<PAGE> 1
As filed with the Securities and Exchange Commission on July 14, 1999
Registration No. 333-21321
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------
LOUIS DREYFUS NATURAL GAS CORP. OKLAHOMA 73-1098614
LOUIS DREYFUS NATURAL GAS TRUST I DELAWARE TO BE APPLIED FOR
LOUIS DREYFUS NATURAL GAS TRUST II DELAWARE TO BE APPLIED FOR
(Exact name of registrants as (State or other (I.R.S. Employer
specified in their charters) jurisdiction of Identification Nos.)
incorporation or
organization)
14000 QUAIL SPRINGS PARKWAY, SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134-2600
405/749-1300
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------------------
JEFFREY A. BONNEY Copies To:
LOUIS DREYFUS NATURAL GAS CORP. MICHAEL M. STEWART, ESQ.
14000 QUAIL SPRINGS PARKWAY, SUITE 600 CROWE & DUNLEVY
OKLAHOMA CITY, OKLAHOMA 73134-2600 1800 MID-AMERICA TOWER
405/749-1300 OKLAHOMA CITY, OKLAHOMA 73102-8273
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
---------------------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement, as
determined by the Registrants.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]
<PAGE> 2
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. [ ]
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 Section 8(a), may
require.
<PAGE> 3
Subject to Completion, Dated July 14, 1999
PROSPECTUS
$400,000,000
LOUIS DREYFUS NATURAL GAS CORP.
LOUIS DREYFUS NATURAL GAS TRUST I
LOUIS DREYFUS NATURAL GAS TRUST II
The information in this LOUIS DREYFUS NATURAL GAS CORP.
prospectus is not complete We may offer and sell, in one or more
and may be changed. We may offerings:
not sell these securities * common stock
until the registration * preferred stock
statement filed with the * debt securities
Securities and Exchange The common stock of Louis Dreyfus Natural Gas
Commission is effective. This Corp. trades on the New York Stock Exchange
prospectus is not an offer to under the symbol "LD".
sell these securities and it
is not soliciting an offer to
buy these securities in any THE TRUSTS
state where the offer or sale The Trusts are each Delaware business trusts
is not permitted. that may offer and sell preferred securities
in one or more offerings. Each Trust will
use all of the proceeds from the sale of its
preferred securities to buy subordinated debt
securities of Louis Dreyfus Natural Gas Corp.
The Trust will receive cash payments from the
subordinated debt securities, which it will
distribute to the holders of its preferred
securities, which it will distribute to the
holders of its preferred securities. We will
unconditionally guarantee the Trusts'
obligation to distribute cash to the holder
of trust preferred securities, but only to
the extent the Trust has funds available to
make those payments and has not made the
payments.
THE OFFERING
The total offering price of the securities to
be offered by us or the Trusts, in the
aggregate, will not exceed $400,000,000. We
will provide the specific terms and the
initial public offering price for each
offering in a supplement to this prospectus.
You should carefully read this prospectus
and the supplement before you decide to
<PAGE> 4
invest. This prospectus may not be used to
sell securities unless accompanied by a
prospectus supplement.
------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
------------------------------
The date of this Prospectus is July 13, 1999
<PAGE> 5
TABLE OF CONTENTS
Page
About this Prospectus. . . . . . . . . . . . . . . . . . . . . . . . . 2
Certain Forward-Looking Statements . . . . . . . . . . . . . . . . . . 3
Louis Dreyfus Natural Gas Corp.. . . . . . . . . . . . . . . . . . . . 3
The Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . 4
Description of the Securities We May Offer . . . . . . . . . . . . . . 5
Description of Common Stock. . . . . . . . . . . . . . . . . . . . . . 7
Description of Preferred Stock . . . . . . . . . . . . . . . . . . . . 8
Description of Debt Securities . . . . . . . . . . . . . . . . . . . . 9
Description of the Trust Preferred Securities . . . . . . . . . . . . 19
Description of the Trust Preferred Securities Guarantee. . . . . . . . 25
Relationship among the Trust Preferred Securities, the Trust Preferred
Securities Guarantee and the Subordinated Debt Securities Held by
the Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 28
Validity of Offered Securities . . . . . . . . . . . . . . . . . . . . 29
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Where You Can Find More Information. . . . . . . . . . . . . . . . . . 30
Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . 31
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the Securities and Exchange Commission. By using a shelf registration
statement, we may sell, from time to time, in one or more offerings, any
combination of the securities described in this prospectus. The total dollar
amount of the securities we may sell through these offerings will not exceed
$400,000,000.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that contains more specific information about the terms of those
securities. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional information
described under the heading "Where You Can Find More Information."
This prospectus does not contain separate financial statements for the
Trusts. We do not believe these financial statements would be useful since the
Trusts will not have any independent function other than to issue common and
preferred securities and to purchase our subordinated debt securities. We will
provide a full, unconditional guarantee of each Trust's obligations under its
common and preferred securities. Each Trust is our direct or indirect
<PAGE> 6
wholly-owned subsidiary, and we file consolidated financial information under
the Securities Exchange Act of 1934.
You should rely only on the information contained or incorporated by
reference in this prospectus and the prospectus supplement. We have not, and
the underwriters have not, authorized any other person to provide you with
different information. If anyone provides you with different information, you
should not rely on it. We will not, and the underwriters will not, make an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information appearing in this
prospectus, as well as information we previously filed with the SEC and
incorporated by reference, is accurate as of the date on the front cover of
this prospectus only. Our business, financial condition, results of operations
and prospects may have changed since that date.
CERTAIN FORWARD-LOOKING STATEMENTS
All statements made or incorporated by reference in this prospectus other
than purely historical information are "forward-looking statements" within the
meaning of the federal securities laws. These statements reflect our current
expectations and are based on our historical operating trends, proved reserve
and fixed-price contract positions and other currently available information.
Forward-looking statements include statements regarding our future drilling
plans and objectives and related exploration and development budgets and
number and location of planned wells and statements regarding the quality of
our properties and potential reserve and production levels. These statements
assume that no significant changes will occur in the operating environment for
our oil and gas properties and that there will be no material acquisitions or
divestitures except as otherwise described.
The forward-looking statements are subject to all the risks and
uncertainties incident to the acquisition, exploration, development and
marketing of oil and gas reserves. Some of these risks are commodity price,
counterparty, environmental, drilling, reserves, operations and production
risks. Certain of these risks are described in the documents "incorporated by
reference" which you can obtain as described under "Where You Can Find More
Information." We may also make material acquisitions or divestitures, modify
our fixed-price contract positions or enter into financing transactions. None
of these can be predicted with certainty and are not taken into consideration
in the forward-looking statements.
Statements concerning fixed-price contract, interest rate swap and other
financial instrument fair values and their estimated contribution to our
future results of operations are based upon market information as of a
specific date. This market information is often a function of significant
judgment and estimation. Further, market prices for oil and gas and market
money rates are subject to significant volatility.
For all of the these reasons, our actual results may vary materially from
the forward-looking statements and there is no assurance that the assumptions
we have used are necessarily the most likely. We will not update any
<PAGE> 7
forward-looking statements to reflect events or circumstances occurring after
the date the statement is made.
LOUIS DREYFUS NATURAL GAS
Louis Dreyfus Natural Gas Corp. is one of the largest independent natural
gas companies engaged in the development, exploration, acquisition, production
and marketing of natural gas and crude oil in the United States.
The address of our principal executive offices is 14000 Quail Springs
Parkway, Suite 600, Oklahoma City, OK 73134-2600, and our telephone number is
(405) 749-1300.
THE TRUSTS
Each of the Trusts is a statutory business trust formed under Delaware
law by (a) a separate declaration of trust executed by Louis Dreyfus Natural
Gas, as depositor, and the trustees (described below) for the trust and (b)
the filing of a certificate of trust with the Delaware Secretary of State.
Each Trust's declaration will be amended and restated substantially in the
form filed as an exhibit to the registration statement as of the date the
securities of that Trust are initially issued. Each amended declaration will
be qualified as an indenture under the Trust Indenture Act of 1939.
Each Trust exists solely for the purposes of:
* issuing preferred securities and common securities representing
undivided beneficial interests in the assets of that Trust;
* investing the proceeds of those securities issuances in our junior
subordinated debt securities; and
* engaging only in other incidental activities.
The rights of the holders of the trust securities, including economic
rights, rights to information and voting rights, are set forth in the amended
declaration of each Trust, the Delaware Business Trust Act and the Trust
Indenture Act.
We will own, directly or indirectly, all of the common securities of each
Trust, which will have an aggregate liquidation amount equal to 3% of the
total capital of each Trust . The common securities will generally rank
equally in right of payment with the preferred securities, and payments on
both will be made pro rata. However, upon an event of default under the
Trust's amended declaration, the rights of the holders of the common
securities to payment of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the preferred securities. We will pay all fees and expenses related to the
Trusts and the offering of trust securities.
Each Trust has a term of approximately 55 years, but may terminate
<PAGE> 8
earlier as provided in its amended declaration. As holder of all of the
common securities, we will be entitled to appoint, remove or replace any of,
or increase or reduce the number of, the trustees of each Trust. The business
and affairs of each Trust will be conducted by such trustees, and the duties
and obligations of the trustees will be governed by the amended declaration of
each Trust.
