by and
construed in accordance with the laws of the State of Delaware.
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DESCRIPTION OF DEBENTURES
We issued the debentures under an indenture between us and Wilmington Trust
Company, as trustee. The indenture will be qualified under the Trust Indenture
Act and incorporates selected provisions of the Trust Indenture Act. We have
summarized selected provisions of the indenture and the debentures. This
summary is not complete, and is subject to and is qualified in its entirety by
reference to all of the provisions of the indenture. A copy of indenture is
available upon request. Unless the context requires otherwise, "Hanover," "we,"
"us," "our" and similar terms in this section refer solely to Hanover
Compressor Company after giving effect to the Restructuring and not the trust
or any of our other consolidated subsidiaries.
General
Concurrently with the issuance of the preferred securities and common
securities, the trust invested the proceeds in debentures issued by us. The
debentures bear interest at the rate of 7 1/4% per annum from December 15,
1999. Interest is payable quarterly in arrears on March 15, June 15, September
15 and December 15 of each year, beginning March 15, 2000, to the person in
whose name each debenture is registered, subject to certain exceptions, at the
close of business on the 1st day of the month of the applicable interest
payment date. It is anticipated that, until the liquidation of the trust, each
debenture will be registered in the name of the trust and held by the property
trustee for the benefit of the holders of the Preferred Securities and common
securities.
The amount of interest payable for any period will be computed on the basis
of the number of days elapsed in a 360-day year consisting of twelve 30-day
months. If an interest payment date is not a business day, then we will make
the payment of the interest on the next day that is a business day, without any
additional interest or other payment due to the delay.
Accrued interest that is not paid on the applicable interest payment date
will bear additional interest compounded quarterly from the relevant interest
payment date. The term "interest" as used in this prospectus includes quarterly
interest payments, interest on quarterly interest payments not paid on the
applicable interest payment date, special interest (as described in the
"Registration Rights" section of this prospectus) and additional sums (as
described in "--Additional Sums"), as applicable.
Unless previously redeemed or repurchased in accordance with the indenture,
the debentures will mature on December 15, 2029.
The debentures are unsecured and rank junior and are subordinate in right of
payment to all of our senior debt and effectively subordinated to all existing
and future liabilities of our subsidiaries, including HCI's bank credit
facility. The indenture does not limit the incurrence or issuance of other
secured or unsecured debt by us or any of our subsidiaries, including senior
debt.
Option to Extend Interest Payment Date
We can, on one or more occasions, defer interest payments on the debentures
for up to 20 consecutive quarterly periods unless an event of default under the
indenture has occurred and is continuing. Thus, we will not be obligated to pay
interest on the debentures during a deferral period. We do not currently intend
to defer interest payments on the debentures.
We may extend a deferral period prior to the period's termination. However,
we may not extend a deferral period, including all previous and further
extensions of the period, beyond 20 consecutive quarterly interest periods or
the maturity date of the debentures. On the interest payment date occurring at
the end of each deferral period, we will pay to the holders of debentures all
accrued and unpaid interest on the debentures, together with interest on that
interest at the stated annual rate, compounded quarterly, to the extent
permitted by applicable law. Once we make all interest payments due on the
debentures, we can commence a new deferral
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period, subject to the same limitations. Consequently, there could be multiple
deferral periods of varying lengths throughout the term of the debentures.
During a deferral period, interest will continue to accrue and holders of the
debentures (and holders of the preferred securities while the preferred
securities are outstanding) will be required to recognize interest income for
United States federal income tax purposes. Please read the "Federal Income Tax
Consequences--Interest Income and Original Issue Discount" section of this
prospectus.
We will be subject to restrictions during a deferral period on our ability
to pay dividends on our capital stock or to make payments on other debt
securities that are on a parity with or junior to the debentures. Please read
the "--Restrictions on Payments" section of this prospectus.
We must give the property trustee, the administrative trustees and the
debenture trustee notice of our election to begin a deferral period at least 10
days before the record date for the distributions on the preferred securities
that would have been payable except for the election to begin or extend the
deferral period. The debenture trustee will give notice of our election to
begin or extend a new deferral period to the holders of the preferred
securities.
Redemption
Repayment at Maturity; Redemption of Debentures
The debentures must be repaid at their stated maturity, unless earlier
redeemed. The circumstances in which we may redeem the debentures prior to
their stated maturity are described below. Upon the repayment in full at
maturity or redemption (other than following the distribution of the debentures
to the holders of the preferred securities and common securities), the trust
will apply the proceeds from the repayment or redemption to redeem, at the
applicable redemption price, an equivalent liquidation amount of preferred
securities and common securities.
Optional Redemption
We have the right to redeem the debentures in whole or in part, at any time
on or after December 20, 2002, upon not less than 20 nor more than 60 days'
notice, at a redemption price equal to the following prices per $50 principal
amount of debentures, plus accrued and unpaid interest thereon, if redeemed
during the 12-month period ending December 19:
<TABLE>
<CAPTION>
Price Per $50
Year Principal Amount
---- ----------------
<S> <C>
2003..................................................... $51.81
2004..................................................... $51.21
2005..................................................... $50.60
2006 and thereafter...................................... $50.00
</TABLE>
In the event of any redemption in part, we will not be required:
. to issue, register the transfer of or exchange any debenture during a
period beginning at the opening of business 15 days before any selection
of debentures for redemption and ending at the close of business on the
earliest date on which the notice of redemption is deemed to have been
given to all holders of debentures to be redeemed; and
. to register the transfer of or exchange any debentures selected for
redemption, in whole or in part, except the unredeemed portion of any
debenture being redeemed in part.
In no event will we optionally redeem the debentures during a deferral
period. Accordingly, prior to optionally redeeming the debentures, all interest
accrued and unpaid (together, in the case of a deferral period,
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with interest thereon, to the extent permitted by law) to the interest payment
date immediately preceding the optional redemption date will be paid in full.
Tax Event Redemption
We may also, under limited circumstances within 90 days of the occurrence
and continuation of a tax event, redeem the debentures in whole, but not in
part, at the aggregate principal amount of the debentures plus accrued and
unpaid interest on the debentures to the date of redemption. Please read the
"Description of Preferred Securities--Tax Event or Investment Company Event
Redemption or Distribution" section of this prospectus.
If we are permitted to consummate the tax event redemption described above
and desire to do so, we must mail notice to holders of Preferred Securities at
least 20 days but not more than 60 days before the redemption date.
Additional Sums
If the property trustee is the sole holder of all debentures and the trust
is required to pay any additional taxes, duties, assessments or other
governmental charges as a result of a tax event or otherwise, we will pay as
additional amounts on the debentures, referred to in this prospectus as
"additional sums", such amounts as are required so that the distributions
payable by the trust to holders of Preferred Securities and common securities
will not be reduced as a result of the additional taxes, duties, assessments or
other governmental changes.
Restrictions on Payments
If any of the following occur:
. an event of default under the indenture;
. we are in default in our payment obligations under the guarantee; or
. we have given notice of our election of a deferral period as provided in
the indenture and have not rescinded the notice, or a deferral period is
continuing,
then, we covenant that we will not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our capital
stock other than stock dividends paid by us which consist of stock of the
same class as that on which the dividend is being paid;
. make any payment of principal, interest or premium, if any, on or repay
or repurchase or redeem any of our debt securities that rank pari passu
with or junior in interest to the debentures; or
. make any guarantee payments with respect to any guarantee by us of the
debt securities of any of our subsidiaries if the guarantee ranks pari
passu with or junior in interest to the debentures.
However, we may:
. declare or pay dividends or distributions in our common stock;
. declare a dividend in connection with the implementation of a
stockholders' rights plan, or issue stock under the plan in the future,
or redeem or repurchase the rights pursuant to the plan;
. make payments under the guarantee;
. purchase shares of our common stock in connection with the satisfaction
by us of our obligations under any employee benefit plan or any other of
our contractual obligations so long as they do not rank pari passu with
or junior in interest to the debentures;
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. do any of the foregoing if it is a result of a reclassification of our
capital stock or the exchange or conversion of one class or series of our
capital stock for another class or series of our capital stock; or
. purchase fractional interests in shares of our capital stock pursuant to
the conversion or exchange provisions of that capital stock or the
security being converted or exchanged.
Modification of Indenture
From time to time we and the debenture trustee may, without the consent of
the holders of debentures, amend, waive or supplement the indenture for
specified purposes, including, among other things:
. curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders
of debentures or the holders of the preferred securities so long as they
remain outstanding); and
. qualifying, or maintaining the qualification of, the indenture under the
Trust Indenture Act.
In addition, we and the debenture trustee, with the consent of the holders
of not less than a majority in principal amount of the outstanding debentures,
can modify the indenture in a manner affecting the rights of the holders of
debentures. However, without the consent of the holder of each affected
debenture, we may not:
. change the stated maturity of the debentures;
. reduce the principal amount of the debentures;
. reduce the rate or extend the time of payment of interest on the
debentures; or
. reduce the percentage of principal amount of debentures the consent of
whose holders is required to amend, waive or supplement the indenture, or
have certain other effects as set forth in the indenture.
notwithstanding the provisions described above or in the "--Events of
Default" section of this prospectus, so long as any of the preferred securities
remain outstanding, (a) no modification may be made that adversely affects the
holders of the preferred securities in any material respect, and no termination
of the indenture may occur, and no waiver of any event of default under the
indenture or compliance with any covenant under the indenture may be effective,
without the prior consent of the holders of at least a majority in aggregate
liquidation preference of preferred securities then outstanding unless and
until the principal of and any premium on the debentures and all accrued and
unpaid interest thereon has been paid in full and (b) where a consent under the
indenture would require the consent of each holder of debentures, no consent
will be given by the property trustee without the prior consent of each holder
of the preferred securities.
Events of Default
The indenture provides that any one or more of the following described
events with respect to the debentures that has occurred and is continuing
constitutes an event of default under the indenture:
. failure for 30 days to pay any interest on the debentures when due
(subject to the deferral of any due date in the case of a deferral
period);
. failure to pay any principal or premium, if any, on the debentures when
due, whether at maturity, upon redemption, by declaration of acceleration
or otherwise;
. failure to observe or perform certain other covenants contained in the
indenture for 60 days after written notice to us from the debenture
trustee or the holders of at least 25% in aggregate outstanding principal
amount of the debentures;
. our failure to issue and deliver shares of our common stock upon an
election by a holder of preferred securities to convert such preferred
securities;
. certain events of bankruptcy, insolvency or reorganization of Hanover; or
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. the voluntary or involuntary dissolution, winding-up or termination of
the trust, except in connection with the distribution of the debentures
to the holders of preferred securities or common securities in
liquidation of the trust, the redemption of all of the preferred
securities and common securities of the trust, or certain mergers,
consolidations or amalgamations, each as permitted by the declaration of
trust.
The holders of a majority in aggregate outstanding principal amount of the
debentures have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the debenture trustee. The debenture
trustee or the holders of not less than 25% in aggregate outstanding principal
amount of the debentures may declare the principal due and payable immediately
upon an event of default under the indenture and, should the debenture trustee
or the holders of debentures fail to make such declaration, the holders of at
least 25% in aggregate liquidation amount of the preferred securities will have
such right. The holders of a majority in aggregate outstanding principal amount
of the debentures may annul the declaration and waive the default if the
default (other than the non-payment of the principal of the debentures which
has become due solely by such acceleration) has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the debenture trustee. Should the holders
of debentures fail to annul the declaration and waive the default, the holders
of a majority in aggregate liquidation amount of the preferred securities will
have the right.
The holders of a majority in aggregate outstanding principal amount of the
debentures affected thereby may, on behalf of the holders of all the
debentures, waive any past default, except a default in the payment of
principal of (or premium, if any) or interest (unless the default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
debenture trustee) or a default in respect of a covenant or provision which
under the indenture cannot be modified or amended without the consent of the
holder of each outstanding debenture. Should the holders of such debentures
fail to annul the declaration and waive such default, the holders of a majority
in aggregate liquidation amount of the preferred securities will have the
right. We are required to file annually with the debenture trustee a
certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to us under the indenture.
If an event of default under the indenture has occurred and is continuing,
the property trustee will have the right to declare the principal of and the
interest on the debentures, and any other amounts payable under the indenture,
to be due and payable and to enforce its other rights as a creditor with
respect to the debentures.
Enforcement of Certain Rights by Holders of Preferred Securities
If an event of default under the indenture has occurred and is continuing
and is attributable to our failure to pay interest or principal on the
debentures on the date such interest or principal is otherwise payable, a
holder of preferred securities may institute a direct action against us. We may
not amend the indenture to remove the right to bring a direct action against us
without the prior written consent of the holders of all of the preferred
securities. Notwithstanding any payments made to a holder of preferred
securities by us in connection with a direct action against us, we will remain
obligated to pay the principal of and interest on the debentures, and will be
subrogated to the rights of the preferred securities holders with respect to
payments on the preferred securities to the extent of any payments made by us
to such holder in any direct action against us.
The holders of the preferred securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the debentures unless there is an event of default
under the declaration of trust.
Consolidation, Merger, Sale of Assets and Other Transactions
The indenture provides that we may not consolidate with or merge with or
into any other person or convey, transfer or lease our properties and assets
substantially as an entirety to any person, and no person may consolidate with
or merge with or into us or convey, transfer or lease its properties and assets
substantially as an entirety to us, unless:
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. in case we consolidate with or merge with or into another person or
convey or transfer our properties and assets substantially as an entirety
to any person, the successor person is organized under the laws of the
United States or any state of the United States or the District of
Columbia, and the successor person expressly assumes our obligations on
the debentures and provides for conversion rights in accordance with the
terms of the indenture;
. immediately after giving effect to the transaction, no event of default
under the indenture, and no event which, after notice or lapse of time or
both, would become an event of default under the indenture, will have
occurred and be continuing;
. if at the time any preferred securities are outstanding, the transaction
is permitted under the declaration of trust and the guarantee and does
not give rise to any breach or violation of the declaration of trust or
the guarantee; and
. other conditions as specified in the indenture are met.