At least one of the trustees of each Trust will be a person who is our
employee or officer, or otherwise affiliated with us. These persons are
sometimes referred to as "regular" trustees. One trustee of each Trust will
be a financial institution which will be unaffiliated with us and which will
act as property trustee and as indenture trustee for purposes of the Trust
Indenture Act under the terms of the amended declaration and as may be further
described in a prospectus supplement. The property trustee will hold title to
the junior subordinated debt securities for the benefit of the holders of the
trust securities. In addition, unless the property trustee maintains a
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable laws, one trustee of each Trust will be a legal
entity having a principal place of business in, or an individual resident of,
the State of Delaware.
Unless otherwise indicated in a prospectus supplement, Wilmington Trust
Company will be the property trustee and the Delaware trustee. The address of
the principal office of Wilmington Trust Company in the State of Delaware is
Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001. The principal place of business of each Trust will be c/o Louis
Dreyfus Natural Gas Corp., 14000 Quail Springs Parkway, Suite 600, Oklahoma
City, OK 73134-2600.
USE OF PROCEEDS
Unless we have indicated otherwise in the accompanying prospectus
supplement, we expect to use the net proceeds we receive from any offering of
these securities for our general corporate purposes, including working
capital, repayment or reduction of debt, capital expenditures, and
acquisitions of additional oil and gas properties. Each of the Trusts will use
the net proceeds from the sale of its preferred securities to purchase a
series of junior subordinated debt securities from us. We also expect to use
the net proceeds from the sale of those junior subordinated debt securities
for the purposes described in this section.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated.
<PAGE> 9
<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended
--------------------------------------- March 31,
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C<>
Ratio of earnings
to fixed charges.... 1.9x 1.7x 2.1x -- -- --
</TABLE>
For the purpose of calculating the ratio of earnings to fixed charges,
earnings represents net income before income taxes plus fixed charges, less
capitalized interest. Fixed charges consist of interest expense, including
amortization of debt discount and financing costs, capitalized interest and
the portion of rental expense which we believe is representative of the
interest component of rental expense. Earnings were insufficient to cover
fixed charges by $28.3 million, $76.4 million and $6.5 million for the years
ended December 31, 1997 and 1998 and the three months ended March 31, 1999,
respectively.
DESCRIPTION OF THE SECURITIES WE MAY OFFER
GENERAL
We may issue, in one or more offerings:
* common stock, par value $.01 per share;
* preferred stock, par value $.01 per share; and
* debt securities, which may be senior or subordinated.
The Trusts may issue, from time to time, in one or more offerings, Trust
preferred securities that we will unconditionally guarantee.
This prospectus contains a summary of the general terms of the various
securities that we or the Trusts may offer. The prospectus supplement relating
to any particular securities offered will describe the specific terms of the
securities, which may be in addition to or different from the general terms
summarized in this prospectus. The summary in this prospectus and in any
prospectus supplement does not describe every aspect of the securities and is
subject to and qualified in its entirety by reference to all applicable
provisions of the documents relating to the securities offered. These
documents are or will be filed as exhibits to or incorporated by reference in
the registration statement.
In addition, the prospectus supplement will set forth the terms of the
offering, the initial public offering price and net proceeds to us. Where
applicable, the prospectus supplement will also describe any material United
States federal income tax considerations relating to the securities offered
and indicate whether the securities offered are or will be listed on any
securities exchange.
<PAGE> 10
BOOK-ENTRY SYSTEM
We or the Trusts may issue securities in the form of one or more fully
registered global securities. These will be deposited with, or on behalf of,
the Depository Trust Company and registered in the name of its nominee. Except
as described below, the global securities may be transferred, in whole and not
in part, only to DTC or to another nominee of DTC.
DTC has advised us that it 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 under the provisions of Section 17A
of the Securities Exchange Act of 1934.
DTC was created to hold securities for institutions that have accounts
with DTC ("participants") and to facilitate the clearance and settlement of
securities transactions among its participants through electronic book-entry
changes in participants' accounts. Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain other
organizations, some of whom own DTC. Access to DTC's book-entry system is also
available to others that clear through or maintain a custodial relationship
with a participant, either directly or indirectly. DTC administers its
book-entry system in accordance with its rules and bylaws and legal
requirements.
Upon issuance of a global security representing offered securities, DTC
will credit on its book-entry registration and transfer system the principal
amount to participants' accounts. Ownership of beneficial interests in the
global security will be limited to participants or to persons that hold
interests through participants. Ownership of interests in the global security
will be shown on, and the transfer of those ownership interests will be
effected only through, records maintained by DTC with respect to participants'
interests and the participants with respect to the owners of beneficial
interests in the global security. The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of those
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a global security.
So long as DTC or its nominee is the registered holder and owner of a
global security, DTC or its nominee will be considered, for all purposes under
<PAGE> 11
the applicable indenture, the sole owner and holder of the related offered
securities. Except as described below, owners of beneficial interests in a
global security will not:
* be entitled to have the offered securities registered in their
names; or
* receive or be entitled to receive physical delivery of certificated
offered securities in definitive form.
Each person owning a beneficial interest in a global security must rely
on DTC's procedures, and, if that person holds through a participant, on the
participant's procedures to exercise any rights of a holder of offered
securities under the global security or any applicable indenture, or
otherwise. The indentures provide that DTC may grant proxies and otherwise
authorize participants to take any action which it as the holder of a global
security is entitled to take under the indentures or the global security. We
understand that under existing industry practice, if we or a Trust request any
action of holders or an owner of a beneficial interest in a global security
desires to take any action that DTC as the holder of the global security is
entitled to take, DTC would authorize the participants to take that action and
the participants would authorize their beneficial owners to take the action or
would otherwise act upon the instructions of their beneficial owners.
We or the Trusts will make payments with respect to securities
represented by a global security to DTC. We expect that DTC, upon receipt of
any payments, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests. We also expect
that payments by participants to owners of beneficial interests in a global
security held through them will be governed by standing instructions and
customary practices, as is the case with securities held for customers'
accounts in "street name", and will be the responsibility of the participants.
We, the Trusts or any trustee will not have any responsibility or liability
for:
* any aspect of the records relating to, or payments made on account
of, beneficial ownership interests in a global security for any
securities;
* maintaining, supervising, or reviewing any records relating to any
beneficial ownership interests;
* any other aspect of the relationship between DTC and its
participants; or
* the relationship between the participants and the owners of
beneficial interests in a global security.
Unless and until they are exchanged in whole or in part for certificated
securities in definitive form, the global securities may not be transferred
<PAGE> 12
except as a whole by DTC to its nominee or by its nominee to DTC or another
nominee.
The securities of any series represented by a global security may be
exchanged for certificated securities in definitive form if:
* DTC notifies us that it is unwilling or unable to continue as
depositary for the global security or if at any time it ceases to
be a clearing agency registered under the Securities Exchange Act
of 1934;
* We decide at any time not to have the securities of that series
represented by a global security and so notify DTC; or
* in the case of debt securities, an event of default has occurred
and is continuing with respect to the debt securities.
If there is such an exchange, we will issue certificated securities in
authorized denominations and registered in such names as DTC directs. Subject
to the foregoing, the global securities are not exchangeable, except for a
global securities of the same aggregate denomination to be registered in DTC's
or its nominee's name.
DESCRIPTION OF COMMON STOCK
GENERAL
Our authorized capital stock consists of 100,000,000 shares of common
stock, par value $.01 per share, and 10,000,000 shares of preferred stock,
par value $.01 per share. We describe the preferred stock under the heading
"Description of Preferred Stock" below.
This section summarizes the general terms of the common stock that we may
offer. The prospectus supplement relating to the common stock offered will set
forth the number of shares offered, the initial offering price and market
price, dividend information and any other relevant information. The summary in
this section and in the prospectus supplement does not describe every aspect
of the common stock and is subject to and qualified in its entirety by
reference to all the provisions of our Amended and Restated Certificate of
Incorporation and Bylaws and the Oklahoma General Corporation Act.
TERMS OF THE COMMON STOCK
As of March 31, 1999, there were 40,109,758 shares of common stock issued
and outstanding. All shares of common stock have equal rights to participate
in dividends and, in the event of liquidation, assets available for
distribution to stockholders, subject to any preference established with
respect to preferred stock. Each share of common stock entitles the holder to
one vote for such share held on all matters submitted to a vote of
stockholders. Voting rights for the election of directors are noncumulative.
Shares of common stock carry no conversion, preemptive or subscription rights,
and are not subject to redemption. All outstanding shares of common stock
<PAGE> 13
are, and any shares of common stock issued upon conversion of any convertible
securities will be, fully paid and nonassessable. We may pay dividends on the
common stock when, as and if declared by the Board of Directors. Dividends
may be declared in the discretion of the Board of Directors from funds legally
available, subject to restrictions under agreements related to our
indebtedness.
TRANSFER AGENT AND REGISTRAR
The outstanding shares of common stock are listed on the New York Stock
Exchange and trade under the symbol "LD." The transfer agent and registrar of
the common stock is Chase Mellon Shareholder Services, L.L.C.
DESCRIPTION OF PREFERRED STOCK
GENERAL
This section summarizes the general terms of the preferred stock that we
may offer. The prospectus supplement relating to a particular series of
preferred stock offered will describe the specific terms of that series, which
may be in addition to or different from the general terms summarized in this
section. The summary in this section and in any prospectus supplement does not
describe every aspect of the preferred stock and is subject to and qualified
in its entirety by reference to all the provisions of our certificate of
incorporation, the certificate of designation relating to the applicable
series of preferred stock, and the Oklahoma General Corporation Act. The
certificate of designation will be filed as an exhibit to or incorporated by
reference in the registration statement.
AUTHORITY OF THE BOARD TO ISSUE PREFERRED STOCK
Our certificate of incorporation authorizes the issuance of 10,000,000
shares of preferred stock, par value of $.01 per share. On March 31, 1999,
there were no shares of preferred stock outstanding. Preferred stock may be
issued from time to time in one or more classes or series with such rights and
preferences, including voting, dividend and conversion rights and other terms,
as the Board of Directors may establish without any further authorization by
the stockholders.
The preferred stock that we may offer will be issued in one or more
classes or series. The prospectus supplement relating to the particular class
or series of preferred stock will describe the specific terms of the class or
series, including:
* the designation and stated value per share of such preferred stock
and the number of shares offered;
* the amount of liquidation preference per share;
* the initial public offering price at which such preferred stock
will be issued;
<PAGE> 14
* the dividend rate (or method of calculation), the dates on which
dividends will be payable and the dates from which dividends shall
commence to cumulate, if any;
* any redemption or sinking fund provisions;
* any conversion or exchange rights; and
* any additional voting, dividend, liquidation, redemption, sinking
fund and other rights, preferences, privileges, limitations and
restrictions.
The holders of preferred stock will have no preemptive rights. Upon
issuance against full payment of the purchase price, the preferred stock will
be fully paid and nonassessable. Unless otherwise provided in the prospectus
supplement relating to the particular class or series, the preferred stock
will have the rights described below.
DIVIDENDS
The preferred stock will be preferred over the common stock as to payment
of dividends. Before any dividends or distributions, other than dividends or
distributions payable in common stock, on the common stock shall be declared
and set apart for payment or paid, the holders of shares of each series of
preferred stock will be entitled to receive dividends when, as and if declared
by the Board of Directors. We will pay those dividends either in cash, shares
of common stock or preferred stock or otherwise, at the rate and on the date
or dates set forth in the prospectus supplement. With respect to each series
of preferred stock, the dividends on each share of the series will be
cumulative from the date of issue of the share unless some other date is set
forth in the prospectus supplement relating to the series. Accruals of
dividends will not bear interest.
LIQUIDATION
The preferred stock will be preferred over the common stock as to asset
distributions so that the holders of each series of preferred stock will be
entitled to be paid, upon our voluntary or involuntary liquidation,
dissolution or winding up and before any distribution is made to the holders
of common stock, the amount set forth in the applicable prospectus supplement.
However, in this case the holders of preferred stock will not be entitled to
any other or further payment. If upon any liquidation, dissolution or winding
up our net assets are insufficient to permit the payment in full of the
respective amounts to which the holders of all outstanding preferred stock are
entitled, our entire remaining net assets will be distributed among the
holders of each series of preferred stock in amounts proportional to the full
amounts to which the holders of each series are entitled.
REDEMPTION OR CONVERSION
The shares of any series of preferred stock will be redeemable or will be
convertible into shares of common stock or any other series of preferred stock
<PAGE> 15
to the extent set forth in the prospectus supplement relating to the series.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The debt securities will be unsecured general obligations and may
include:
* senior debt securities, to be issued under the senior indenture; or
* subordinated debt securities, to be issued under the subordinated
indenture.
We may also issue junior subordinated debt securities under the junior
subordinated indenture to one or more of the Trusts which will be purchased by
the Trusts using proceeds from issuances of trust preferred securities.
This section summarizes the general terms of the debt securities we may
offer. The prospectus supplement relating to any particular debt securities
offered will indicate whether the debt securities are senior debt securities,
subordinated debt securities or junior subordinated debt securities, and will
describe the specific terms of the debt securities, which may be in addition
to or different from the general terms summarized in this section. The summary
in this section and in any prospectus supplement does not describe every
aspect of the senior indenture, subordinated indenture or junior subordinated
indenture or the debt securities, and is subject to and qualified in its
entirety by reference to all the provisions of the applicable indenture and
the debt securities. The forms of the senior indenture, subordinated indenture
and junior subordinated indenture and the forms of the debt securities are or
will be filed as exhibits to or incorporated by reference in the registration
statement.
The indentures do not limit the amount of debt securities which may be
issued under the indentures and provide that debt securities may be issued in
principal amounts which may be authorized from time to time. The debt
securities may be issued from time to time in one or more series. Unless
otherwise specified in the prospectus supplement, the senior debt securities
will be unsecured and will rank equally with all other unsecured and
unsubordinated indebtedness. Our subordinated debt securities and our junior
subordinated debt securities will be subordinated in right of payment to the
prior payment in full of our senior indebtedness as described below under
"Provisions Applicable to Subordinated Debt Securities - Subordination,"
"Provisions Applicable to Junior Subordinated Debt Securities - Subordination
of Junior Subordinated Debt Securities," and in the applicable prospectus
supplement.
<PAGE> 16
Each prospectus supplement will describe the following terms of the
offered debt securities:
* The title;
* Any limit on the aggregate principal amount;
* Whether the offered debt securities will be issued initially in the
form of a temporary global security or issued in the form of a
permanent global security; the terms and conditions, if any, upon
which the global security may be exchanged in whole or in part for
other definitive debt securities; and the depositary for the global
security;
* The date(s) on which the principal and any premium is payable and
the method of determination thereof;
* The interest rate(s), if any, and the method of determination
thereof and the date(s) from which the interest accrues;
* The dates on which the interest, if any, is payable and the regular
record dates for the interest payment dates;
* Our right, if any, to defer payment of interest and the maximum
length of any deferral period;
* The place(s) where principal and any premium and interest is
payable;
* Whether the offered debt securities are redeemable at our option
and the redemption price(s) and other redemption terms and
conditions;
* Whether we are obligated to redeem or purchase the offered debt
securities according to any sinking fund or similar provision or at
the holder's option and the price(s), period(s), and terms
and conditions of that redemption or purchase obligation;
* If other than denominations of $1,000 and any integral multiple of
$1,000, the denominations in which offered debt securities of the
series will be issuable;
* If other than United States Dollars, the currency or currencies of
payment of principal and any premium and interest;
* If payments are based on an index, the manner in which the amount
of principal payments and any premium and interest is to be
determined;
* If other than the full principal amount, the portion of the
principal amount payable if the maturity of the offered debt
securities is accelerated;
<PAGE> 17
* Whether the provisions relating to satisfaction, discharge, and
defeasance described below apply and any additional means of
satisfaction, discharge and defeasance;
* Whether the offered debt securities are subordinated debt
securities or junior subordinated securities and the terms of
subordination including any modification to the subordination
provisions described below;
* Any deletions or modifications to the Events of Default described
below;
* If applicable, the terms of any right to convert or exchange the
offered debt securities into common stock or other securities;
* Any authenticating or paying agents, registrars, conversion agents
or any other agents with respect to the offered debt securities;
and
* Any other terms.
Debt securities may be issued and sold at a substantial discount below
their principal amount. If applicable, the prospectus supplement will describe
any special United States federal income tax consequences and other
considerations which apply to debt securities issued at a discount or to any
offered debt securities denominated or payable in a foreign currency or
currency unit.
PROVISIONS APPLICABLE TO ALL DEBT SECURITIES
EVENTS OF DEFAULT
Unless otherwise provided in the prospectus supplement with respect to
any series of debt securities, the following are events of default under each
indenture with respect to the debt securities of such series issued under such
indenture:
* failure to pay principal of or premium, if any, on any debt
security of such series when due;
* failure to pay interest, if any, on any debt security of such
series when due, continued for 60 days;
* failure to deposit any mandatory sinking fund payment, when due, in
respect of any debt security of such series, continued for 60 days;
* failure to perform any other covenant made by us in the indenture,
other than a covenant included in the indenture for the benefit of
a series of debt securities other than such series, continued for
90 days after written notice as provided in the indenture;
* certain events of bankruptcy, insolvency or reorganization; and
<PAGE> 18
* any other event of default as may be specified with respect to debt
securities of such series.
If an event of default with respect to any outstanding series of debt
securities occurs and is continuing, either the trustee or the holders of at
least 25% in principal amount of the outstanding debt securities of such
series, in the case of an event of default described above relating to payment
of principal, premium and interest and other events of default specified with
respect to such series, or at least 25% in principal amount of all outstanding
debt securities under the applicable indenture, in the case of other events of
default, may declare the principal amount of all the debt securities of the
applicable series, or of all outstanding debt securities under the applicable
indenture, as the case may be, to be due and payable immediately. At any time
after a declaration of acceleration has been made, but before a judgment has
been obtained, the holders of a majority in principal amount of the
outstanding debt securities of such series (or of all outstanding debt
securities under the applicable indenture, as the case may be) may, under
certain circumstances, rescind and annul such acceleration. Depending on the
terms of our other indebtedness outstanding from time to time, an event of
default under an indenture may give rise to cross defaults on our other
indebtedness.
Each indenture provides that the trustee will, within 90 days after the
occurrence of a default in respect of any series of debt securities, give to
the holders of the debt securities of such series notice of all uncured and
unwaived defaults known to it; provided, however:
* that except in the case of a default in the payment of the
principal of or premium or interest, if any, on, or any sinking
fund installment with respect to, any debt securities of such
series, the trustee will be protected in withholding such notice if
it in good faith determines that the withholding of such notice is
in the interest of the holders of the debt securities of such
series; and provided further,
* that such notice shall not be given until at least 60 days after
the occurrence of a default in the performance, or breach, of any
covenant or warranty of ours under such indenture other than for
the payment of the principal of or premium or interest, if any, on,
or any sinking fund installment with respect to, any debt
securities of such series.