The general provisions of the indenture do not afford holders of the
debentures protection in the event of a highly leveraged or other transaction
involving us that may adversely affect holders of the debentures.
Subordination
In the indenture, we have covenanted and agreed that the debentures will be
subordinate and junior in right of payment to all our senior debt to the extent
provided in the indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of us, the holders of our senior
debt will first be entitled to receive payment in full before the holders of
debentures will be entitled to receive or retain any payment.
If the maturity of the debentures is accelerated, the holders of all our
senior debt outstanding at the time of the acceleration will be entitled to
receive payment in full of all amounts due on the senior debt, including any
amounts due upon acceleration, before the holders of the debentures will be
entitled to receive or retain any payment of the principal of, and premium and
interest, if any, on, the debentures.
In the event that we default in the payment of any principal of, or premium
or interest on, any of our senior debt, and such default continues beyond the
period of grace, if any, specified in the instrument evidencing the senior
debt, then, unless and until the default is cured or waived or ceases to exist
or all senior debt is paid, no direct or indirect payment may be made or agreed
to be made for principal of, and premium and interest, if any, on, the
debentures, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the debentures.
The term "senior debt" as used in this prospectus means:
. the principal of, and premium and interest, if any, on all of our
indebtedness for money borrowed, whether outstanding on the date of
execution of the indenture or thereafter created, assumed or incurred;
. all obligations to make payment pursuant to the terms of financial
instruments, such as (1) securities contracts and foreign currency
exchange contracts, (2) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange agreements, options, commodity futures
contracts and commodity options contracts, and (3) similar financial
instruments; except, in the case of both the immediately preceding bullet
point and this bullet point, the indebtedness and obligations that are
expressly stated to rank junior in right of payment to, or pari passu in
right of payment with, the debentures;
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. indebtedness or obligations of others of the kind described in the two
immediately preceding bullet points above for the payment of which we are
responsible or liable as guarantor or otherwise; and
. any deferrals, renewals or extensions of such senior debt.
However, senior debt does not include:
. any of our debt which, when incurred and without respect to any election
under Section 1111(b) of the United States Bankruptcy Code of 1978, was
without recourse to us;
. trade accounts payable and accrued liabilities arising in the ordinary
course of business;
. any of our debt to any of our subsidiaries;
. debt to any of our employees; and
. debt which by its terms is subordinated to trade accounts payable or
accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such debt by the holders of
the debentures as a result of the subordination provisions of the
indenture would be greater than such payments otherwise would have been
as a result of any obligation of such holders of such debt to pay amounts
over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such debt is subject.
The term "debt" as used in this prospectus means:
. the principal of, and premium and interest, if any, on, indebtedness for
money borrowed;
. purchase money and similar obligations;
. obligations under capital leases;
. guarantees, assumptions or purchase commitments relating to, or other
transactions as a result of which we are responsible for the payment of
such indebtedness of others;
. renewals, extensions and refunding of any such indebtedness;
. interest or obligations in respect of any such indebtedness accruing
after the commencement of any insolvency or bankruptcy proceedings; and
. obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity
contracts and similar arrangements.
The indenture places no limitation on the amount of senior debt that we or
our subsidiaries may incur. At December 31, 1999 after giving effect to the
restructuring, we had no senior debt but had guaranteed approximately $62
million of HCI's indebtedness under its bank credit agreement. In addition, we
had guaranteed the residual value of the equipment under HCI's sale and lease
back transactions of approximately $333 million, which guarantee ranks senior
to the debentures.
Structural Subordination
The debentures are effectively junior in right of payment to all of our
subsidiaries' existing or future indebtedness and other liabilities. As of
December 31, 1999 after giving effect to the Restructuring, our subsidiaries
had $7 million of indebtedness. The indenture permits our subsidiaries to incur
indebtedness and other liabilities without restriction. Any indebtedness of our
subsidiaries will effectively rank senior to the debentures with respect to
such subsidiary's assets. Accordingly, there might only be a limited amount of
assets available to satisfy Hanover's obligations under the debentures and, as
a result, the trust's obligations to holders of the preferred securities.
The debentures and the guarantee are obligations exclusively of Hanover.
Since the operations of Hanover are conducted through its subsidiaries, the
cash flow and the consequent ability to service debt, including the
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debentures and the guarantee, of Hanover, are dependent upon the earnings of
its subsidiaries and the distribution of those earnings to, or upon loans or
other payments of funds by those subsidiaries to, Hanover.
The payment of dividends and the making of loans and advances to Hanover by
its subsidiaries may be subject to statutory or contractual restrictions, are
dependent upon the earnings of those subsidiaries and are subject to various
business considerations.
Any right of Hanover to receive assets of any of its subsidiaries upon their
liquidation or reorganization (and the consequent right of the holders of the
debentures to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except
to the extent that Hanover is itself recognized as a creditor of such
subsidiary, in which case the claims of Hanover would still be subordinate to
any security interests in the assets of such subsidiary and any indebtedness of
such subsidiary senior to that held by Hanover.
Registration and Transfer
The debentures will be represented by one or more global certificates
registered in the name of Cede & Co. as the nominee of DTC if, and only if,
distributed to the holders of the preferred securities and the trust's common
securities. Until that time, the debentures will remain registered in the name
of and held by the property trustee. Should the debentures be distributed to
holders of the preferred securities and the trust's common securities,
beneficial interests in the debentures will be shown on, and transfers of
debentures will be effected only through, records maintained by participants in
DTC. Except as described below, debentures in certificated form will not be
issued in exchange for the global certificates.
A global security will be exchangeable for debentures in certificated form
registered in the names of persons other than Cede & Co. only if:
. DTC notifies us that it is unwilling or unable to continue as a
depositary for the global security or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act;
. we in our sole discretion determine that the global security will be
exchangeable; or
. there shall have occurred and be continuing an event of default under the
indenture.
Payments on debentures held in global form will be made to DTC. For
debentures issued in certificated form, principal and interest will be payable,
the transfer of the debentures will be registrable, and debentures will be
exchangeable for debentures of other denominations of a like aggregate
principal amount, at the corporate office of the debenture trustee in New York,
New York, or at the offices of any paying agent or transfer agent appointed by
us, provided that payment of interest may be made at our option by check mailed
to the address of the persons entitled to payment or by wire transfer.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, please read the "Description of Preferred Securities--Form,
Book-Entry Procedures and Transfer" section of this prospectus. If the
debentures are distributed to the holders of the Preferred Securities and
common securities upon the termination of the trust, the form, book-entry and
transfer procedures with respect to the Preferred Securities as described under
the "Description of Preferred Securities--Form, Book-Entry Procedures and
Transfer" section of this prospectus will apply to the debentures.
Payment and Paying Agents
Payment of the principal of, and premium and interest, if any, on, the
debentures will be made at the office or agency of us maintained for that
purpose in New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. However, at our option, payment of interest may be made (except
in the case of debentures that are held in global form)
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by check mailed to each registered holder or by wire transfer. Payment of any
interest on any debenture will be made to the person in whose name the
debenture is registered at the close of business on the record date for such
interest, except in the case of defaulted interest.
Governing Law
The indenture and the debentures are governed by and construed in accordance
with the laws of the State of New York.
Information Concerning the Debenture Trustee
The debenture trustee has and is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the debenture trustee is under no
obligation to exercise any of the powers vested in it by the indenture at the
request of any holder of debentures, unless offered reasonable indemnity by the
holder against the costs, expenses and liabilities that might be incurred by
the debenture trustee. The debenture trustee is not required to expend or risk
its own funds or otherwise incur personal financial liability in the
performance of its duties if the debenture trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
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DESCRIPTION OF GUARANTEE
The guarantee was executed and delivered by us concurrently with the
issuance by the trust of the preferred securities for the benefit of holders of
preferred securities. Wilmington Trust Company acts as trustee under the
guarantee agreement. The guarantee agreement will be qualified under the Trust
Indenture Act. We have summarized selected provisions of the guarantee
agreement. This summary is not complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the guarantee agreement. The
guarantee trustee will hold the guarantee for the benefit of the holders of the
preferred securities. A copy of the guarantee agreement is available upon
request. Unless the context requires otherwise, "Hanover," "we," "us," "our"
and similar terms in this section refer solely to Hanover Compressor Company
after giving effect to the Restructuring and not the trust or any of our other
consolidated subsidiaries.
General
Under the guarantee agreement, we irrevocably agree to pay in full on a
subordinated basis, to the extent described below, the guarantee payments
described below to the holders of the preferred securities regardless of any
defense, right of set-off or counterclaim that the trust may have or assert
other than the defense of payment. The following payments, called the guarantee
payments, with respect to the preferred securities, to the extent not paid by
or on behalf of the trust, will be subject to the guarantee:
. any accrued and unpaid distributions required to be paid on the preferred
securities, to the extent that the trust has funds on hand available for
payment at such time;
. the applicable redemption price with respect to preferred securities
called for redemption, to the extent that the trust has funds on hand
available for payment at such time; and
. upon a voluntary or involuntary dissolution, winding up or liquidation of
the trust, other than in connection with the distribution of debentures
to the holders of the preferred securities or the redemption of all of
the preferred securities, the lesser of:
. the liquidation distribution, to the extent the trust has funds
available therefor; and
. the amount of assets of the trust remaining available for distribution
to holders of the preferred securities upon liquidation of the trust
after satisfaction of liabilities to creditors of the trust as
required by applicable law.
Our obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by us to the holders of the preferred
securities or by causing the trust to pay the amounts to the holders.
The guarantee is an irrevocable guarantee on a subordinated basis of the
trust's obligations under the preferred securities. However, the guarantee will
apply only to the extent that the trust has funds sufficient to make such
payments, and is not a guarantee of collection. If we do not make interest
payments on the debentures held by the trust, the trust will not be able to pay
distributions on the preferred securities and will not have funds legally
available for the distributions.
The guarantee ranks subordinate and junior in right of payment to all senior
debt. In addition, our obligations under the guarantee are effectively
subordinated to all existing and future liabilities of our subsidiaries. The
guarantee does not limit the incurrence or issuance of other secured or
unsecured debt by us or by our subsidiaries, including senior debt.
Taken together, our obligations under the guarantee agreement, the
declaration of trust, the debentures and the indenture, including our
obligation to pay the costs, expenses and other liabilities of the trust other
than the trust's obligations to the holders of the preferred securities and
common securities, provide, in the aggregate, a full, irrevocable and
unconditional guarantee of all of the trust's obligations under the preferred
securities. No single document standing alone or operating in conjunction with
fewer than all the other documents constitutes
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such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
trust's obligations under the preferred securities.
Status of the Guarantee
The guarantee is a guarantee of payment and not of collection, meaning the
guaranteed party may institute a legal proceeding directly against us to
enforce its rights under the guarantee without first instituting a legal
proceeding against any other person or entity. The guarantee will be held for
the benefit of the holders of the preferred securities. The guarantee will not
be discharged except by payment of the guarantee payments in full to the extent
not paid by the trust or upon distribution to the holders of the preferred
securities of the debentures.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the preferred securities (in which case no vote will
be required), the guarantee may not be amended without the prior approval of
the holders of not less than a majority of the aggregate liquidation amount of
the outstanding preferred securities. The manner of obtaining any such approval
will be as set forth under the "Description of preferred securities--Voting
Rights; Amendment of the Declaration" section of this prospectus. All
guarantees and agreements contained in the guarantee will bind the successors,
assigns, receivers, trustees and our representatives and will inure to the
benefit of the holders of the preferred securities then outstanding.
Events of Default
An event of default under the guarantee will occur upon our failure to
perform any of our payment or other obligations under the guarantee agreement.
However, except for a failure to make a guarantee payment, we are entitled to
receive notice of the default and cure the default within 60 days after receipt
of the notice. The holders of a majority in aggregate 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 the guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under the guarantee.
Any holder of the preferred securities may institute a legal proceeding
directly against us to enforce its rights under the guarantee without first
instituting a legal proceeding against the trust, the guarantee trustee or any
other person or entity.
We, as guarantor, are required to file annually with the guarantee trustee a
certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to us under the guarantee.
Information Concerning the Guarantee Trustee
The guarantee trustee, other than during the occurrence and continuance of a
default by us in performance of the guarantee, undertakes to perform only the
duties that are specifically described in the guarantee. After a default under
the guarantee agreement, the guarantee trustee must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the guarantee trustee is under
no obligation to exercise any of the powers vested in it by the guarantee at
the request of any holder of the preferred securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred.
Termination of the Guarantee
The guarantee will terminate as to each holder of preferred securities upon:
. full payment of the redemption price and accrued and unpaid distributions
with respect to all preferred securities;
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. distribution of the debentures held by the trust to the holders of the
preferred securities;
. liquidation of the trust; or
. distribution of our common stock to such holder in respect of the
conversion of such holder's preferred securities into common stock.
In addition, the guarantee will terminate completely upon full payment of
the amounts payable in accordance with the declaration of trust. The guarantee
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 under the preferred
securities or the guarantee.
Governing Law
The guarantee agreement is governed by and construed in accordance with the
laws of the State of New York.
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RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE DEBENTURES AND THE GUARANTEE
Full and Unconditional Guarantee
Payments of distributions and other amounts due on the preferred securities
(to the extent the trust has funds available for the payment of such
distributions) are irrevocably guaranteed by us to the extent set forth under
the "Description of Guarantee" section of this prospectus. Taken together, our
obligations under the debentures, the indenture, the declaration of trust and
the guarantee agreement provide a full, irrevocable and unconditional guarantee
of payments of distributions and other amounts due on the preferred securities.
No single document standing alone or operating in conjunction with fewer than
all of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the trust's obligations under the
preferred securities. If and to the extent that we do not make payments on the
debentures, the trust will not pay distributions or other amounts due on the
preferred securities. The guarantee does not cover payment of distributions
when the trust does not have sufficient funds to pay such distributions. In
such event, the remedy of a holder of preferred securities is to institute a
direct action against us under the debentures. Our obligations under the
guarantee are subordinate and junior in right of payment to all our senior
debt. Unless the context requires otherwise, "Hanover," "we," "us," "our" and
similar terms in this section refer solely to Hanover Compressor Company after
giving effect to the Restructuring and not the trust or any of our other
consolidated subsidiaries.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
debentures, the payments will be sufficient to cover distributions and other
payments due on the preferred securities, primarily because:
. the aggregate principal amount or applicable redemption price of the
debentures will be equal to the sum of the aggregate liquidation amount
or applicable redemption price, as applicable, of the preferred
securities and common securities;
. the interest rate payable on the debentures and interest and other
payment dates on the debentures will match the distribution rate and
distribution and other payment dates for the preferred securities;
. we will pay for all costs, expenses and liabilities of the trust except
the trust's obligations to holders of preferred securities and common
securities; and
. the declaration of trust further provides that the trust will not engage
in any activity that is not consistent with its limited purposes.
Notwithstanding anything to the contrary in the indenture, we have the right
to set off any payment we are otherwise required to make under the indenture to
the extent we have made, or are concurrently on the date of such payment
making, any payment under the guarantee used to satisfy the related payment of
indebtedness under the indenture.
Enforcement Rights of Holders of Preferred Securities
Any holder of preferred securities may institute a legal proceeding directly
against us to enforce its rights under the guarantee without first instituting
a legal proceeding against the guarantee trustee, the trust or any other person
or entity and may, under certain circumstances, also institute a legal
proceeding directly against us to recover unpaid amounts under the debentures.
A default or event of default under any of our senior debt would not
constitute a default or event of default under the declaration of trust.
However, in the event of payment defaults under, or acceleration of, our senior
debt, the subordination provisions of the indenture provide that no payments
may be made in respect of the debentures until the senior debt has been paid in
full or any payment default thereunder has been cured or waived. Failure to
make required payments on debentures would constitute an event of default under
the declaration of trust.
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Limited Purpose of the Trust
The preferred securities evidence a beneficial interest in the trust, and
the trust exists for the sole purpose of issuing the preferred securities and
common securities and investing the proceeds of the preferred securities and
common securities in debentures.
Rights Upon Dissolution
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the trust involving the liquidation of the debentures, after satisfaction of
the liabilities of creditors of the trust as required by applicable law, the
holders of the preferred securities and common securities will be entitled to
receive, out of assets held by the trust, the liquidation distribution in cash.
Upon any voluntary or involuntary liquidation or our bankruptcy, the property
trustee, as holder of the debentures, would be a subordinated creditor of us,
subordinated in right of payment to all senior debt as set forth in the
indenture, but entitled to receive payment in full of principal and interest,
before any of our stockholders receive payments or distributions. Since we are
the guarantor under the guarantee and have agreed to pay for all costs,
expenses and liabilities of the trust, other than the trust's obligations to
the holders of the preferred securities and common securities, the positions of
a holder of preferred securities and a holder of debentures relative to other
creditors and to our stockholders in the event of liquidation or our bankruptcy
are expected to be substantially the same.
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DESCRIPTION OF HANOVER CAPITAL STOCK
Our authorized capital stock currently consists of 100,000,000 shares of
common stock and 3,000,000 shares of preferred stock, $.01 par value per share.
The following summary description relating to the capital stock does not
purport to be complete. For a detailed description, reference is made to our
certificate of incorporation.
Common Stock
As of December 31, 1999, 28,752,937 shares of common stock were issued and
held of record by approximately 233 stockholders. The holders of common stock
are entitled to one vote for each share held of record on all matters submitted
to a vote of the stockholders. Subject to preferential rights with respect to
our preferred stock, holders of common stock are entitled to receive ratably
any dividends declared by our board of directors out of legally available
funds. On liquidation, dissolution, sale or winding up of Hanover, holders of
common stock are entitled to share ratably in all assets remaining after
payment of liabilities and satisfaction of preferential rights. Holders of
common stock have no preemptive or subscription rights. The outstanding shares
of common stock are, and the shares of common stock to be issued upon
conversion of the preferred securities will be, fully paid and nonassessable.
We have never declared a dividend on the common stock, and our bank credit
agreement prohibits the payment of dividends on common stock without the
lenders' prior written consent. The payment of any such dividends also will be
subject to, and may be limited by, the terms of any preferred stock we may
issue in the future.
Transfer Agent And Registrar
The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services.
Preferred Stock
We are authorized to issue 3,000,000 shares of preferred stock. Our board of
directors may establish, without stockholder approval, one or more classes or
series of preferred stock having the number of shares, designations, relative
voting rights, dividend rates, liquidation and other rights, preferences and
limitations that the board of directors may designate. We believe that this
power to issue preferred stock provides flexibility in connection with possible
corporate transactions. The issuance of preferred stock, however, could
adversely affect the voting power of holders of common stock and restrict their
rights to receive payments upon liquidation of Hanover. It could also have the
effect of delaying, deferring or preventing a change in control of Hanover.
Special Provisions Of The Certificate Of Incorporation And Delaware Law
Section 102(b)(7) of the Delaware General Corporation Law authorizes
corporations to limit or eliminate the personal liability of directors to
corporations and their stockholders for monetary damages for breach of
directors' fiduciary duty of care. Although Section 102(b) does not change
directors' duty of care, it enables corporations to limit available relief to
equitable remedies such as injunction or rescission. Our certificate of
incorporation limits the liability of directors to us or our stockholders (in
their capacity as directors but not in their capacity as officers) to the
fullest extent permitted by Section 102(b). Specifically, our directors will
not be personally liable for monetary damages for breach of a director's
fiduciary duty as a director, except for liability (a) for any breach of the
director's duty of loyalty to Hanover or our stockholders (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) for unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law or (d) for any transaction from which the director
derived an improper personal benefit.
To the maximum extent permitted by law, our certificate of incorporation and
bylaws provide for mandatory indemnification of directors and officers and
permit indemnification of our officers, employees and
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agents against all expense, liability and loss to which they may become subject
or which they may incur as a result of being or having been a director,
officer, employee or agent of Hanover or its subsidiaries. In addition, we must
advance or reimburse directors, and may advance or reimburse officers,
employees and agents for expenses incurred by them in connection with
indemnifiable claims.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, Section 203 prohibits a public Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless (a) before that
person became an interested stockholder, the corporation's board of directors
approved the transaction in which the interested stockholder became an
interested stockholder or approved the business combination; (b) upon
completion of the transaction that resulted in the interested stockholder's
becoming an interested stockholder, the interested stockholder owns at least
85% of the voting stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of the corporation and
by employee stock plans that do not provide employees with the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer); or (c) following the transaction in
which that person became an interested stockholder, the business combination is
approved by the corporation's board of directors and authorized at a meeting of
stockholders by the affirmative vote of the holders of at least two-thirds of
the outstanding voting stock not owned by the interested stockholder. Under
Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested stockholder following the announcement
or notification of one of certain extraordinary transactions involving the
corporation and a person who was not an interested stockholder during the
previous three years or who became an interested stockholder with the approval
of a majority of the corporation's directors, if that extraordinary transaction
is approved or not opposed by a majority of the directors who were directors
before any person became an interested stockholder in the previous three years
or who were recommended for election or elected to succeed such directors by a
majority of such directors then in office. "Business combination" includes
mergers, assets sales and other transactions resulting in a financial benefit
to the stockholder. "Interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
the corporation's voting stock.
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FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Latham & Watkins, counsel to Hanover, the following are
the material United States federal income tax consequences to beneficial owners
resulting from their ownership and disposition of the preferred securities and
the common stock. Unless otherwise stated, this summary considers only
preferred securities and common stock held as capital assets (generally,
property held for investment). The tax treatment of a holder may vary depending
on its particular situation. This summary does not consider all aspects of
taxation that may be relevant to a holder in light of its particular
circumstances or to classes of holders who are subject to special treatment
under the federal income tax laws, including, without limitation:
. banks, thrifts, and other financial institutions;
. real estate investment trusts and regulated investment companies;
. insurance companies;
. tax exempt organizations;
. broker-dealers;
. persons holding preferred securities or common stock as part of a
straddle or as part of a hedging or conversion transaction or other
integrated investment;
. foreign persons; and
. persons whose functional currency is not the United States dollar.
In addition, this summary does not include any discussion of the alternative
minimum tax consequences or the tax laws of any state, local or foreign
jurisdictions that may be applicable to the preferred securities and the common
stock.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Regulations thereunder and administrative and judicial
interpretations thereof as of the date hereof, all of which are subject to
change, possibly on a retroactive basis. The authorities on which this summary
is based are subject to various interpretations, and it is therefore possible
that the federal income tax treatment of the ownership and disposition of the
preferred securities and the common stock may differ from the treatment
described below. Neither the trust nor Hanover has sought, nor will either
seek, a ruling from the Internal Revenue Service (the "IRS") on the federal tax
consequences described in this summary, and it is possible that the IRS could
take a position contrary to the interpretations herein.
Investors are advised to consult their own tax advisors as to the tax
consequences of the ownership and disposition of the preferred securities and
the common stock, in light of their particular circumstances, under the federal
income tax laws and any applicable state, local, foreign and other tax laws,
including the effects of possible future changes in such laws.
Classification of the Trust
Assuming full compliance with the terms of the declaration of trust, the
indenture and certain other documents, the trust will be classified for federal
income tax purposes as a grantor trust and not as a corporation or a publicly
traded partnership taxable as a corporation. Accordingly, each holder of
preferred securities will be considered to be the owner of an undivided
interest in the debentures held by the trust and will be required to include in
gross income its pro rata share of interest income on the debentures, including
original issue discount (if any), whether or not cash is actually distributed
to the holder.
Classification of the Debentures
Hanover intends to take the position that the debentures will be classified
for federal income tax purposes as indebtedness. By acceptance of the preferred
securities, each holder covenants to treat the debentures as
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indebtedness and the preferred securities as evidence of an indirect beneficial
ownership interest in the debentures. No assurance can be given, however, that
the classification of the debentures as indebtedness will not be challenged by
the IRS or, if challenged, that such a challenge will not be successful. The
remainder of this summary assumes that the debentures will be classified for
federal income tax purposes as indebtedness of Hanover.
Interest Income and Original Issue Discount
Unless the original issue discount ("OID") rules apply to the debentures, as
discussed below, stated interest on the preferred securities generally will be
taxable to a holder as ordinary income when paid or accrued in accordance with
the holder's method of accounting for federal income tax purposes. While the
existence of an issuer's option to defer the payment of interest on debt
instruments generally results in the application of the OID rules, debt
instruments like the debentures are not considered issued with OID if there is
only a "remote" likelihood of the issuer exercising its option of deferral.
Hanover believes that, as of the issue date of the preferred securities, the
likelihood of Hanover deferring payments of interest under the terms of the
debentures was "remote" within the meaning of the applicable Treasury
Regulations. Therefore, the debentures should not be treated as subject to the
OID rules at the time of their original issuance by reason of Hanover's
deferral option.
If the likelihood of Hanover exercising its option to defer any payment of
interest was determined not to be "remote" or if Hanover does exercise its
option to defer payments of interest, the debentures would be treated as
subject to the OID rules at the time of their original issuance or at the time
of such exercise, as the case may be, for the entire remaining term of the
debentures. Under these rules, all of the stated interest on the debentures
would be treated as OID and such OID would accrue, and be includible in income,
on a daily basis under a constant yield method, including during any interest
deferral period, regardless of the holder's method of accounting for federal
income tax purposes. Consequently, holders of the preferred securities would be
required to include OID in gross income even if Hanover did not make any actual
distributions during a deferral period. Actual distributions of stated interest
on the debentures generally would not be separately taxable. A holder that
disposes of its preferred securities prior to the record date for payment of
distributions on the debentures will be subject to tax on OID accrued through
the date of disposition and not previously included in income, but will not
receive cash from the trust with respect to such OID. If Hanover exercises its
deferral option, investors should consult their own tax advisors regarding
their specific tax consequences of such deferral.
The income underlying the preferred securities should be treated as interest
and will not be characterized as dividends for federal income tax purposes.
Consequently, corporate holders of the preferred securities should not be
entitled to a dividends-received deduction for any income recognized with
respect to the preferred securities.
Market Discount
The market discount rules generally provide that, subject to a statutorily-
defined de minimis exception, if an investor acquires a debt instrument at a
market discount (i.e., at a price below its stated redemption price at maturity
or its revised issue price if it is subject to the OID rules) and thereafter
recognizes gain upon its disposition (or disposes of it in certain non-
recognition transactions such as a gift), the lesser of (i) such recognized
gain (or, in the case of an applicable non-recognition transaction, the deemed
gain based on the fair market value of the instrument at the time of the non-
recognition transaction) or (ii) the portion of the market discount that
accrued while the instrument was held by such holder will be treated as
ordinary interest income at the time of the disposition. A holder of a
preferred security who is considered to have acquired a debenture at a market
discount would be required to treat as ordinary interest income the portion of
any principal payment (including a payment on maturity) attributable to accrued
market discount. In addition, a holder of a preferred security who is
considered to have acquired a debenture at a market discount may be required to
defer a portion
45
<PAGE>
of any interest expense that otherwise may be deductible on any indebtedness
incurred or maintained to purchase or carry the preferred security until such
holder disposes of the preferred security in a taxable transaction.