For the purpose of this provision, "default" with respect to debt securities
of any series means any event which is, or after notice or lapse of time, or
both, would become, an event of default with respect to the debt securities of
such series.
<PAGE> 19
The holders of a majority in principal amount of the outstanding debt
securities of any series, or, in certain cases, all outstanding debt
securities under the applicable indenture, have the right, subject to certain
limitations to direct the time, method and place of conducting any proceeding
for any remedy available to the trustee or exercising any trust or power
conferred on the trustee with respect to the debt securities of such series or
of all outstanding debt securities under the applicable indenture. Each
indenture provides that in case an event of default shall occur and be
continuing, the trustee shall exercise such of its rights and powers under the
applicable indenture and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. Subject to such provisions, the trustee will be
under no obligation to exercise any of its rights or powers under any
applicable indenture at the request of any of the holders of the debt
securities unless they shall have offered to the trustee reasonable security
or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request.
The holders of a majority in principal amount of the outstanding debt
securities of any series, or, in certain cases, all outstanding debt
securities under the applicable indenture, may on behalf of the holders of all
debt securities of such series, or of all outstanding debt securities under
the applicable indenture waive any past default under the applicable
indenture, except a default in the payment of the principal of or premium or
interest, if any, on any debt security or in respect of a provision which
under the applicable indenture cannot be modified or amended without the
consent of the holder of each outstanding debt security affected. The holders
of a majority in principal amount of the outstanding debt securities may on
behalf of the holders of all such debt securities waive compliance by us with
certain restrictive provisions of the indentures.
We are required to furnish to the trustee annually a statement as to the
performance by us of certain of our obligations under each indenture and as to
any default in such performance.
MODIFICATION
Modifications and amendments of each indenture may be made by us and the
trustee with the consent of the holders of a majority in principal amount of
the outstanding debt securities under the applicable indenture; provided,
however, that no such modification or amendment may, without the consent of
the holder of each outstanding debt security:
* change the stated maturity date of the principal of or any
installment of interest, if any, on any debt security;
* reduce the principal amount of or the premium or interest, if any,
on any debt security;
* change the place or currency, currencies, or currency unit or units
<PAGE> 20
or payment of principal of or premium or interest, if any, on any
debt security;
* impair the right to institute suit for the enforcement of any
payment on or with respect to any debt security; or
* reduce the percentage in principal amount of outstanding debt
securities the consent of whose holders is required for
modification or amendment of the indentures or for waiver of
compliance with certain provisions of the indentures or for waiver
of certain defaults.
Each indenture provides that we and the trustee may, without the consent
of any holders of debt securities, enter into supplemental indentures for the
purposes, among other things, of adding to our covenants, adding additional
events of default, establishing the form or terms of debt securities or curing
ambiguities or inconsistencies in the applicable indenture, provided such
action to cure ambiguities or inconsistencies does not adversely affect the
interests of the holders of the debt securities in any material respect.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Without the consent of any holders of outstanding debt securities, we may
consolidate with or merge into, or convey, transfer or lease our assets
substantially as an entirety to any entity, provided that:
* the entity formed by such consolidation or into which we are merged
or which acquires or leases our assets substantially as an entirety
is a corporation, partnership or trust organized under the laws of
any United States jurisdiction and assumes by supplemental
indenture our obligations on the debt securities and under the
indentures;
* after giving effect to the transaction, no event of default, and no
event which, after notice or lapse of time or both, would become an
event of default, shall have occurred and be continuing; and
* and certain other conditions are met.
Upon compliance with these provisions by a successor entity, we will (except
in the case of a lease) be relieved of our obligations under the indentures
and the debt securities.
DISCHARGE AND DEFEASANCE
We may terminate our obligations under each indenture, other than our
obligations to pay the principal of and premium and interest, if any, on the
debt securities of any series and certain other obligations, if we:
<PAGE> 21
* irrevocably deposit or cause to be irrevocably deposited with the
trustee as trust funds money or U.S. Government Obligations
maturing as to principal and interest sufficient to pay the
principal of, any interest on, and any mandatory sinking funds in
respect of, all outstanding debt securities of such series on the
stated maturity of such payments or on any redemption date; and
* comply with any additional conditions specified to be applicable
with respect to the defeasance of debt securities of such series.
The terms of any series of debt securities may also provide for legal
defeasance under to each Indenture. In such case, if we:
* irrevocably deposit or cause to be irrevocably deposited money or
U.S. Government Obligations as described above;
* make a request to the trustee to be discharged from our obligations
on the debt securities of such series; and
* comply with any additional conditions specified to be applicable
with respect to legal defeasance of securities of such series
then we shall be deemed to have paid and discharged the entire indebtedness on
all the outstanding debt securities of such series and our obligations under
the applicable indenture and the debt securities of such series to pay the
principal of and premium and interest, if any, on the debt securities of such
series shall cease, terminate and be completely discharged, and the holders
thereof shall then be entitled only to payment out of the money or U.S.
Government Obligations deposited with the trustee as described above, unless
our obligations are revived and reinstated because the trustee is unable to
apply such trust fund by reason of any legal proceeding, order or judgment.
The term "U.S. Government Obligations" is defined in each indenture as
direct noncallable obligations of, or noncallable obligations the payment of
principal of and interest on which is guaranteed by, the United States of
America, or to the payment of which obligations or guarantees the full faith
and credit of the United States of America is pledged, or beneficial interests
in a trust the corpus of which consists exclusively of money or such
obligations or a combination thereof.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt securities will be issuable in definitive, registered form. Debt
securities are also issuable in temporary or permanent global form. See
<PAGE> 22
"Description of the Securities We May Offer - Book-Entry System."
Debt securities of any series will be exchangeable for other debt
securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations.
Debt securities may be presented for exchange as provided above, and may
be presented for registration of transfer with the form of transfer endorsed
thereon duly executed, at the office of the security registrar or at the
office of any transfer agent designated by us for such purpose with respect to
any series of debt securities and referred to in an applicable prospectus
supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the applicable indenture. Such transfer
or exchange will be effected upon the security registrar or such transfer
agent, as the case may be, being satisfied with the documents of title and
identity of the person making the request. The indentures provide that the
applicable trustee will be appointed as security registrar. If a prospectus
supplement refers to any transfer agents, in addition to the security
registrar, initially designated by us with respect to any series of debt
securities, we may at any time rescind the designation of any such transfer
agent or approve a change in the location through which any such transfer
agent acts. We will be required to maintain a transfer agent in each
designated place of payment for each series of debt securities. We may at any
time designate additional transfer agents with respect to any series of debt
securities.
In the event of any redemption in part, we will not be required to:
* issue, register the transfer of or exchange debt securities of any
series during a period beginning at the opening of business 15 days
prior to the selection of debt securities of that series for
redemption and ending on the close of business on the day of
mailing of the relevant notice of redemption; or
* register the transfer of or exchange any debt security, or portion
thereof, called for redemption, except the unredeemed portion of
any debt security being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in a prospectus supplement, payment of
principal of and premium and interest, if any, on debt securities will be made
in the designated currency or currency unit at the office of such paying agent
or paying agents as we may designate from time to time, except that our option
payment of any interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the security register.
Unless otherwise indicated in a prospectus supplement, payment of any
installment of interest on debt securities will be made to the person in whose
name such debt security is registered at the close of business on the regular
record date for such interest.
<PAGE> 23
Unless otherwise indicated in a prospectus supplement, the corporate
trust office of the trustee in the Borough of Manhattan, The City of New York
will be designated as our paying agent for payments with respect to debt
securities. Any other paying agents in the United States initially designated
by us for the debt securities will be named in an applicable prospectus
supplement. We may at any time designate additional paying agents or rescind
the designation of any paying agent or approve a change in the office through
which any paying agent acts, except that, we will be required to maintain a
paying agent in each designated place of payment for each series of debt
securities.
All moneys we pay to a paying agent for the payment of principal of and
any premium or interest on any debt security which remain unclaimed at the end
of three years after such principal, premium or interest shall have become due
and payable will, subject to applicable escheat laws, be repaid to us and the
holder of such debt security or any coupon will look only to us for payment
thereof.
MEETINGS
The indentures contain provisions for convening meetings of the holders
of debt securities of a series. A meeting may be called at any time by the
trustee, and also, upon request, by us or the holders of at least 10% in
principal amount of the outstanding debt securities of such series, in any
such case upon notice given as described under "- Notices" below. Except for
any consent that must be given by the holder of each outstanding debt
security, as described under "- Modification" above, any resolution presented
at a meeting or adjourned meeting at which a quorum is present may be adopted
by the affirmative vote of the holders of a majority in principal amount of
the outstanding debt securities of that series; provided, however, that,
except for any consent that must be given by the holder of each outstanding
debt security, as described under "- Modification" above, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the holders of a
specified percentage, which is less than a majority in principal amount of the
outstanding debt securities of a series, may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal
amount of the outstanding debt securities of that series. Subject to the
proviso set forth above, any resolution passed or decision taken at any
meeting of the holders of debt securities of any series duly held in
accordance with the indenture will be binding on all holders of debt
securities of that series and any related coupons. The quorum at any meeting
called to adopt a resolution, and at any reconvened meeting, will be persons
holding or representing a majority in principal amount of the outstanding debt
securities of a series.
NOTICES
Notices to holders of debt securities will be given by mail to the
<PAGE> 24
addresses of such holders as they appear in the security register.