A holder of a preferred security who is considered to have acquired a
debenture at a market discount may elect to include market discount in income
as the discount accrues, either on a ratable basis or, if elected, on a
constant interest rate basis. The current inclusion election, once made,
applies to all market discount obligations acquired on or after the first day
of the first taxable year to which the election applies, and may only be
revoked with the consent of the IRS. If a holder makes a current inclusion
election, the foregoing rules with respect to the recognition of ordinary
income on sales, principal payments and certain other dispositions of the
preferred securities and the deferral of interest deductions on indebtedness
related to the preferred securities would not apply.
Amortizable Bond Premium
Generally, if the price or tax basis of a preferred security exceeds the sum
of all amounts payable on a debenture after the acquisition date (other than
payments of qualified stated interest), such excess may constitute amortizable
bond premium that a holder may elect to amortize under the constant interest
rate method over the period from the holder's acquisition date to the maturity
date of the preferred security. Amortizable bond premium generally will be
treated as an offset to the interest income underlying a preferred security,
rather than as a separate interest deduction item subject to the investment
interest limitations of the Code. A holder of a preferred security that elects
to amortize bond premium must generally reduce the tax basis in the preferred
security by the amount of bond premium used to offset interest income. If a
preferred security purchased at a premium is redeemed in full prior to its
maturity, a holder of a preferred security who has elected to amortize bond
premium may be entitled to a deduction for any remaining unamortized bond
premium in the taxable year of redemption.
Sale of Preferred Securities
A holder who sells preferred securities will be considered to have disposed
of all or part of its pro rata share of the debentures and will recognize gain
or loss equal to the difference between the amount realized on the sale of the
preferred securities and the holder's adjusted tax basis in such preferred
securities. A holder's adjusted tax basis in the preferred securities generally
will be its initial purchase price, increased by any OID or market discount
previously includible in such holder's income to the date of sale and decreased
by distributions or other payments received on the preferred securities from
and including the day that the debentures became subject to the OID rules and
by the amount of amortizable bond premium that offset interest income. Subject
to the OID and market discount rules discussed above, any gain or loss
recognized on the sale of the preferred securities generally will be capital
gain or loss except to the extent of any accrued interest with respect to such
holder's pro rata share of the debentures required to be included in income as
ordinary income. Such capital gain or loss will be long-term capital gain or
loss if the preferred securities have been held by the holder for more than one
year.
If the debentures are subject to the OID rules, a holder who disposes of its
preferred securities between record dates for payments of distributions thereon
will be required to include OID on the debentures through the date of
disposition in income as ordinary income, and to add such amount to its
adjusted tax basis in the preferred securities. To the extent the amount
realized on the sale is less than the holder's adjusted tax basis, which basis
will include all accrued but unpaid OID, a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied
to offset ordinary income for federal income tax purposes.
Receipt of Debentures or Cash Upon Liquidation of the Trust
Under certain circumstances, the debentures may be distributed to holders in
exchange for the preferred securities and in liquidation of the trust. Such a
distribution would be a nontaxable event to each holder, and each holder would
receive an aggregate tax basis in the debentures equal to such holder's
aggregate tax basis in
46
<PAGE>
the preferred securities. A holder's holding period in the debentures so
received would include the period during which the preferred securities were
held by such holder.
Under certain circumstances, the debentures also may be redeemed for cash
and the proceeds of such redemption distributed to holders in redemption of
their preferred securities. Such a redemption would constitute a taxable
disposition of the redeemed preferred securities, and a holder would recognize
gain or loss as if it sold the redeemed preferred securities for cash. Please
read the "--Sale of Preferred Securities" section of this prospectus.
If, however, the liquidation of the trust were to occur because of an event
which results in the trust being subject to federal income tax with respect to
income accrued or received on the debentures, the distribution of the
debentures to a holder of preferred securities would be a taxable event to the
trust and to each holder of preferred securities. In this case, each holder of
preferred securities would recognize gain or loss as if the holder had
exchanged its preferred securities for the debentures upon liquidation of the
trust.
Conversion of Preferred Securities into Common Stock
Except to the extent attributable to accrued but unpaid interest on the
debentures, a holder of preferred securities generally will not recognize
income, gain or loss upon the conversion of preferred securities into Hanover
common stock. A holder will, however, recognize gain or loss upon the receipt
of cash in lieu of a fractional share of common stock equal to the amount of
cash so received less the holder's adjusted tax basis in the fractional share.
A holder's tax basis in the common stock received upon conversion generally
will be equal to the holder's adjusted tax basis in the preferred securities
delivered to the conversion agent for exchange, less the basis allocated to any
fractional share for which cash is received. A holder's holding period in the
common stock received upon conversion generally will include the holding period
of the preferred securities delivered to the conversion agent for exchange.
Adjustment of Conversion Price
Treasury Regulations promulgated under Section 305 of the Code may treat
holders of preferred securities as having received a constructive distribution
from Hanover in certain events in which the conversion ratio of the debentures
into common stock is adjusted. Accordingly, under certain circumstances, a
reduction in the conversion price for the debentures may result in deemed
dividend income to holders of preferred securities to the extent of current and
accumulated earnings and profits of Hanover. In this case, holders of preferred
securities would be required to include their allocable share of such deemed
dividend income in gross income but would not receive any cash related thereto,
and holders would increase their tax basis in their preferred securities by the
amount includible in income. Holders are advised to consult their own tax
advisors as to the federal income tax consequences of adjustments in the
conversion ratio of the debentures.
Distributions on Common Stock
The amount of any distribution on the common stock will be equal to the
amount of cash and the fair market value of any property distributed.
Generally, distributions will be treated as dividends, subject to tax as
ordinary income, to the extent of Hanover's current and accumulated earnings
and profits as determined for federal income tax purposes, then as a tax-free
return of capital to the extent of a holder's tax basis in the common stock and
thereafter as gain from the sale or exchange of the stock. In general, a
corporate recipient of a dividend distribution will qualify for a dividends
received deduction the amount of which varies, depending upon the level of the
holder's stock ownership, and which is subject to certain holding period,
taxable income and other limitations.
47
<PAGE>
Sale of Common Stock
Upon the sale or taxable exchange of common stock, a holder generally will
recognize gain or loss equal to the difference between the amount of cash and
the fair market value of any property received and such holder's adjusted tax
basis in the common stock. Any such gain or loss generally will be capital gain
or loss and will be long-term capital gain or loss if such holder's holding
period for the common stock exceeds one year. The determination of a holder's
basis and holding period in common stock received upon conversion of preferred
securities are discussed above under the "--Conversion of Preferred Securities
into Common Stock" section of this prospectus. A holder that purchases common
stock generally will have a basis in the common stock equal to the amount of
cash paid plus the fair market value of any property exchanged for the stock.
Information Reporting
The trust will report the interest paid or accrued, including OID (if any),
during the year with respect to the debentures, and any gross proceeds received
by the trust from the retirement or redemption of the debentures, annually to
the holders of record of the preferred securities and to the IRS. The trust
currently intends to deliver such reports to holders of record not later than
January 31 following each calendar year. It is anticipated that persons who
hold preferred securities as nominees for beneficial owners will report the
required tax information to beneficial owners on Form 1099.
Backup Withholding
Payments made on, and proceeds from the sale of, preferred securities, any
debentures distributed by the trust or any common stock received on conversion
may be subject to 31% backup withholding unless the holder complies with
certain identification requirements or otherwise qualifies for an exemption
from backup withholding. Backup withholding is not an additional tax. Any
withheld amounts generally will be refunded or credited against the holder's
federal income tax liability, provided the required information is timely filed
with the IRS.
Possible Tax Law Changes
Holders of preferred securities should be aware that legislation has been
proposed by the Clinton Administration in the past that, if enacted, would have
denied an interest expense deduction to issuers of instruments such as the
preferred securities. While legislation of this kind is not currently pending,
it is possible that similar legislation ultimately could be enacted into law,
or that other developments may occur on or after the date of this prospectus
that would adversely affect the tax treatment of the preferred securities or
the trust. Changes of this kind could, among other things, result in the
redemption of the preferred securities for cash or the dissolution of the trust
and the distribution of the debentures to holders of the preferred securities.
48
<PAGE>
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") should consider the fiduciary standards of ERISA in the context of
the plan's particular circumstances before authorizing an investment in the
Preferred Securities. Accordingly, among other factors, the fiduciary should
consider whether the investment would satisfy the prudence and diversification
requirements of ERISA, whether the investment could result in an improper
delegation of fiduciary authority and whether the investment would be
consistent with the documents and instruments governing the plan.
Section 406 of ERISA and Section 4975 of the Code prohibit plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code, from engaging in certain transactions involving "plan assets" with
persons who are "parties in interest" under ERISA or "disqualified persons"
under the Code with respect to such plans. A violation of these "prohibited
transaction" rules may result in an excise tax or other liabilities under ERISA
and/or Section 4975 of the Code for such persons, unless exemptive relief is
available under an applicable statutory or administrative exemption. Employee
benefit plans that are governmental plans (as defined in Section 3(32) of
ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign
plans (as described in Section 4(b)(4) of ERISA) are not subject to the
requirements of ERISA or Section 4975 of the Code.
Under a regulation issued by the United States Department of Labor (the
"DOL"), the assets of the trust would be deemed to be "plan assets" of a plan
for purposes of ERISA and Section 4975 of the Code if "plan assets" of the plan
were used to acquire an equity interest in the trust and no exception were
applicable under the plan assets regulation. An "equity interest" is defined
under the plan assets regulation as any interest in an entity other than an
instrument that is treated as indebtedness under applicable local law and that
has no substantial equity features and specifically includes a beneficial
interest in a trust.
Pursuant to an exception contained in the plan assets regulation, the assets
of the trust would not be deemed to be "plan assets" of investing plans if,
immediately after the most recent acquisition of any equity interest in the
trust, less than 25% of the value of each class of equity interests in the
trust were held by plans, other employee benefit plans not subject to ERISA or
Section 4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any plan. We cannot
assure you that the value of the preferred securities held by benefit plan
investors will be less than 25% of the total value of such preferred securities
at the completion of the initial offering or otherwise.
Certain transactions involving the trust could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a plan if the preferred securities were acquired with
"plan assets" of such plan and assets of the trust were deemed to be "plan
assets" of plans investing in the trust. For example, if we are a party in
interest with respect to an investing plan (either directly or by reason of its
ownership of its subsidiaries), extensions of credit between the trust and us
(as represented by the debentures and the guarantee) would likely be prohibited
by Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless
exemptive relief were available under an applicable administrative exemption
(see below). Because the assets of the trust may be considered "plan assets"
for ERISA purposes as a result of a plan's acquisition and holding of preferred
securities, a plan fiduciary should consider (a) whether powers which
potentially may be exercised by any person or entity with respect to the trust
or its assets would result in such person or entity being potentially deemed to
be a fiduciary and, therefore, a party in interest with respect to a plan
acquiring or holding preferred securities and (b) if so, whether such
acquisition and holding could result in a delegation of fiduciary authority
which is impermissible under the plan's governing instruments or any investment
management agreement with the plan. In making such determination, a plan
fiduciary should note that prior to a default, the trustees will have only
limited custodial and ministerial authority with respect to the assets of the
trust.
The DOL has issued five prohibited transaction class exemptions that may
provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the preferred securities,
49
<PAGE>
assuming that assets of the trust were deemed to be "plan assets" of plans
investing in the trust (see above). Those class exemptions are PTCE 96-23 (for
certain transactions determined by in-house asset managers), PTCE 95-60 (for
certain transactions involving insurance company general accounts), PTCE 91-38
(for certain transactions involving bank collective investment funds), PTCE 90-
1 (for certain transactions involving insurance company separate accounts) and
PTCE 84-14 (for certain transactions determined by qualified professional asset
managers).
Because the preferred securities may be deemed to be equity interests in the
trust for purposes of applying ERISA and Section 4975 of Code, the preferred
securities may not be purchased or held by any plan, any entity whose
underlying assets include "plan assets" by reason of any plan's investment in
an entity (a "plan asset entity") or any person investing "plan assets" of any
plan, unless the purchaser or holder is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Any purchaser or
holder of the preferred securities or any interest therein will be deemed to
have represented by its purchase and holding that it either (a) is not a plan
or a plan asset entity and is not purchasing such securities on behalf of or
with "plan assets" of any plan or (b) is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. See "Transfer
Restrictions." Further, the fiduciaries of any plan or plan asset entity which
may purchase or hold preferred securities will be deemed as a result of such
acquisition or holding to have (a) directed the trust to invest in the
debentures, (b) authorized and directed any of the actions taken or which may
be taken with respect to the trust, the debentures and the preferred securities
by any of the trustees, the debenture trustee, the guarantee trustee, or us as
contemplated by the indenture, the debentures or the guarantee and (c) to have
appointed the trustees.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the
preferred securities on behalf of or with "plan assets" of any plan consult
with their counsel regarding the potential consequences if the assets of the
trust were deemed to be "plan assets" and the availability of exemptive relief
under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
50
<PAGE>
REGISTRATION RIGHTS
We and the trust entered into a registration agreement with the initial
purchasers of the preferred securities for the benefit of the holders of the
preferred securities wherein we and the trust agreed, at our sole expense, to
. file as soon as practicable, but in no event more than 60 days after the
original issuance of the preferred securities, a shelf registration
covering resales of the preferred securities, the guarantee, the
debentures and the related common stock issuable upon conversion of the
preferred securities;
. use our best efforts to cause the shelf registration statement to be
declared effective under the Securities Act within 150 days after the
original issuance of the preferred securities; and
. use our best efforts to keep effective the shelf registration statement
for two years or such other period as required under Rule 144(k) of the
Securities Act or any successor rule thereto or, if earlier, such time as
all of the applicable securities have been sold thereunder.
We will provide to each holder for whom the shelf registration statement was
filed copies of the prospectus that is a part of the shelf registration
statement, notify each such holder when the shelf registration statement for
the securities has become effective and take certain other actions as are
required to permit unrestricted resales of the securities. A holder that sells
securities pursuant to the shelf registration statement will be required to be
named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the registration agreement that are applicable to
such a holder (including certain indemnification rights and obligations).
If (1) within 150 days of the original issuance of the preferred securities
the shelf registration statement has not been declared effective by the
Commission, or (2) if a shelf registration statement is declared effective by
the Commission and we or the trust fail to keep the shelf registration
statement continuously effective and usable (subject to some exceptions) for
the period required by the registration agreement, then additional interest,
referred to in this prospectus as special interest, will accrue on the
debentures, and corresponding special distributions will accrue on the
preferred securities and common securities, in each case from and including the
day following the registration default to but excluding the day on which the
registration default has been cured or has been deemed to have been cured.
Special interest and special distributions will be paid in cash quarterly in
arrears on each interest payment date commencing with the first interest
payment date following the applicable registration default and will accrue at a
rate so that the interest rate or distribution rate, as the case may, will be
increased 0.50% per annum of the principal amount or liquidation amount, as
applicable. Following the cure of a registration default, special interest and
special distributions will cease to accrue with respect to the applicable
registration default.
Each security will contain a legend to the effect that the holder of the
security, by its acceptance of the security, will be deemed to have agreed to
be bound by the provisions of the registration agreement.
The registration agreement is governed by, and construed in accordance with,
the laws of the State of New York. This summary of the registration agreement
is not complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the registration agreement. A form of the
registration agreement is available upon request.
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<PAGE>
SELLING HOLDERS
The preferred securities were originally issued by the trust and sold by
Credit Suisse First Boston Corporation, Goldman Sachs & Co., Salomon Smith
Barney Inc. and Dain Rauscher Incorporated (the "initial purchasers") in a
transaction exempt from the registration requirements of the Securities Act, to
persons reasonably believed by such initial purchasers to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act). The
holders named below and their transferees, pledgees, donees or successors
(collectively, the "Selling Holders") may from time to time offer and sell
pursuant to this prospectus any or all of the Preferred Securities, any
debentures and common stock issued upon conversion of the preferred securities.
The following table sets forth information, as of May 1, 2000, with respect
to the Selling Holders of the preferred securities and the respective number of
preferred securities beneficially owned by each Selling Holder that may be
offered pursuant to this prospectus.
<TABLE>
<CAPTION>
Principal Amount of
Preferred Number of Shares
Securities of Common Stock Number of Shares of
Beneficially Owned Owned Prior to Common Stock
Selling Holder and Offered Hereby the Offering(1) Offered Hereby(1)(2)
-------------- ------------------- ---------------- --------------------
<S> <C> <C> <C>
Allstate Insurance
Company................ $ 925,000 25,874 25,874
Alpine Associates....... $ 7,605,000 212,727 212,727
Alpine Partners, L.P.... $ 1,140,000 31,888 31,888
Bank of America Pension
Plan................... $ 2,250,000 62,937 62,937
BBT Fund, L.P........... $ 5,000,000 139,860 139,860
Bear, Stearns & Co.
Inc.................... $ 1,000,000 27,972 27,972
BNP Arbitrage SNC....... $ 2,755,000 77,062 77,062
Castle Convertible Fund,
Inc.................... $ 1,250,000 34,965 34,965
Credit Suisse First
Boston Corporation..... $ 6,373,450 178,278 178,278
Deeprock & Co........... $ 1,250,000 34,965 34,965
Deutsche Bank Securities
Inc.................... $11,675,000 326,573 326,573
Duckbill & Co........... $ 2,750,000 76,923 76,923
Forest Alternative
Strategies Fund II
L.P. Series A-5M....... $ 100,000 2,797 2,797
Forest Alternative
Strategies Fund II
L.P. Series A-5I....... $ 250,000 6,993 6,993
Forest Fulcrum Fund LP.. $ 1,350,000 37,762 37,762
Forest Global
Convertible Fund....... $ 6,417,850 179,520 179,520
Goldman Sachs and
Company................ $ 425,000 11,888 11,888
Highbridge International
LLC.................... $11,445,850 320,163 320,163
Lipper Convertibles,
L.P. .................. $ 2,500,000 69,930 69,930
Lipper Offshore
Convertibles, L.P. .... $ 2,250,000 62,937 62,937
Lipper Offshore
Convertibles, L.P.
#2 .................... $ 250,000 6,993 6,993
LLT Limited............. $ 300,000 8,391 8,391
Retail Clerks Pension
Trust.................. $ 2,750,000 76,923 76,923
Sylvan IMA Ltd.......... $ 1,250,000 34,965 34,965
Teacher's Insurance and
Annuity Association of
America................ $ 2,000,000 55,944 55,944
White River Securities,
LLC.................... $ 1,000,000 27,972 27,972
Subtotal.............. $76,262,150 2,133,202 2,133,202
----------- --------- ---------
Unnamed holders of
preferred securities or
any future transferees,
pledgees, donees or
successors of or from
any such named holder
(3) (4)................ $ 9,987,850 279,383 279,383
Total................. $86,250,000 2,412,585 2,412,585
</TABLE>
52
<PAGE>
- --------
(1) Comprises the shares of common stock into which the preferred securities
held by such Selling Holder are convertible at the initial conversion
price. The conversion price and the number of shares of common stock
issuable upon conversion of the preferred securities are subject to
adjustment under certain circumstances. Accordingly, the number of shares
of common stock issuable upon conversion of the Preferred Securities may
increase or decrease from time to time. Fractional shares will not be
issued upon conversion of the preferred securities; rather, cash will be
paid in lieu of fractional shares, if any.
(2) Assumes the offering of such shares by such Selling Holder pursuant to the
registration statement of which this prospectus forms a part.
(3) No such holder may offer preferred securities or common stock pursuant to
the registration statement of which this prospectus from a part until such
holder is included as a Selling Holder in a supplement to this prospectus.
(4) Assumes that the unnamed holders of preferred securities or common stock or
any future transferees, pledgees, donees or successors of or from any such
named holder do not beneficially own any common stock other than the common
stock issuable upon conversion of the preferred securities at the initial
conversion price.
The following table sets forth information with respect to the selling
stockholder and the number of shares of common stock beneficially owned by him
that may be offered under this prospectus. The selling stockholder acquired
these shares in private placement transactions and has contractual rights to
include resales of his shares in this prospectus.
<TABLE>
<CAPTION>
Number
of
Shares
That
May Be
Selling Stockholder Sold
------------------- -------
<S> <C>
Ted Collins, Jr......................................................... 173,268
-------
</TABLE>
Except for Ted Collins, Jr., who is a director of the Company, none of the
Selling Holders has, or within the past three years has had, any position,
office or other material relationship with the trust or Hanover or any of their
respective predecessors or affiliates.
Because the Selling Holders may, pursuant to this prospectus, offer all or
some portion of the preferred securities or common stock they presently hold,
no estimate can be given as to the amount of the preferred securities or shares
of common stock that will be held by the Selling Holders upon termination of
any such sales. In addition, the Selling Holders identified above may have
sold, transferred or otherwise disposed of all or a portion of their preferred
securities or common stock since the date on which they provided the
information regarding their preferred securities or common stock, in
transaction exempt from the registration requirements of the Securities Act.
Only Selling Holders identified above who beneficially own the preferred
securities or common stock set forth opposite each such Selling Holder's name
in the foregoing table on the effective date of the registration statement of
which this prospectus forms a part may sell such preferred securities or common
stock pursuant to the registration statement. We may from time to time include
additional Selling Holders in supplements to this prospectus.
We will pay the expenses of registering the preferred securities and common
stock being sold hereunder.
53
<PAGE>
PLAN OF DISTRIBUTION
The securities offered hereby (the "offered securities") may be sold from
time to time to purchasers directly by the Selling Holders. Alternatively, the
Selling Holders may from time to time offer the offered securities to or
through underwriters, broker/dealers or agents, who may receive compensation in
the form of underwriting discounts, concessions or commissions from the Selling
Holders or the purchasers of such offered securities for whom they may act as
agents. The Selling Holders and any underwriters, broker/dealers or agents that
participate in the distribution of offered securities may be deemed to be
"underwriters" within the meaning of the Securities Act and any profit on the
sale of such securities by them and any underwriter, broker/dealer or agent may
be deemed to be underwriting discounts and commissions under the Securities
Act.
The offered securities may be sold by the Selling Holders from time to time,
in one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale or at negotiated
prices. Such prices will be determined by the Selling Holders. The sale of the
offered securities may be effected in transactions (which may involve crosses
or block transactions) (i) on any national securities exchange or quotation
service on which the offered securities may be listed or quoted at the time of
sale, (ii) in the over-the-counter market, (iii) otherwise than on such
exchanges or in the over-the-counter market or (iv) through the writing of
options. At the time a particular offering of the offered securities is made,
if required, a prospectus supplement will be distributed which will set forth
the names of the Selling Holders, the aggregate amount and type of offered
securities being offered, and, to the extent required, the terms of the
offering, including the name or names of any underwriters, broker/dealers or
agents, any discounts, commissions and other terms constituting compensation
from the Selling Holders and any discounts, commissions or concessions allowed
or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the offered securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the offered securities may not be offered or sold unless they
have been registered or qualified for sale in such jurisdictions or any
exemption from registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the offered securities may be limited in its
ability to engage in market activities with respect to such securities. In
addition and without limiting the foregoing, each Selling Holder will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, which provisions may limit the timing of purchases and
sales of any of the offered securities by the Selling Holders. All of the
foregoing may affect the marketability of the offered securities.
Pursuant to the registration rights agreement, all expenses of the
registration of the offered securities will be paid by the Company, including,
without limitation, Commission filing fees and expenses of compliance with
state securities or "blue sky" laws. The Selling Holders will pay any
underwriting discounts and selling commissions. The Selling Holders will be
indemnified by us and the trust, jointly and severally, against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith. We and the trust will be
indemnified by the Selling Holders severally against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
Pursuant to the registration rights agreement, we are required to use our
best efforts to keep the registration statement continuously effective for a
period of two years from its effective date or such shorter period that will
terminate upon the earlier of the date on which the offered securities shall
have been sold pursuant to the Registration Statement or the date on which the
offered Securities are permitted to be freely sold or distributed to the public
pursuant to any exemption from the registration requirements of the Securities
Act (including in reliance on Rule 144(k) but excluding in reliance on Rule
144A under the Securities Act). Notwithstanding these obligations, we may,
under certain circumstances, postpone or suspend the filing or the
effectiveness of the registration statement (or any amendments or supplements
thereto) or the sale of offered securities under the registration statement.
54
<PAGE>
The selling stockholder acquired his shares of common stock in private
placement transactions. As part of these transactions, we entered into
agreements that granted the selling stockholder rights to include resales of
his shares in this prospectus. These agreements provide for cross-
indemnification provisions similar to those in the registration rights
agreement discussed above. The selling stockholder may distribute his shares in
the same manner as the shares of common stock underlying the preferred
securities may be distributed.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the preferred
securities will be passed upon for the trust by Morris, Nichols, Arsht &
Tunnell, Wilmington, Delaware, special Delaware counsel to the trust and
Hanover. The validity of the debentures and the guarantee will be passed upon
by Latham & Watkins, Chicago, Illinois. Certain matters relating to United
States federal income tax considerations will be passed upon for Hanover by
Latham & Watkins, Chicago, Illinois.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to our Annual Report on Form 10-K for the year ended December 31,
1999, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
55
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with the
distribution of the securities covered by this Registration Statement. All of
the expenses will be borne by the Company except as otherwise indicated.
<TABLE>
<S> <C>
Registration fee................................................ $ 25,488
Fees and expenses of accountants................................ 110,000
Fees and expenses of legal counsel.............................. 299,000
Fees and expenses of Trustee and counsel........................ 35,000
Printing and engraving expenses................................. 53,000
Miscellaneous................................................... 5,000
--------
Total....................................................... $527,488
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Company
The Company is empowered by Section 145 of the Delaware General Corporation
Law (the "DGCL"), subject to the procedures and limitations stated therein, to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that such person is or was a director, officer, employee or agent of
the company, or is or was serving at the request of the company as a director,
officer, employee or agent of another corporation or other enterprise, against
reasonable expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually incurred by him in connection with such action,
suit or proceeding, if such director, officer, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
Company is required by Section 145 to indemnify any person against reasonable
expenses (including attorneys' fees) actually incurred by him in connection
with an action, suit or proceeding in which he is a party because he is or was
a director, officer, employee or agent of the company or is or was serving at
the request of the company as a director, officer, employee or agent of another
corporation or other enterprise, if he has been successful, on the merits or
otherwise, in the defense of the action, suit or proceeding. Section 145 also
allows a corporation to purchase and maintain insurance or on behalf of any
such person against any liability asserted against him in any such capacity, or
arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under the provisions of
Section 145. In addition, Section 145 provides that indemnification pursuant to
its provisions is not exclusive of other rights of indemnification to which a
person may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise.
Article Eighth of the Company's charter provides that the Company shall
indemnify and hold harmless all officers and directors of the Company, and
advance expenses reasonably incurred by such officers and directors in
defending any civil, criminal, administrative or investigative action, suit or
proceeding, in accordance with and to the fullest extent permitted by Section
145 of the DGCL.