THE TRUSTEE
The applicable prospectus supplement will specify the trustee under the
senior indenture and the subordinated indenture. Wilmington Trust Company or
such other trustee as may be named in a prospectus supplement will be the
trustee under the junior subordinated indenture. Each indenture contains
certain limitations on the right of the trustee, if it is one of our
creditors, to obtain payment of claims in certain cases or to realize on
certain property received with respect to any such claims, as security or
otherwise. The trustee is permitted to engage in other transactions, except
that, if it acquires any conflicting interest, it must eliminate such conflict
or resign.
GOVERNING LAW
The senior indenture, the subordinated indenture, the junior subordinated
indenture and the debt securities shall be governed by and construed under New
York law except to the extent that the Trust Indenture Act is applicable.
PROVISIONS APPLICABLE TO SUBORDINATED DEBT SECURITIES
CERTAIN DEFINITIONS APPLICABLE TO DESCRIPTION OF SUBORDINATION
The term "Indebtedness," is defined in the Subordinated Indenture to
mean, without duplication, with respect to any person, the principal component
of:
(a) all obligations of such person
* in respect of borrowed money, whether or not the recourse of
the lender is to the whole of the assets of such person or
only to a portion thereof,
* evidenced by bonds, notes, debentures or similar instruments,
* for the payment of money representing the balance deferred and
unpaid of the purchase price of any property or services other
than accounts payable or other obligations arising in the
ordinary course of business,
* evidenced by bankers acceptances or similar instruments issued
or accepted by banks,
* for the payment of money relating to capitalized lease
obligations, or
<PAGE> 25
* evidenced by letter of credit or reimbursement obligation of
such person with respect to any letter of credit other than a
letter of credit entered into for the purpose of providing
security in connection with the forward purchase and sale
contracts or energy swaps with respect to our oil and gas
business;
(b) all current net obligations of such person under interest rate swap
obligations and foreign currency hedges;
(c) all liabilities of others of the kind described in the preceding
clauses (a) or (b) that such person has guaranteed or that are otherwise
its legal liability;
(d) indebtedness, as otherwise defined in this definition, of others
secured by a lien on any asset of such person, other than liens securing
obligations of such person under delivery contracts with respect to our
oil and gas business, whether or not such indebtedness is assumed by such
person, provided that if the obligations so secured have not been assumed
in full by such person or are not otherwise such person's legal liability
in full, then such obligation shall be deemed to have been an amount
equal to the greater of
(1) the lesser of
* the full amount of such obligations and
* the fair market value of such asset, as determined
in good faith by the Board of Directors of such
person, which determination shall be evidenced by a
board resolution, and
(2) the amount of obligations as have been assumed by such person
or which are otherwise such person's legal liability,
(e) such other items as are described in the prospectus supplement
relating to a particular series of subordinated debt securities; and
(f) any and all deferrals, renewals, and extensions, refinancings and
refunding, whether direct or indirect, of, or amendments, modifications
or supplements to, any liability of the kind described in any of the
preceding clauses or this clause, whether or not between or among the
same parties.
The term "permitted junior securities" is defined in the subordinated
<PAGE> 26
indenture as our subordinated debt securities or any successor obligor with
respect to the senior indebtedness, provided for by a plan of reorganization
or readjustment that are subordinated in right of payment to all senior
indebtedness that may be outstanding to substantially the same extent as, or
to a greater extent than, the subordinated debt securities are subordinated as
provided in the subordinated indenture.
The term "securities payment" is defined in the subordinated indenture to
mean any payment or distribution of any kind or character, whether by way of
set-off or otherwise and whether in cash, property or securities, including
any junior subordinated payment, as defined in the subordinated indenture, on
account of principal of, or premium, if any, or interest on, or additional
amounts, as defined in the subordinated indenture, with respect to, the
securities or on account of any purchase, repurchase, redemption or other
acquisition of securities, in any case whether by us or by any other person on
our behalf.
The term "senior indebtedness" is defined in the subordinated indenture
as:
* all of our indebtedness, including principal, premium, if any,
interest and all other amounts owing in respect of such
indebtedness, including interest that, but for the filing of a
petition initiating any proceeding under to any bankruptcy law with
respect to us, would accrue on such indebtedness at the contractual
rate provided in the instruments evidencing the respective
obligations, whether or not such claim is allowed in such
bankruptcy proceeding, whether existing on the date of issuance
of any subordinated debt securities or created, incurred or assumed
later unless such indebtedness by its terms or by the terms of the
instrument creating or evidencing it is subordinate in right of
payment to or is pari passu with the subordinated debt securities;
* all of our reimbursement obligations with respect to letters of
credit not otherwise constituting indebtedness;
* all of our obligations under forward purchase and sale contracts or
energy swaps with respect to our oil and gas business, including
obligations to deliver natural gas or other commodities and
liabilities for any breach of obligations under such contracts;
* all charges, fees, expenses, including reasonable attorneys fees
and expenses, and other amounts incurred by or owing to holders of
indebtedness or obligations described in the preceding clauses
in connection with such indebtedness or obligations;
<PAGE> 27
* all interest payable during the pendency of a proceeding under
Title 11 of the United States Code on indebtedness or obligations
referred to in the first three clauses incurred prior to the
commencement of such proceeding; and
* any of our other indebtedness or obligations as may be defined in
the prospectus supplement for the particular issue of subordinated
debt securities.
Notwithstanding the foregoing, senior indebtedness shall not include:
* any of our indebtedness to a subsidiary of ours,
* our indebtedness to, or guaranteed on behalf of any affiliate,
including without limitation amounts owed for compensation, and
* such other indebtedness or obligations as defined in the prospectus
supplement for the particular issue of subordinated debt
securities.
SUBORDINATION
The payment of the principal of and premium, if any, and interest on the
subordinated debt securities is, to the extent set forth in the subordinated
indenture and in any applicable prospectus supplement, subordinated in right
of payment to the prior payment in full of all senior indebtedness, whether
now outstanding or incurred in the future. Upon any payment or distribution
of our assets to creditors upon any liquidation, dissolution, winding up,
assignment for the benefit of creditors or marshaling of assets and
liabilities or any bankruptcy, insolvency, receivership, liquidation,
reorganization or similar proceedings, the holders of all senior indebtedness
will first be entitled to receive any payment in full of all amounts due or to
become due thereon in cash, or such payment duly provided for, before any
securities payment is made, other than in permitted junior securities.
If a payment event of default shall have occurred and be continuing with
respect to any senior indebtedness, no securities payment shall be made, other
than in permitted junior securities. The term "payment event of default" is
defined as any default in the payment of principal of or premium, if any, or
interest on any senior indebtedness when due, whether at maturity, upon
acceleration or otherwise. In the event that, notwithstanding the restriction
described in the preceding sentence, payment is made to the trustee or a
holder of subordinated debt securities prohibited by any such restriction,
then such payment shall be held in trust for the benefit of, and shall be paid
over or delivered to the holders of senior indebtedness or their
<PAGE> 28
representatives, if any, as their respective interests may appear, prorated to
such holders on the basis of the respective amount of senior indebtedness held
by such holders.
The subordination rights of holders of senior indebtedness will not be
prejudiced or impaired by any acts or failures to act by us or by any such
holder. The subordination of the subordinated debt securities set forth above
will not prevent the occurrence of any event of default under the subordinated
indenture. Furthermore, the subordination of the subordinated debt securities
as set forth above will not impair, as between us, the holders of the
subordinated debt securities and creditors other than holders of senior
indebtedness, our obligations to make payments on the subordinated debt
securities in accordance with their terms. In certain circumstances, as set
forth in the indenture, the holders of subordinated debt securities will be
subrogated to certain rights of the holders of senior indebtedness upon
payment in full of all senior indebtedness.
By reason of such subordination, in the event of insolvency of the
holders of senior indebtedness, as well as our other creditors who are holders
of indebtedness that is not subordinated to the senior indebtedness, may
recover more, ratably, than the holders of the subordinated debt securities.
The subordinated debt securities will also be effectively subordinated to
all liabilities, including trade payables and capitalized lease obligations,
if any, of our subsidiaries. Our right to receive the assets of any of our
subsidiaries upon their liquidation or reorganization and the consequent right
of the holders of the subordinated debt securities to participate in those
assets will be subject to the prior payment of claims of that subsidiary's
creditors, including trade creditors, except to the extent that we are a
creditor of such subsidiary, in which case our claims would still be subject
to the prior payment of claims secured by security interests in the assets of
such subsidiary and any other indebtedness of such subsidiary senior to that
held by us.
If the subordinated debt securities are issued under the subordinated
indenture, the aggregate principal amount of senior indebtedness outstanding
as of a recent date will be set forth in the prospectus supplement. The
subordinated indenture does not restrict the amount of senior indebtedness
that we may incur, although the terms of the subordinated debt securities
offered in connection with any prospectus supplement may contain such
limitations.
The terms of our existing outstanding 9-1/4% Senior Subordinated Notes
due 2004 ("9-1/4% Notes") prohibit us from issuing subordinated debt
securities ranking senior in right of payment to the 9-1/4% Notes.
<PAGE> 29
PROVISIONS APPLICABLE TO JUNIOR SUBORDINATED DEBT SECURITIES
EVENTS OF DEFAULT
In addition to the events described above under "Provisions Applicable to
All Debt Securities - Events of Default" applicable to all debt securities,
the voluntary or involuntary dissolution, winding up or termination of the
Trust that owns the series of junior subordinated debt securities will
constitute an event of default for any series of junior subordinated debt
securities issued under the junior subordinated indenture, except in
connection with:
* the distribution of such junior subordinated debt securities to
holders of trust securities of the Trust;
* the redemption of all of the trust securities of the Trust; and
* mergers, consolidations or amalgamations permitted by the amended
declaration of the Trust.
The holders of at least a majority in aggregate liquidation amount of the
trust preferred securities of the Trust may waive any default or event of
default with respect to such series and its consequences, except defaults or
events of default that:
* are not waivable under the junior subordinated indenture, such as
defaults regarding payment of principal, premium, if any, or
interest; or
* require the consent or vote of greater than a majority in principal
amount of the holders of junior subordinated debt securities to be
waived under the junior subordinated indenture, in which case the
event of default may only be waived by the holders of the same
"super-majority" in liquidation amount of the trust preferred
securities.
Any such waiver shall cure such default or event of default. If, under
the amended declaration of a Trust, an event of default has occurred and is
attributable to our failure to pay principal, premium, if any, or interest on,
such junior subordinated debt securities, then each holder of the trust
preferred securities of the Trust may sue us or seek other remedies, to force
payment to such holder of the principal of, premium, if any, or interest on,
such junior subordinated debt securities having a principal amount equal to
the aggregate liquidation amount of the trust preferred securities held by
such holder.
MODIFICATION OF JUNIOR SUBORDINATED INDENTURE
Under the junior subordinated indenture, we and the indenture trustee may
change certain rights of holders of a series of junior subordinated debt
<PAGE> 30
securities with the written consent of the holders of a majority in principal
amount of the series of junior subordinated debt securities that is affected.
Any such change will be subject to the limitations described above under
"Modification" applicable to the other debt securities. If the property
trustee of the Trust, as holder of junior subordinated debt securities, is
required to consent to any amendment, modification or termination of the
junior subordinated indenture, the property trustee will request directions
from the holders of the trust securities of the applicable Trust.
SUBORDINATION OF JUNIOR SUBORDINATED DEBT SECURITIES
The junior subordinated debt securities will be unsecured and will be
subordinate and junior in priority of payment to certain of our other
indebtedness to the extent described in a prospectus supplement. The junior
subordinated indenture will not limit the amount of junior subordinated debt
securities which we may issue, nor does it limit us from issuing any other
secured or unsecured debt.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
GENERAL
The amended declaration of each Trust authorizes the respective trustees
to issue, on behalf of the Trust, one series of trust preferred securities.
Each Trust will use the proceeds from the sale of the trust preferred
securities to purchase a series of our junior subordinated debt securities
issued. The property trustee will hold these junior subordinated debt
securities in trust for the benefit of the holders of such trust preferred
securities.
This section summarizes the general terms of the preferred securities
that the Trusts may offer. The prospectus supplement relating to any
particular preferred securities offered by a Trust will describe the specific
terms of the preferred securities, which may be in addition to or different
from the general terms summarized in this section. The summary in this section
and in any prospectus supplement does not describe every aspect of the trust
preferred securities offered and is subject to and qualified in its entirety
by reference to all the provisions of the amended declarations and the trust
preferred securities. The forms of the amended declarations and the trust
preferred securities are or will be filed as exhibits to or incorporated by
reference in the registration statement.
We will guarantee the payments of distributions and payments on
redemption or liquidation with respect to the trust preferred securities, but
only to the extent the Trust has funds available to make those payments and
has not made the payments. Our trust preferred securities guarantee is
described in more detail below under "Description of the Trust Preferred
Securities Guarantee."
The assets of each Trust available for distribution to the holders of its
<PAGE> 31
trust preferred securities will be limited to payments from us under the
series of junior subordinated debt securities held by the Trust. If we fail to
make a payment on the junior subordinated debt securities, the Trust will not
have sufficient funds to make related payments, including distributions, on
its trust preferred securities.
The trust preferred securities guarantee, when taken together with our
obligations under the series of junior subordinated debt securities, the
junior subordinated indenture and the amended declaration of the Trust, will
provide a full and unconditional guarantee of amounts due on the trust
preferred securities issued by each Trust.
The prospectus supplement relating to any particular preferred securities
offered by a Trust will describe the specific terms of the preferred
securities, which may be in addition to or different from the general terms
summarized in this section. In particular, the prospectus supplement will
describe:
* the name of such trust preferred securities;
* the designation of the trust preferred securities;
* the dollar amount and number of trust preferred securities issued;
* the annual distribution rate(s) or method of determining such
rate(s), the payment date(s) and the record dates used to determine
the holders who are to receive distributions;
* the date(s) or the method to determine the date(s) from which
distributions shall be cumulative;
* the optional redemption provisions, if any, including the prices,
time periods and other terms and conditions for which such trust
preferred securities shall be purchased or redeemed, in whole or in
part;
* the terms and conditions, if any, upon which the applicable series
of junior subordinated debt securities and the related trust
preferred securities guarantee may be distributed to holders of the
trust preferred securities upon liquidation, dissolution,
termination or winding up of the Trust;
* any voting rights of the trust preferred securities other than
those described in this section;
* any securities exchange on which the trust preferred securities
will be listed;
* whether the trust preferred securities are to be issued in
book-entry form and represented by one or more global certificates,
and if so, the depositary for the global certificates and the
<PAGE> 32
specific terms of the depositary arrangements;
* any other relevant rights, preferences, privileges, limitations or
restrictions of such trust preferred securities; and
* any applicable United States Federal income tax considerations.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amended declaration of each Trust states that the Trust shall be
dissolved:
* on the expiration of the term of the Trust;
* upon our bankruptcy, dissolution or liquidation;
* upon a change in law requiring the Trust to register as an
investment company under the Investment Company Act of 1940;
* unless we take certain actions, upon a change in the law resulting
in the Trust being subject to United States Federal income tax on
income received from the junior subordinated debt securities
held by the Trust, the interest payable by us on the junior
subordinated debt securities not being deductible for United States
Federal income tax purposes, or the Trust being subject to more
than a de minimus amount of other taxes;
* upon the redemption, conversion or exchange of all of the trust
securities of the Trust;
* upon the repayment of all of the junior subordinated debt
securities held by the Trust or at such time as no such junior
subordinated debt securities are outstanding;
* upon entry of a court order for the dissolution of the Trust; or
* upon our election to terminate the Trust and distribute the related
junior subordinated debt securities directly to the holders of the
trust securities.
In the event of a dissolution, after the Trust pays all amounts owed to
creditors, the holders of the trust securities will be entitled to receive:
* cash equal to the aggregate liquidation amount of each trust
security specified in an accompanying prospectus supplement, plus
accumulated and unpaid distributions to the date of payment; or
* junior subordinated debt securities in an aggregate principal
amount equal to the aggregate liquidation amount of the trust
securities.
If a Trust cannot pay the full amount due on its trust securities because
<PAGE> 33
insufficient assets are available for payment, then the amounts payable by the
Trust on its trust securities shall be paid pro rata. However, if an event of
default under the related indenture has occurred, the total amounts due on the
trust preferred securities will be paid before any distribution on the trust
common securities.
EVENTS OF DEFAULT
An event of default under the junior subordinated indenture relating to a
series of junior subordinated debt securities is an event of default under the
amended declaration of the Trust that owns those junior subordinated debt
securities. We have described these events of default under the sections
entitled "Description Debt Securities - Provisions Applicable to All Debt
Securities - Events of Default" and " - Provisions Applicable to Junior
Subordinated Debt Securities - Events of Default."
We and the regular trustees of each Trust must file annually with the
property trustee for the Trust a certificate stating whether or not they are
in compliance with all the applicable conditions and covenants under the
related amended declaration.
Upon the occurrence of an event of default, the property trustee of the
Trust, as the sole holder of the junior subordinated debt securities held by
the Trust, will have the right under the junior subordinated indenture to
declare the principal of, premium, if any, and interest on such junior
subordinated debt securities to be immediately due and payable.
If a property trustee fails to enforce its rights under the amended
declaration or the junior subordinated indenture then, to the fullest extent
permitted by law, and subject to the terms of the amended declaration and the
junior subordinated indenture, any holder of trust preferred securities may
sue us, or seek other remedies, to enforce the property trustee's rights under
the amended declaration or the junior subordinated indenture without first
instituting a legal proceeding against such property trustee or any other
person.
If we fail to pay principal, premium, if any, or interest on a series of
junior subordinated debt securities when payable, then a holder of such trust
preferred securities may directly sue us or seek other remedies, to collect
its pro rata share of payments owned.
REMOVAL AND REPLACEMENT OF TRUSTEES
Only the holders of trust common securities may remove or replace the
trustees of a Trust. The resignation or removal of any trustee and the
appointment of a successor trustee will be effective only on the acceptance of
appointment by the successor trustee in accordance with the provisions of the
amended declaration for the Trust.
<PAGE> 34
CONVERSION OR EXCHANGE RIGHTS
The applicable prospectus supplement will set forth the terms on which
the trust preferred securities are convertible into or exchangeable for our
common stock or other securities or securities of any other person. Such terms
will include provisions as to whether conversion or exchange is mandatory, at
the option of the holder or at our option, and may include provisions for
adjustment of the number of shares of common stock or other securities of ours
or any other person to be received by the holders of trust preferred
securities.