The Trust
The Declaration of Trust (the "Declaration") provides that no Trustee,
affiliate of any Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee, or any employee
or agent of the Trust or its affiliates (each an "Indemnified Person") shall be
liable, responsible or
II-1
<PAGE>
accountable in damages or otherwise to any officer, director, shareholder,
partner, member, representative or agent of the Trust, any affiliate of the
Trust or any holder of Trust Securities 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 authority conferred on
such Indemnified Person by the 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. The directors and officers of the Company and the
Regular Trustees are covered by insurance policies indemnifying them against
certain liabilities, including certain liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), which might be incurred by them
in such capacities and against which they cannot be indemnified by the Company
or the Trust. The Selling Holders will be indemnified by the Company and the
Trust, jointly and severally, against certain civil liabilities, including
certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith. The Company and the Trust will be
indemnified by the Selling Holders severally against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
Item 16. Exhibits.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
in parenthesis:
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.1 Certificate of Incorporation of Hanover Compressor Holding Co.
(incorporated by reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1999).
4.2 Certificate of Amendment to Certificate of Incorporation of Hanover
Compressor Holding Co. dated December 9, 1999 (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1999).
4.3 Bylaws of Hanover Compressor Company (incorporated by reference to
Exhibit No. 3.3 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1999).
4.4 Certificate of Trust of Hanover Compressor Capital Trust.*
4.5 Amended and Restated Declaration of Trust of Hanover Compressor
Capital Trust, dated as of December 15, 1999, among Hanover
Compressor Company, as sponsor, Wilmington Trust Company, as property
trustee, and Richard S. Meller, William S. Goldberg and Curtis A.
Bedrich, as administrative trustees.*
4.6 Indenture for the Convertible Junior Subordinated Debentures due
2029, dated as of December 15, 1999 among Hanover Compressor Company,
as issuer, and Wilmington Trust Company, as trustee.*
4.7 Form of Hanover Compressor Company Common Stock certificate
(incorporated by reference to Exhibit 4.11 to the Company's
Registration Statement on Form S-1 (File No. 333-27953), as
amended).*
4.8 Form of Hanover Compressor Capital Trust 7 1/4% Convertible Preferred
Securities (included in Exhibit 4.5).*
4.9 Form of Hanover Compressor Company Convertible Subordinated Junior
Debentures due 2029 (included in Exhibit 4.6).*
4.10 Preferred Securities Guarantee dated as of December 15, 1999, between
Hanover Compressor Company, as guarantor, and Wilmington Trust
Company, as guarantee trustee.*
4.11 Common Securities Guarantee dated as of December 15, 1999, by Hanover
Compressor Company, as guarantor.*
5.1 Opinion of Latham & Watkins as to the validity of the debentures and
the guarantee.
5.2 Opinion of Morris, Nichols, Arsht & Tunnell as to certain matters of
Delaware law.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
8.1 Opinion of Latham & Watkins as to certain tax matters.
10.1 Registration Rights Agreement dated as of December 15, 1999, by and
among Hanover Compressor Capital Trust, Hanover Compressor Company and
Credit Suisse First Boston Corporation.*
12.1 Statement Regarding Computation of Ratios (incorporated by reference
to Exhibit 12.1 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1999).
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Latham & Watkins (included in the opinions filed as
Exhibits 5.1 and 8.1).
24.1 Powers of Attorney (included on the signature page of the initial
filing of this Registration Statement).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as indenture trustee
under the Indenture relating to the Convertible Junior Subordinated
Debentures due 2029 of Hanover Compressor Company.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as property trustee
under the Amended and Restated Declaration of Trust of Hanover
Compressor Capital Trust.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as preferred guarantee
trustee under the Preferred Securities Guarantee.
</TABLE>
- --------
* Previously filed.
Item 17. Undertakings
(a) The registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those clauses is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by the Company
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The registrant hereby undertakes that:
(1) That for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of a registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) That, for purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at hat time shall be deemed to be the
initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the provisions set forth in Item 15, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, subject to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(e) The registrant hereby undertakes to file an application for the purpose
of determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act ("Act") in accordance with the rules and
regulations prescribed by the Commission under Section 305(6)(2) of the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Hanover Compressor Company certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on May 3, 2000.
HANOVER COMPRESSOR COMPANY
/s/ Michael J. McGhan
By: _________________________________
MICHAEL J. MCGHAN
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Michael J. McGhan and William S. Goldberg or
either of them, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 3rd day of May, 2000.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ Michael J. McGhan President and Chief Executive Officer
______________________________________ (Principal Executive Officer and Director)
Michael J. McGhan
/s/ William S. Goldberg Chief Financial Officer and Director
______________________________________ (Principal Financial and Accounting
William S. Goldberg Officer)
/s/ Ted Collins, Jr. Director
______________________________________
Ted Collins, Jr.
/s/ Robert R. Furgason Director
______________________________________
Robert R. Furgason
/s/ Melvyn N. Klein Director
______________________________________
Melvyn N. Klein
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ Michael A. O'Connor Director
______________________________________
Michael A. O'Connor
/s/ Alvin V. Shoemaker Director
______________________________________
Alvin V. Shoemaker
</TABLE>
Pursuant to the Securities Act of 1933, as amended, Hanover Compressor
Capital Trust has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on May 3, 2000.
HANOVER COMPRESSOR COMPANY
/s/ William S. Goldberg
By: _________________________________
WILLIAM S. GOLDBERG
AS ADMINISTRATIVE TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated on May 3, 2000.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ William S. Goldberg Administrative Trustee
______________________________________
William S. Goldberg
/s/ Richard S. Meller Administrative Trustee
______________________________________
Richard S. Meller
/s/ Curtis Bedrich Administrative Trustee
______________________________________
Curtis Bedrich
</TABLE>
II-6
<PAGE>
EXHIBIT 5.1
[Letterhead of Latham & Watkins appears here]
May 4, 2000
Hanover Compressor Company
Hanover Compressor Capital Trust
12001 N. Houston Rosslyn
Houston, Texas 77086
Re: Hanover Compressor Company
Hanover Compressor Capital Trust
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 (File No.
333-30344), filed by Hanover Compressor Company, a Delaware corporation (the
"Company"), and Hanover Compressor Capital Trust, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), filed on February
14, 2000 and amended by Amendment No. 1 on May 4, 2000 (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), you have requested our
opinion with respect to the matters set forth below. The Registration Statement
relates to the registration of: (i) 1,725,000 7 1/4% Convertible Preferred
Securities (liquidation amount $50 per Convertible Preferred Security) (the
"Convertible Preferred Securities") representing undivided preferred beneficial
ownership interests in the assets of the Trust; (ii) Convertible Junior
Subordinated Debentures due 2029 (the "Convertible Junior Subordinated
Debentures") of the Company, which may be distributed under certain
circumstances to the holders of the Convertible Preferred Securities; (iii) the
shares of common stock, par value $.001 per share (the "Common Stock"), of the
Company, issuable upon conversion of the Convertible Preferred Securities and
the Convertible Junior Subordinated Debentures; (iv) the Preferred Securities
Guarantee of the Company (as defined below); and (v) 173,268 shares of Common
Stock held by Ted Collins, Jr., one of the Company's stockholders (the "Selling
Stockholder Shares").
<PAGE>
LATHAM & WATKINS
Hanover Compressor Company
Hanover Compressor Capital Trust
May 4, 2000
Page 2
The Convertible Preferred Securities were issued pursuant to the
Amended and Restated Declaration of Trust (the "Declaration"), dated as of
December 15, 1999, among the Company, as sponsor, Wilmington Trust Company, as
property trustee (the "Property Trustee"), Wilmington Trust Company (Delaware),
as Delaware trustee (the "Delaware Trustee"), and William S. Goldberg, Curtis A.
Bedrich and Richard S. Meller, as administrative trustees (together with the
Property Trustee and the Delaware Trustee, the "Regular Trustees"). Capitalized
terms used but not otherwise defined herein have the meanings ascribed to them
in the Registration Statement.
In our capacity as your counsel in connection with such registration,
we are generally familiar with the proceedings taken by the Company in
connection with: (i) the authorization and issuance of the Convertible Preferred
Securities; (ii) the authorization and issuance of the Convertible Junior
Subordinated Debentures; (iii) the authorization of the Common Stock issuable
upon conversion of the Convertible Preferred Securities and the Convertible
Junior Subordinated Debentures; (iv) the execution and delivery of the Preferred
Securities Guarantee Agreement, dated as of December 15, 1999, (the "Preferred
Securities Guarantee"), between the Company and Wilmington Trust Company, as
trustee; and (v) the authorization and issuance of the Selling Stockholder
Shares. In addition, we have made an examination of originals or copies
certified or otherwise identified to our satisfaction, of all such documents,
corporate records and instruments of the Company as we have deemed necessary or
appropriate for purposes of this opinion.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company and the Trust, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. We have also assumed that the performance by the
Company of its obligations under the Indenture and the Preferred Securities
Guarantee do not and will not violate or constitute a default under (i) any
agreement or instrument to which the Company or its properties are subject, (ii)
any law, rule, or regulation to which the Company is subject, (iii) any judicial
or regulatory order or decree of any governmental authority or (iv) any consent,
approval, license, authorization or validation of, or filing, recording or
registration with any governmental authority. As to any facts material to the
opinions expressed herein which were not independently established or
<PAGE>
LATHAM & WATKINS
Hanover Compressor Company
Hanover Compressor Capital Trust
May 4, 2000
Page 3
verified, we have, with your consent, relied upon oral or written statements and
representations of officers, trustees and other representatives of the Company,
the Trust and others.
We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States, the internal laws of the State of New
York and the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or, in the case of Delaware, any other laws, as
to any matters of municipal law or the laws of any local agencies within any
state. With respect to the opinion given by Morris, Nichols, Arsht and Tunnell
in connection with the Registration Statement, as Delaware special counsel to
the Trustee and Delaware special counsel to the Guarantee Trustee, the Indenture
Trustee and the Property Trustee, we express no opinion with respect to any of
the matters addressed in such opinions.
Subject to the foregoing and the other qualifications set forth
herein, it is our opinion that, as to the date hereof:
1. The Preferred Securities Guarantee is a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms.
2. The Convertible Junior Subordinated Debentures are valid and
binding obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms.
3. The shares of Common Stock issuable upon conversion of the
Convertible Preferred Securities and the Convertible Junior Subordinated
Debentures have been duly authorized and reserved for issuance upon conversion
and, when issued upon conversion of the Convertible Preferred Securities and the
Convertible Junior Subordinated Debentures, such shares of Common Stock will be
validly issued, fully paid and nonassessable.
4. The Selling Stockholder Shares have been duly authorized, validly
issued and are fully paid and nonassessable.
The opinions rendered in paragraphs 1 and 2 above are subject to the
following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors; (ii) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or law; (iii) the unenforceability under
certain circumstances under law or court decisions of provisions providing for
the indemnification of or contribution to a party with respect to liability
where such indemnification or contribution is contrary to public policy; and
(iv) we express no opinion concerning the enforceability of the waiver of rights
or defenses contained in Section 5.15 of the Indenture.
<PAGE>
LATHAM & WATKINS
Hanover Compressor Company
Hanover Compressor Capital Trust
May 4, 2000
Page 4
To the extent that the obligations of the Company under the Indenture
or the Preferred Securities Guarantee may be dependent upon such matters, we
assume for purposes of this opinion that Wilmington Trust Company (in its
capacity as Debenture Trustee and as Guarantee Trustee) ("Wilmington") is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; that Wilmington is duly qualified to engage in
the activities contemplated by the Indenture and the Preferred Securities
Guarantee; that each of the Indenture and the Preferred Securities Guarantee has
been duly authorized, executed and delivered by Wilmington (in each case, in its
capacity as trustee thereunder) and constitutes a legal, valid, binding and
enforceable obligation of Wilmington (in such capacity) in accordance with its
terms; and Wilmington is in compliance, generally and with respect to acting as
trustee under the Indenture and under the Guarantee, with all applicable laws
and regulations; and that Wilmington has the requisite organizational and legal
power and authority to perform its obligations under the Indenture and under the
Preferred Securities Guarantee.
We have not been requested to express and, with your knowledge and
consent, do not render any opinion as to the obligations of the Company under
the Indenture, the Convertible Junior Subordinated Debentures or the Preferred
Securities Guarantee of Section 548 of the United States Bankruptcy Code or
applicable state law (including, without limitation, Article 10 of the New York
Debtor and Creditor Law) relating to fraudulent transfers and obligations.
You are hereby advised that an individual who is of counsel to our
firm serves as an officer of the Company and certain subsidiaries of the
Company. In addition, certain partners of our firm are direct owners of equity
securities of the Company.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Registration Statement.
Very truly yours,
/s/ LATHAM & WATKINS
<PAGE>
EXHIBIT 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
May 4, 2000
Hanover Compressor Capital Trust
c/o Hanover Compressor Company
12001 North Houston Rosslyn
Houston, Texas 77086
Re: Hanover Compressor Capital Trust
---------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to Hanover Compressor Capital Trust,
a Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the preparation of Registration Statement No. 333-30344 (and
the Prospectus forming a part thereof) on Form S-3 filed with the Securities and
Exchange Commission (the "Commission") on ) May 4, 2000, as amended by Pre-
Effective Amendment No. 1 thereto (as so amended, the "Registration Statement"),
by the Trust and Hanover Compressor Company (the "Company"), relating to the
registration with the Commission of the Preferred Securities of the Trust.
The Preferred Securities have been issued pursuant to (i) a Purchase Agreement
dated as of December 9, 1999 (the "Purchase Agreement") among the purchasers
named therein (the "Purchasers"), the Trust and the Company, and (ii) the
Amended and Restated Declaration of Trust of the Trust dated as of December 15,
1999 (the "Governing Instrument"). Capitalized terms used herein and not
otherwise herein defined are used as defined in the Governing Instrument.