MERGERS, CONSOLIDATIONS, CONVERSIONS OR AMALGAMATIONS OF THE TRUSTS
The Trusts may not consolidate, amalgamate, merge with or into, or be
converted into or replaced by or convey, transfer or lease their properties
and assets substantially as an entirety to any other corporation or other
body, except as described below. A Trust may, with the consent of a majority
of its regular trustees and without the consent of the holders of its trust
securities or the other trustees, engage in any of the merger events referred
to above, provided that:
* the successor entity either
(1) assumes all of the obligations of the Trust relating to its
trust securities or
(2) substitutes other securities for the trust securities that are
substantially similar to such trust securities, so long as the
successor securities rank the same as such trust securities
for distributions and payments upon liquidation, redemption
and otherwise;
* we acknowledge a trustee of such successor entity who has the same
powers and duties as the property trustee of the Trust, as the
holder of the particular series of junior subordinated debt
securities;
* the trust preferred securities are listed, or any successor
securities will be listed, upon notice of issuance, on the same
national securities exchange or other organization that the trust
preferred securities are then listed;
* the merger event does not cause the trust preferred securities or
successor securities to be downgraded by any national rating
agency;
* the merger event does not adversely affect the rights, preferences
and privileges of the holders of the trust securities or successor
securities in any material way;
* the successor entity has a purpose identical to that of the Trust;
<PAGE> 35
* prior to the merger event, we have received an opinion of counsel
from a nationally recognized law firm stating that
(1) such merger event does not adversely affect the rights of the
holders of the Trust's preferred securities or any successor
securities in any material way (other than with respect to any
dilution of the holders' interest in the new entity) and
(2) following the merger event, neither the Trust nor the
successor entity will be required to register as an investment
company under the Investment Company Act of 1940; and
* we or any permitted successor owns all of the common stock of such
successor entity and guarantees the obligations of the successor
entity under the successor securities in the same manner as in the
trust preferred securities guarantee and the guarantee of the
common securities for the Trust.
In addition, unless all of the holders of the trust preferred securities
and trust common securities approve otherwise, the Trust may not consent to or
engage in a merger event if that event would cause the Trust or the successor
entity to be classified other than as a grantor trust for United States
federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF DECLARATION
The holders of trust preferred securities have no voting rights except as
discussed above under " - Mergers, Consolidations, Conversion or Amalgamations
of the Trust" and below under "Description of the Trust Preferred Securities
Guarantee - Amendments and Assignment," and as otherwise required by law or
the amended declaration for the Trust.
The amended declaration may be amended if approved by a majority of the
regular trustees of the Trust. However, if any proposed amendment provides
for, or such regular trustees otherwise propose,
* any action that would adversely affect the powers, preferences or
special rights of the trust securities, whether by way of amendment
to such amended declaration or otherwise or
* the dissolution, winding-up or termination of the Trust other than
by the terms of its amended declaration,
then the holders of the trust securities as a single class will be entitled to
vote on such amendment or proposal. In that case, the amendment or proposal
will only be effective if approved by a majority in liquidation amount of the
trust securities affected by such amendment or proposal.
If any amendment or proposal referred to in clause (1) above would
adversely affect only a particular class of the trust securities of the Trust,
then only the affected class will be entitled to vote on such amendment or
proposal. Such amendment or proposal will only be effective with the approval
<PAGE> 36
of a majority in liquidation amount of such affected class.
No amendment may be made to an amended declaration if such amendment
would:
* cause the Trust to be characterized as other than a grantor trust
for United States federal income tax purposes;
* impose any additional obligation on us without our consent;
* reduce or otherwise adversely affect the powers of the property
trustee; or
* cause the Trust to be deemed to be an "investment company" which is
required to be registered under the Investment Company Act.
The holders of a majority in aggregate liquidation amount of the trust
preferred securities have the right to:
* direct the time, method and place of conducting any proceeding for
any remedy available to the property trustee of the Trust; or
* direct the exercise of any trust or power conferred upon the
property trustee under the Trust's amended declaration, including
the right to direct the property trustee, as the holder of a series
of junior subordinated debt securities, to
(1) exercise the remedies available under the junior subordinated
indenture with respect to those junior subordinated debt
securities,
(2) waive any event of default under the junior subordinated
indenture that is waivable or
(3) cancel an acceleration of the principal of the junior
subordinated debt securities.
However, if the junior subordinated indenture requires the consent of the
holders of more than a majority in aggregate principal amount of the junior
subordinated debt securities, then the property trustee must get approval of
the holders of such "super-majority" in liquidation amount of the trust
preferred securities.
In addition, the property trustee will not be required to take certain of
the actions described above unless it has obtained an opinion of counsel
stating that, as a result of such action, the Trust will continue to be
classified as a grantor trust for United States federal income tax purposes.
The property trustee of the Trust will notify all holders of trust
preferred securities of the Trust of any notice received from the indenture
trustee with respect to the junior subordinated debt securities held by the
<PAGE> 37
Trust.
As described in the amended declaration, the property trustee may hold a
meeting to have holders of trust preferred securities vote on a change or have
them approve a change by written consent.
Any trust preferred securities that we or our affiliates own will be
treated as if they were not outstanding for purposes of any vote or consent of
trust preferred securities. This means:
.
* we and any of our affiliates will not be able to vote on or consent
to matters requiring the vote or consent of holders of trust
preferred securities and
* any trust preferred securities owned by us or any of our affiliates
will not be counted in determining whether the required percentage
of votes or consents has been obtained.
INFORMATION CONCERNING DUTIES OF THE PROPERTY TRUSTEE
For matters relating to compliance with the Trust Indenture Act, the
property trustee of the Trust will have all of the duties and responsibilities
of an indenture trustee under the Trust Indenture Act. The property trustee,
other than during the occurrence and continuance of an event of default under
the Trust, undertakes to perform only such duties as are specifically set
forth in the amended declaration and, upon an event of default, must use 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 given it by the
applicable amended declaration at the request of any holder of trust preferred
securities unless it is offered reasonable security or indemnity against the
costs, expenses and liabilities that it might incur. However, the holders of
the trust preferred securities will not be required to offer such an indemnity
where the holders, by exercising their voting rights, direct the property
trustee to take any action following an event of default.
MISCELLANEOUS
The regular trustees of a Trust are authorized and directed to conduct
the affairs of the Trust and to operate the Trust in such a way that
* it will not be deemed to be an "investment company" required to be
registered under the Investment Company Act;
* it will be classified as a grantor trust for United States federal
income tax purposes; and
* the junior subordinated debt securities held by it will be treated
as our indebtedness for the United States federal income tax
purposes.
<PAGE> 38
We and the regular trustees of the Trust are authorized to take any
action, so long as it is consistent with applicable law or the certificate of
trust or amended declaration, that we and the regular trustees of the Trust
determine to be necessary or desirable for such purposes.
Holders of trust preferred securities have no preemptive or similar
rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge
any of its assets.
GOVERNING LAW
The amended declaration and the related trust preferred securities will
be governed by and construed in accordance with the laws of the State of
Delaware and the Trust Indenture Act.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEE
GENERAL
We will execute a trust preferred securities guarantee, which benefits
the holders of trust preferred securities, at the time that a Trust issues
those trust preferred securities. The trust preferred securities guarantee
will be qualified as an indenture under the Trust Indenture Act and will be
held for the benefit of holders of trust preferred securities by a guarantee
trustee meeting the requirements of the Trust Indenture Act. Unless otherwise
indicated in a prospectus supplement, Wilmington Trust Company will be the
guarantee trustee.
GUARANTEE PAYMENT
This section summarizes the general terms of the guarantees that we will
provide in respect of the preferred securities that the Trusts may offer. The
summary in this section does not describe every aspect of the guarantee and is
subject to and qualified in its entirety by reference to any description in
the related prospectus supplement and to all the provisions of the guarantee
agreements. The form of the guarantee agreement is filed as an exhibit to the
registration statement.
We will irrevocably agree, as described in the trust preferred securities
guarantee, to pay in full, to the holders of the trust preferred securities
issued by a Trust, the following trust preferred securities guarantee payments
when due to the extent not paid by the Trust, regardless of any defense, right
of set-off or counterclaim which the Trust may have or assert:
* any accrued and unpaid distributions required to be paid on the
trust preferred securities, to the extent that the Trust has funds
<PAGE> 39
available to make the payment;
* the redemption price, to the extent that the Trust has funds
available to make the payment; and
* upon a voluntary or involuntary dissolution and liquidation of the
Trust (other than in connection with a distribution of junior
subordinated debt securities to holders of such trust preferred
securities or the redemption of all such trust preferred
securities), the lesser of
(1) the aggregate of the liquidation amount specified in the
prospectus supplement for each trust preferred security plus
all accrued and unpaid distributions on the trust preferred
securities to the date of payment, to the extent the Trust has
funds available to make the payment and
(2) the amount of assets of the Trust remaining available for
distribution to holders of its trust preferred securities upon
a dissolution and liquidation of the trust ("Liquidation
Payment").
Our obligation to make a trust preferred securities guarantee payment may
be satisfied by directly paying the required amounts to the holders of the
trust preferred securities or by causing the Trust to pay the amounts to the
holders.
The combined operation of our obligations under the junior subordinated
indenture and the trust preferred securities guarantee and amended declaration
has the effect of providing a full, irrevocable and unconditional guarantee of
the Trust's obligations under its trust preferred securities.