In rendering this opinion, we have examined and relied upon copies of the
following documents in the forms provided to us: the Certificate of Trust of
the Trust as filed in the Office of the Secretary of State of the State of
Delaware (the "State Office") on December 1, 1999 (the "Certificate"); a
Declaration of Trust of the Trust dated as of December 1, 1999 (the "Original
Governing Instrument"); the Governing Instrument; the Indenture dated as of
December 15, 1999 between the Company and Wilmington Trust Company, as Trustee;
the Preferred Securities Guarantee Agreement dated as of December 15, 1999
between the Company and Wilmington Trust Company, as Trustee; the Purchase
Agreement; the Trust's Confidential Offering Circular dated December 9, 1999
relating to the Securities (the "Offering Circular"); the Registration Rights
Agreement dated December 15, 1999 among the Trust, the Company and the
<PAGE>
Hanover Compressor Capital Trust
May 4, 2000
Page 2
Purchasers; the Registration Statement; and a certification of good standing of
the Trust obtained as of a recent date from the State Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as drafts or copies or
forms of documents to be executed and the legal capacity of natural persons to
complete the execution of documents. We have further assumed for purposes of
this opinion: (i) the due formation or organization, valid existence and good
standing of each entity (other than the Trust) that is a signatory to any of the
documents reviewed by us under the laws of the jurisdiction of its respective
formation or organization; (ii) the due authorization, execution and delivery
by, or on behalf of, each of the signatories thereto of the above-referenced
documents (including, without limitation, the due authorization, execution and
delivery of the Governing Instrument and the Purchase Agreement prior to the
first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate that would cause a dissolution or
liquidation of the Trust under the Original Governing Instrument or the
Governing Instrument, as applicable; (iv) that the activities of the Trust have
been and will be conducted in accordance with the Original Governing Instrument
or the Governing Instrument, as applicable, and the Delaware Business Trust Act,
12 Del. C. (S)(S) 3801 et seq. (the "Delaware Act"); (v) that the required
consideration for the Preferred Securities has been paid in accordance with the
terms and conditions of the Governing Instrument, the Offering Circular and the
Purchase Agreement and that the Preferred Securities have otherwise been issued
and sold to, and held or transferred by, the Preferred Securities Holders (and
any subsequent transferee), and all transfers have been made, in accordance with
the terms, conditions, requirements and procedures set forth in the Governing
Instrument, the Offering Circular and the Purchase Agreement; (vi) that the
Sponsor has directed the Administrative Trustees to take the actions
contemplated by Section 3.06(b) of the Governing Instrument; (vii) that none of
the Preferred Securities have been called for redemption, redeemed, converted or
exchanged or canceled (except in connection with a permitted transfer) and all
of the Preferred Securities remain outstanding; and (viii) that the documents
examined by us are in full force and effect, express the entire understanding of
the parties thereto with respect to the subject matter thereof and have not been
amended, supplemented or otherwise modified, except as herein referenced. No
opinion is expressed with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. We have not reviewed any
documents other than those identified above in connection with this opinion, and
we have assumed that there are no other documents that are contrary to or
inconsistent with the opinions expressed herein. Further, we have not
participated in the preparation of the Prospectus forming a part of the
Registration Statement or any other offering materials relating to the Preferred
Securities, and we assume no responsibility for their contents. As to any fact
material to our opinion, other than those assumed, we have relied without
independent investigation on the above-referenced documents and certificates and
on the accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and to the qualifications set forth
below, and limited in all respects to matters of Delaware law, it is our opinion
that:
1. The Trust is a duly formed and validly existing statutory business trust in
good standing under the laws of the State of Delaware.
<PAGE>
Hanover Compressor Capital Trust
May 4, 2000
Page 3
2. The Preferred Securities constitute validly issued, fully paid and
nonassessable beneficial interests in the assets of the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument, each
Preferred Security Holder of the Trust, in such capacity, 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, however, we express no opinion with respect to the
liability of any Preferred Security Holder who is, was or may become a named
Trustee of the Trust.
We note that pursuant to Section 11.04 of the Governing Instrument, the Trust
may withhold amounts otherwise distributable to a Preferred Security Holder and
pay over such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus. In giving this consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission thereunder. This opinion speaks only as of the
date hereof and is based on our understandings and assumptions as to present
facts, and on our review of the above-referenced documents and the application
of Delaware law as the same exist as of the date hereof, and we undertake no
obligation to update or supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
Jonathan I. Lessner
<PAGE>
EXHIBIT 8.1
[Letterhead of Latham & Watkins appears here]
May 4, 2000
Hanover Compressor Company
Hanover Compressor Capital Trust
12001 North Houston Rosslyn
Houston, Texas 77086
Re: Hanover Compressor Company and Hanover Compressor Capital Trust
Registration Statement on Form S-3
---------------------------------------------------------------
Ladies and Gentlemen:
We have acted as tax counsel to Hanover Compressor Company, a Delaware
corporation (the "Company"), and Hanover Compressor Capital Trust, a statutory
business trust formed under Delaware law (the "Trust"), in connection with the
preparation of a Registration Statement on Form S-3, filed by the Company
and the Trust with the Securities and Exchange Commission on February 14, 2000
and amended by Amendment No. 1 on May 4, 2000 (the "Registration Statement"),
relating to the registration under the Securities Act of 1933, as amended, of
(i) 1,725,000 7 1/4% Convertible Preferred Securities (liquidation amount $50
per convertible preferred security) (the "Convertible Preferred Securities"),
representing undivided preferred beneficial ownership interests in the assets of
the Trust; (ii) Convertible Junior Subordinated Debentures due 2029 (the
"Convertible Junior Subordinated Debentures") of the Company, which may be
distributed under certain circumstances to the holders of the Convertible
Preferred Securities; (iii) shares of common stock, par value $.001 per share
(the "Common Stock"), of the Company, issuable upon conversion of the
Convertible Preferred Securities and the Convertible Junior Subordinated
Debentures; (iv) the Preferred Securities Guarantee of the Company; and (v)
173,268 shares of Common Stock held by Ted Collins, Jr., one of the Company's
stockholders.
The Convertible Preferred Securities were issued pursuant to the
Amended and Restated Declaration of Trust (the "Declaration"), dated as of
December 15, 1999, among the Company, as sponsor, Wilmington Trust Company, as
property trustee, Wilmington Trust
<PAGE>
LATHAM & WATKINS
Hanover Compressor Company
Hanover Compressor Capital Trust
May 4, 2000
Page 2
Company (Delaware), as Delaware trustee, and the Administrative Trustees named
therein. Capitalized terms used but not otherwise defined herein have the
meanings ascribed to them in the Registration Statement.
You have requested our opinion concerning the statements in the
Registration Statement set forth under the caption "Federal Income Tax
Consequences." The facts as we understand them and upon which with your
permission we rely in rendering the opinion expressed herein, are set forth in
the Registration Statement.
In our capacity as tax counsel to the Company and the Trust, we have
made such legal and factual examinations and inquiries, including an examination
of originals or copies certified or otherwise identified to our satisfaction of
such documents, corporate records and other instruments as we have deemed
necessary or appropriate for purposes of this opinion. In our examination, we
have assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures thereon, the legal capacity of natural persons
executing such documents and the conformity to authentic original documents of
all documents submitted to us as copies. We have reviewed and relied upon the
Declaration, the Indenture, and such other documents as in our judgment were
necessary or appropriate to enable us to render the opinion contained herein.
We are opining herein as to the effect on the subject transaction only
of the Federal income tax laws of the United States and we express no opinion
with respect to the applicability thereto, or the effect thereon, of other
Federal laws, the laws of any state or other jurisdiction or as to any matters
of municipal law or the laws of any other local agencies within any state.
Based upon such facts, assumptions and representations, it is our
opinion that the statements in the Registration Statement set forth under the
caption "Federal Income Tax Consequences" to the extent such statements
constitute matters of law, summaries of legal matters or legal conclusions, have
been reviewed by us and are accurate in all material respects. No opinion is
expressed as to any matter not discussed herein.
This opinion is rendered to you as of the date hereof, and we
undertake no obligation to update this opinion subsequent to the date hereof.
This opinion is based on various statutory provisions, regulations promulgated
thereunder and interpretations thereof by the Internal Revenue Service and
courts having jurisdiction over such matters, all of which are subject to change
either prospectively or retroactively. Also, any variation or difference in the
facts, representations or assumptions recited or referred to hereinabove, could
affect the conclusions stated herein.
<PAGE>
LATHAM & WATKINS
Hanover Compressor Company
Hanover Compressor Capital Trust
May 4, 2000
Page 3
This opinion is furnished to you, and is for your use in connection
with the transactions set forth in the Registration Statement. This opinion may
not be relied upon by you for any other purpose, or furnished to, quoted to, or
relied upon by any other person, firm or corporation, for any purpose, without
our prior written consent. We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to the use of our name under the
caption "Legal Matters" in the Registration Statement.
Very truly yours,
/s/ Latham & Watkins
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Amendment No. 1 to
the Registration Statement on Form S-3 of our report dated March 8, 2000,
relating to the consolidated financial statements, which appears in Hanover
Compressor Company's Annual Report on Form 10-K for the year ended December 31,
1999. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
Houston, Texas
May 3, 2000
<PAGE>
EXHIBIT 25.1
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
HANOVER COMPRESSOR COMPANY
(Exact name of obligor as specified in its charter)
Delaware 76-0625124
(State of incorporation) (I.R.S. employer identification no.)
12001 North Houston Rosslyn
Houston, Texas 77086
(Address of principal executive offices) (Zip Code)
Convertible Junior Subordinated Debentures of Hanover Compressor Company
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 4th
day of May, 2000.
[SEAL] WILMINGTON TRUST COMPANY
Attest: /s/ Patricia A. Evans By: /s/ James P. Lawler
--------------------------- -------------------------
Name: Patricia A. Evans Name: James P. Lawler
--------------------- -------------------
Title: Assistant Secretary Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE>
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or
2
<PAGE>
agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to be appointed
as such trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of the
Corporation upon such securities and in such manner as it may think
fit and
3
<PAGE>
proper, and from time to time to vary or realize such investments; to
issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion of
its said corporate business of investment and to the extent authorized
by law, to lease, purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any name and nature
and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by the
laws of the State of Delaware, it is hereby expressly provided that the said
Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and
4
<PAGE>
clauses contained in this paragraph shall (except where otherwise
expressed in said paragraph) be nowise limited or restricted by
reference to or inference from the terms of any other clause of this
or any other paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this paragraph shall be
regarded as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes
5
<PAGE>
or of any series of the same or any other class or classes of stock of
the Corporation and the terms and conditions of such conversion or
exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such
6
<PAGE>
resolution or resolutions as may be adopted by the Board of Directors
pursuant to section (b) of this Article Fourth, each holder of Common
Stock shall have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article Fourth and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
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consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number of directors constituting the whole Board
shall be twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall
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be made by notice in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the Corporation not less
than 14 days nor more than 50 days prior to any meeting of the stockholders
called for the election of directors; provided, however, that if less than
21 days' notice of the meeting is given to stockholders, such written
notice shall be delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following the day
on which notice of the meeting was mailed to stockholders. Notice of
nominations which are proposed by the Board of Directors shall be given by
the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
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Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of the
State of Delaware at such places as may be from time to time designated by
them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
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(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to in any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation or
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
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(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the
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purposes of this Article Fifteenth on the basis of information known
to them, (1) the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate of another,
(3) whether a person has an agreement, arrangement or understanding
with another as to the matters referred to in paragraph (3) of section
(c), or (4) whether the assets subject to any business combination or
the consideration received for the issuance or transfer of securities
by the Corporation, or any Subsidiary has an aggregate fair market
value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 20, 2000
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank. No more than two Directors may also
be employees of the Company or any affiliate thereof.
<PAGE>
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971. The Chairman of the
Board of Directors shall not be qualified to continue to serve as a Director
upon the termination for any reason of his or her services in that office.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
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Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise
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all of the powers reserved to the Trust Committee under Article III Section 2
hereof. In the event of the unavailability, at such time, of a minimum of two
members of such Executive Committee, any three available directors shall
constitute the Executive Committee for the full conduct and management of the
affairs and business of the Company in accordance with the foregoing provisions
of this Section. This By-Law shall be subject to implementation by Resolutions
of the Board of Directors presently existing or hereafter passed from time to
time for that purpose, and any provisions of these By-Laws (other than this
Section) and any resolutions which are contrary to the provisions of this
Section or to the provisions of any such implementary Resolutions shall be
suspended during such a disaster period until it shall be determined by any
interim Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its affairs and
business under all of the other provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
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(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 4. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
-------------------------------
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.
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Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
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There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificates of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
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ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special
8
<PAGE>
services so performed reasonable compensation as may be determined by the Board
of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
-------- -------
that the payment of expenses incurred by a Director or officer in his capacity
as a Director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director or officer to
repay all amounts advanced if it should be ultimately determined that the
Director or officer is not entitled to be indemnified under this Article or
otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions
of this Article X shall not adversely affect any right or protection hereunder
of any person in respect of any act or omission occurring prior to the time of
such repeal or modification.
9
<PAGE>
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 4, 2000 By: /s/ James P. Lawler
-----------------------------
Name: James P. Lawler
------------------------
Title:Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved by
any state banking authorities. Refer to your appropriate state banking
authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ----------
Name of Bank City
in the State of DELAWARE, at the close of business on December 31, 1999.
--------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions
Noninterest-bearing balances and currency and coins................... 213,700
Interest-bearing balances................................................... 0
Held-to-maturity securities.............................................. 30,232
Available-for-sale securities......................................... 1,628,889
Federal funds sold and securities purchased under agreements to
resell.............................................................. 390,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 4,374,777
LESS: Allowance for loan and lease losses........... 71,368
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve.... 4,303,409
Assets held in trading accounts............................................... 0
Premises and fixed assets (including capitalized leases)................ 122,273
Other real estate owned..................................................... 576
Investments in unconsolidated subsidiaries and associated companies....... 1,511
Customers' liability to this bank on acceptances outstanding.................. 0
Intangible assets......................................................... 5,100
Other assets............................................................ 133,449
Total assets.......................................................... 6,829,789
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................................. 5,186,079
Noninterest-bearing...................... 986,667
Interest-bearing......................... 4,199,412
Federal funds purchased and Securities sold under agreements to
repurchase.......................................................... 269,343
Demand notes issued to the U.S. Treasury................................ 95,000
Trading liabilities (from Schedule RC-D)..................................... 0
Other borrowed money:................................................. ///////
With original maturity of one year or less........................... 670,000
With original maturity of more than one year.......................... 43,000
Bank's liability on acceptances executed and outstanding..................... 0
Subordinated notes and debentures............................................ 0
Other liabilities (from Schedule RC-G)................................. 151,436
Total liabilities.................................................... 6,414,858
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common Stock............................................................... 500
Surplus (exclude all surplus related to preferred stock)................ 62,118
Undivided profits and capital reserves................................. 386,485
Net unrealized holding gains (losses) on available-for-sale securities..(34,172)
Total equity capital................................................... 414,931
Total liabilities, limited-life preferred stock, and equity capital...6,829,789
2
<PAGE>
EXHIBIT 25.2
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
HANOVER COMPRESSOR COMPANY
HANOVER COMPRESSOR CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware 76-0625124
Delaware Applied For
(State of incorporation) (I.R.S. employer identification no.)
12001 North Houston Rosslyn
Houston, Texas 77086
(Address of principal executive offices) (Zip Code)
7 1/4% Convertible Preferred Securities of Hanover Compressor Capital Trust
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 4th
day of May, 2000.
[SEAL] WILMINGTON TRUST COMPANY
Attest: /s/ Patricia A. Evans By: /s/ James P. Lawler
---------------------------- ---------------------------
Name: Patricia A. Evans Name: James P. Lawler
--------------------- -----------------------
Title: Assistant Secretary Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE>
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or
2
<PAGE>
agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to be appointed
as such trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of the
Corporation upon such securities and in such manner as it may think
fit and
3
<PAGE>
proper, and from time to time to vary or realize such investments; to
issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion of
its said corporate business of investment and to the extent authorized
by law, to lease, purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any name and nature
and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by the
laws of the State of Delaware, it is hereby expressly provided that the said
Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and
4
<PAGE>
clauses contained in this paragraph shall (except where otherwise
expressed in said paragraph) be nowise limited or restricted by
reference to or inference from the terms of any other clause of this
or any other paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this paragraph shall be
regarded as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes
5
<PAGE>
or of any series of the same or any other class or classes of stock of
the Corporation and the terms and conditions of such conversion or
exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such
6
<PAGE>
resolution or resolutions as may be adopted by the Board of Directors
pursuant to section (b) of this Article Fourth, each holder of Common
Stock shall have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article Fourth and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
7
<PAGE>
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number of directors constituting the whole Board
shall be twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall
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be made by notice in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the Corporation not less
than 14 days nor more than 50 days prior to any meeting of the stockholders
called for the election of directors; provided, however, that if less than
21 days' notice of the meeting is given to stockholders, such written
notice shall be delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following the day
on which notice of the meeting was mailed to stockholders. Notice of
nominations which are proposed by the Board of Directors shall be given by
the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
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Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of the
State of Delaware at such places as may be from time to time designated by
them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
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(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to in any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation or
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
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(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the
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purposes of this Article Fifteenth on the basis of information known
to them, (1) the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate of another,
(3) whether a person has an agreement, arrangement or understanding
with another as to the matters referred to in paragraph (3) of section
(c), or (4) whether the assets subject to any business combination or
the consideration received for the issuance or transfer of securities
by the Corporation, or any Subsidiary has an aggregate fair market
value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 20, 2000
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank. No more than two Directors may also
be employees of the Company or any affiliate thereof.
<PAGE>
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971. The Chairman of the
Board of Directors shall not be qualified to continue to serve as a Director
upon the termination for any reason of his or her services in that office.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
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Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise
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all of the powers reserved to the Trust Committee under Article III Section 2
hereof. In the event of the unavailability, at such time, of a minimum of two
members of such Executive Committee, any three available directors shall
constitute the Executive Committee for the full conduct and management of the
affairs and business of the Company in accordance with the foregoing provisions
of this Section. This By-Law shall be subject to implementation by Resolutions
of the Board of Directors presently existing or hereafter passed from time to
time for that purpose, and any provisions of these By-Laws (other than this
Section) and any resolutions which are contrary to the provisions of this
Section or to the provisions of any such implementary Resolutions shall be
suspended during such a disaster period until it shall be determined by any
interim Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its affairs and
business under all of the other provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
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(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 4. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
-------------------------------
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.
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Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
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There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificates of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
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ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special
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services so performed reasonable compensation as may be determined by the Board
of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
-------- -------
that the payment of expenses incurred by a Director or officer in his capacity
as a Director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director or officer to
repay all amounts advanced if it should be ultimately determined that the
Director or officer is not entitled to be indemnified under this Article or
otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions
of this Article X shall not adversely affect any right or protection hereunder
of any person in respect of any act or omission occurring prior to the time of
such repeal or modification.
9
<PAGE>
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 4, 2000 By: /s/ James P. Lawler
---------------------------
Name: James P. Lawler
--------------------
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved by
any state banking authorities. Refer to your appropriate state banking
authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ----------
Name of Bank City
in the State of DELAWARE, at the close of business on December 31, 1999.
--------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions
Noninterest-bearing balances and currency and coins................... 213,700
Interest-bearing balances................................................... 0
Held-to-maturity securities.............................................. 30,232
Available-for-sale securities......................................... 1,628,889
Federal funds sold and securities purchased under agreements to
resell.............................................................. 390,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 4,374,777
LESS: Allowance for loan and lease losses........... 71,368
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve.... 4,303,409
Assets held in trading accounts............................................... 0
Premises and fixed assets (including capitalized leases)................ 122,273
Other real estate owned..................................................... 576
Investments in unconsolidated subsidiaries and associated companies....... 1,511
Customers' liability to this bank on acceptances outstanding.................. 0
Intangible assets......................................................... 5,100
Other assets............................................................ 133,449
Total assets.......................................................... 6,829,789
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................................. 5,186,079
Noninterest-bearing...................... 986,667
Interest-bearing......................... 4,199,412
Federal funds purchased and Securities sold under agreements to
repurchase.......................................................... 269,343
Demand notes issued to the U.S. Treasury................................ 95,000
Trading liabilities (from Schedule RC-D)..................................... 0
Other borrowed money:................................................. ///////
With original maturity of one year or less........................... 670,000
With original maturity of more than one year.......................... 43,000
Bank's liability on acceptances executed and outstanding..................... 0
Subordinated notes and debentures............................................ 0
Other liabilities (from Schedule RC-G)................................. 151,436
Total liabilities.................................................... 6,414,858
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common Stock............................................................... 500
Surplus (exclude all surplus related to preferred stock)................ 62,118
Undivided profits and capital reserves................................. 386,485
Net unrealized holding gains (losses) on available-for-sale securities..(34,172)
Total equity capital................................................... 414,931
Total liabilities, limited-life preferred stock, and equity capital...6,829,789
2
<PAGE>
Exhibit 25.3
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service
HANOVER COMPRESSOR COMPANY
(Exact name of obligor as specified in its charter)
Delaware 76-0625124
(State of incorporation) (I.R.S. employer identification no.)
12001 North Houston Rosslyn
Houston, Texas 77086
(Address of principal executive offices) (Zip Code)
Guarantee of 7 1/4% Convertible Preferred Securities by Hanover Compressor
Company (Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 4th
day of May, 2000.
[SEAL] WILMINGTON TRUST COMPANY
Attest: /s/ Patricia A. Evans By: /s/ James P. Lawler
-------------------------- ----------------------
Name: Patricia A. Evans Name: James P. Lawler
------------------- ----------------------
Title: Assistant Secretary Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the
<PAGE>
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or
2
<PAGE>
agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to be appointed
as such trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of the
Corporation upon such securities and in such manner as it may think
fit and
3
<PAGE>
proper, and from time to time to vary or realize such investments; to
issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion of
its said corporate business of investment and to the extent authorized
by law, to lease, purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any name and nature
and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by the
laws of the State of Delaware, it is hereby expressly provided that the said
Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and
4
<PAGE>
clauses contained in this paragraph shall (except where otherwise
expressed in said paragraph) be nowise limited or restricted by
reference to or inference from the terms of any other clause of this
or any other paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this paragraph shall be
regarded as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes
5
<PAGE>
or of any series of the same or any other class or classes of stock of
the Corporation and the terms and conditions of such conversion or
exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such
6
<PAGE>
resolution or resolutions as may be adopted by the Board of Directors
pursuant to section (b) of this Article Fourth, each holder of Common
Stock shall have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article Fourth and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
7
<PAGE>
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number of directors constituting the whole Board
shall be twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall
8
<PAGE>
be made by notice in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the Corporation not less
than 14 days nor more than 50 days prior to any meeting of the stockholders
called for the election of directors; provided, however, that if less than
21 days' notice of the meeting is given to stockholders, such written
notice shall be delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following the day
on which notice of the meeting was mailed to stockholders. Notice of
nominations which are proposed by the Board of Directors shall be given by
the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
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Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of the
State of Delaware at such places as may be from time to time designated by
them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
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(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to in any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation or
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
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(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the
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purposes of this Article Fifteenth on the basis of information known
to them, (1) the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate of another,
(3) whether a person has an agreement, arrangement or understanding
with another as to the matters referred to in paragraph (3) of section
(c), or (4) whether the assets subject to any business combination or
the consideration received for the issuance or transfer of securities
by the Corporation, or any Subsidiary has an aggregate fair market
value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 20, 2000
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank. No more than two Directors may also
be employees of the Company or any affiliate thereof.
<PAGE>
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971. The Chairman of the
Board of Directors shall not be qualified to continue to serve as a Director
upon the termination for any reason of his or her services in that office.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
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Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise
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all of the powers reserved to the Trust Committee under Article III Section 2
hereof. In the event of the unavailability, at such time, of a minimum of two
members of such Executive Committee, any three available directors shall
constitute the Executive Committee for the full conduct and management of the
affairs and business of the Company in accordance with the foregoing provisions
of this Section. This By-Law shall be subject to implementation by Resolutions
of the Board of Directors presently existing or hereafter passed from time to
time for that purpose, and any provisions of these By-Laws (other than this
Section) and any resolutions which are contrary to the provisions of this
Section or to the provisions of any such implementary Resolutions shall be
suspended during such a disaster period until it shall be determined by any
interim Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its affairs and
business under all of the other provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
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(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 4. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
-------------------------------
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.
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Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
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There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificates of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
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ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special
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services so performed reasonable compensation as may be determined by the Board
of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
-------- -------
that the payment of expenses incurred by a Director or officer in his capacity
as a Director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director or officer to
repay all amounts advanced if it should be ultimately determined that the
Director or officer is not entitled to be indemnified under this Article or
otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions
of this Article X shall not adversely affect any right or protection hereunder
of any person in respect of any act or omission occurring prior to the time of
such repeal or modification.
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ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
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EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 4, 2000 By: /s/ James P. Lawler
-----------------------------------------
Name: James P. Lawler
----------------------------------
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved by
any state banking authorities. Refer to your appropriate state banking
authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ----------
Name of Bank City
in the State of DELAWARE, at the close of business on December 31, 1999.
--------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions
Noninterest-bearing balances and currency and coins................... 213,700
Interest-bearing balances................................................... 0
Held-to-maturity securities.............................................. 30,232
Available-for-sale securities......................................... 1,628,889
Federal funds sold and securities purchased under agreements to
resell.............................................................. 390,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 4,374,777
LESS: Allowance for loan and lease losses........... 71,368
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve.... 4,303,409
Assets held in trading accounts............................................... 0
Premises and fixed assets (including capitalized leases)................ 122,273
Other real estate owned..................................................... 576
Investments in unconsolidated subsidiaries and associated companies....... 1,511
Customers' liability to this bank on acceptances outstanding.................. 0
Intangible assets......................................................... 5,100
Other assets............................................................ 133,449
Total assets.......................................................... 6,829,789
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................................. 5,186,079
Noninterest-bearing...................... 986,667
Interest-bearing......................... 4,199,412
Federal funds purchased and Securities sold under agreements to
repurchase.......................................................... 269,343
Demand notes issued to the U.S. Treasury................................ 95,000
Trading liabilities (from Schedule RC-D)..................................... 0
Other borrowed money:................................................. ///////
With original maturity of one year or less........................... 670,000
With original maturity of more than one year.......................... 43,000
Bank's liability on acceptances executed and outstanding..................... 0
Subordinated notes and debentures............................................ 0
Other liabilities (from Schedule RC-G)................................. 151,436
Total liabilities.................................................... 6,414,858
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common Stock............................................................... 500
Surplus (exclude all surplus related to preferred stock)................ 62,118
Undivided profits and capital reserves................................. 386,485
Net unrealized holding gains (losses) on available-for-sale securities..(34,172)
Total equity capital................................................... 414,931
Total liabilities, limited-life preferred stock, and equity capital...6,829,789
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