STATUS OF THE TRUST PREFERRED SECURITIES GUARANTEE
The trust preferred securities guarantee will constitute an unsecured
obligation of ours and will rank:
* subordinated and junior in right of payment to all of our other
liabilities, including the junior subordinated debt securities,
except those liabilities made equal or subordinate to the guarantee
by their terms; and
* senior to the following:
(1) all capital stock (other than the most senior preferred shares
issued, from time to time, by us, which will rank equally with
the guarantee) issued by us, and
<PAGE> 40
(2) any guarantee entered into by us relating to our capital
stock, other than the most senior preferred shares issued,
from time to time, by us.
The trust preferred securities guarantee will rank equally with
obligations under other guarantee agreements that we may enter into from time
to time if both:
* the agreements are in substantially the form of the preferred
securities guarantee and provide for comparable guarantees of
payment on preferred securities issued by other trusts or financing
vehicles of ours; and
* the debt relating to those preferred securities are junior
subordinated, unsecured indebtedness of ours.
By acceptance of the trust preferred securities, holders accept the
subordination provisions and other terms of the trust preferred securities
guarantee. The holder of the guaranteed security may sue us or seek other
remedies, to enforce its rights under the trust preferred securities guarantee
without first suing any other person or entity. The trust preferred securities
guarantee will not be discharged except by payment of the guarantee payments
in full to the extent not previously paid or upon distribution of the
corresponding series of junior subordinated debt securities to the holders of
trust preferred securities under the terms of the amended declaration.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the
rights of holders of trust preferred securities in any material respect, in
which case no consent of such holders will be required, a trust preferred
securities guarantee may only be amended with the prior approval of the
holders of a majority in aggregate liquidation amount of such trust preferred
securities. We have described the way to obtain any approval under
"Description of the Trust Preferred Securities - Voting Rights; Amendment of
Declaration." All guarantees and agreements contained in the trust preferred
securities guarantee will be binding on our successors, assigns, receivers,
trustees and representatives and are for the benefit of the holders of the
applicable trust preferred securities.
TRUST PREFERRED SECURITIES GUARANTEE EVENTS OF DEFAULT
An event of default under the trust preferred securities guarantee occurs
if we fail to make any of our required payments or perform our obligations
under the trust preferred securities guarantee.
The holders of at least a majority in aggregate liquidation amount of the
trust preferred securities will have the right to direct the time, method and
<PAGE> 41
place of conducting any proceeding for any remedy available to the guarantee
trustee or to direct the exercise of any trust or power given to the guarantee
trustee under the trust preferred securities guarantee.
INFORMATION CONCERNING DUTIES OF THE TRUST PREFERRED GUARANTEE TRUSTEE
The guarantee trustee under the trust preferred securities guarantee,
other than during the occurrence and continuance of an event of default under
the trust preferred securities guarantee, will only perform the duties that
are specifically described in the trust preferred securities guarantee. After
such a default, the trust preferred guarantee trustee will 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 its powers as described in
the trust preferred securities guarantee at the request of any holder of
covered trust preferred securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that it might incur.
TERMINATION OF THE TRUST PREFERRED SECURITIES GUARANTEE
The trust preferred securities guarantee will terminate once the trust
preferred securities are paid in full or upon distribution of the
corresponding series of junior subordinated debt securities to the holders of
the trust preferred securities. The trust preferred securities guarantee will
continue to be effective or will be reinstated if at any time any holder of
trust preferred securities must restore payment of any sums paid under such
trust preferred securities or such trust preferred securities guarantee.
GOVERNING LAW
The trust preferred securities guarantee will be governed by and
construed in accordance with the laws of the State of New York and the Trust
Indenture Act.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE TRUST PREFERRED SECURITIES GUARANTEE
AND THE SUBORDINATED DEBT SECURITIES HELD BY THE TRUST
Payments of distributions and redemption and liquidation payments due on
the trust preferred securities, to the extent the Trust has funds available
for the payments, will be guaranteed by us to the extent described above under
"Description of the Trust Preferred Securities Guarantee." The combined
operation of our obligations under the trust preferred securities guarantee,
amended declaration and the junior subordinated indenture has the effect of
providing a full, irrevocable and unconditional guarantee of each of the
Trusts' obligations under its trust preferred securities.
As long as we make payments of interest and other payments when due on
the junior subordinated debt securities held by a Trust, such payments will be
sufficient to cover the payment of distributions and redemption and
liquidation payments due on the trust preferred securities issued by the
<PAGE> 42
Trust. This is because:
* the aggregate principal amount of the junior subordinated debt
securities will be equal to the sum of the aggregate liquidation
amount of the trust securities;
* the interest rate and interest and other payment dates on the
junior subordinated debt securities will match the distribution
rate and distribution and other payment dates for the trust
preferred securities;
* we will pay for any and all costs, expenses and liabilities of each
Trust except the Trust's obligations under its trust preferred
securities; and
* each amended declaration provides that a Trust will not engage in
any activity that is not consistent with the limited purposes of
the Trust.
If and to the extent that we do not make payments on such junior
subordinated debt securities, the Trust will not have funds available to make
payments of distributions or other amounts due on its trust preferred
securities. In those circumstances, you will not be able to rely upon the
trust preferred securities guarantee for payment of these amounts. Instead,
you may directly sue us or seek other remedies to collect your pro rata share
of payments owed. If you sue us to collect payment, then we will assume your
rights as a holder of trust preferred securities under the amended declaration
to the extent we make a payment to you in any such legal action.
A holder of any trust preferred security may sue us, or seek other
remedies, to enforce its rights under the trust preferred securities guarantee
without first suing the guarantee trustee, the Trust or any other person or
entity.
PLAN OF DISTRIBUTION
We may sell common stock, preferred stock, any series of debt securities
or guarantees and the Trusts may sell trust preferred securities in one or
more of the following ways from time to time:
* to underwriters for resale to the public or to institutional
investors;
* directly to institutional investors; or
* through agents to the public or to institutional investors.
The offered securities may be distributed periodically in one or more
transactions at:
* a fixed price or prices, which may be changed;
<PAGE> 43
* market prices prevailing at the time of sale;
* prices related to the prevailing market prices; or
* negotiated prices.
In connection with the sale of offered securities, underwriters or agents
may receive compensation from us in the form of underwriting discounts or
commissions. They may also receive commissions from purchasers of offered
securities for whom they may act as agent. Underwriters or agents may sell
offered securities to or through dealers. Those dealers may receive
compensation in the form of discounts, concessions, or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agent.
The prospectus supplement will set forth the terms of the offering of the
securities, including the name or names of any underwriters or agents, the
purchase price of such securities and the proceeds to us or the Trusts, as the
case may be, from such sale, any underwriting discounts or agency fees and
other items constituting underwriters' or agents' compensation, any initial
public offering price, any discounts or concessions allowed or reallowed or
paid to dealers and any securities exchanges on which the securities may be
listed.
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale.
Unless otherwise set forth in a prospectus supplement, the obligations of
the underwriters to purchase any series of securities will be subject to
certain conditions precedent and the underwriters will be obligated to
purchase all of such series of securities, if any are purchased.
Underwriters, dealers, and agents participating in the distribution of
the offered securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
offered securities may be deemed to be underwriting discounts and commissions,
under the Securities Act of 1933. Underwriters and agents may be entitled
under agreements entered into with us and/or the Trusts to indemnification by
us and/or the Trusts against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to payments which
the underwriters or agents may be required to make in respect thereof.
Underwriters and agents and/or their affiliates may engage in
transactions with or perform services for us and our affiliates in the
ordinary course of business.
<PAGE> 44
Each series of offered securities will be a new issue of securities and
will have no established trading market, other than the common stock which is
listed on the New York Stock Exchange. Any common stock sold will be listed on
the New York Stock Exchange subject to official notice of issuance. Other
securities may or may not be listed on a national securities exchange. Any
underwriters to whom securities are sold by us or by a Trust for public
offering and sale may make a market in the securities, but such underwriters
will not be obligated to do so and may discontinue any market making at any
time without notice.
VALIDITY OF OFFERED SECURITIES
The validity of the offered securities will be passed upon for us by
Crowe & Dunlevy, A Professional Corporation, and for the underwriters or
agents, if any, by a firm named in the prospectus supplement relating to the
particular security. Certain matters of Delaware law relating to the trust
preferred securities will be passed upon on behalf of the Trusts by Richards,
Layton & Finger, P.A., special Delaware counsel to the Trusts.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K
for the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedule are incorporated by
reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing. Any future audited financial
statements and the reports with respect to such audited financial statements
of our independent public accountants hereafter incorporated by reference in
this prospectus and the registration statement will be incorporated in
reliance upon the authority of that firm as experts in giving those reports to
the extent such firm has audited those financial statements and consented to
the use of their reports with respect to such audited financial statements.
Certain estimates of our oil and gas reserves and related information as
of December 31, 1998 included in our Annual Report on Form 10-K for the year
ended December 31, 1998 and incorporated by reference in this prospectus and
elsewhere in the registration statement have been derived from engineering
reports prepared by our engineers and reviewed and reported on by Ryder Scott
Company, and all such information has been so incorporated in reliance on the
authority of such firm as experts regarding the matters contained in their
report. Future estimates of oil and gas reserves and related information
hereafter incorporated by reference in this prospectus and the registration
statement will be incorporated in reliance upon the reports of the firm
examining such oil and gas reserves and related information and upon the
authority of any such firm as experts regarding the matters contained in their
reports, to the extent such firm has consented to the use of their reports.
WHERE YOU CAN FIND MORE INFORMATION
<PAGE> 45
We file reports, proxy statements and other information with the
Securities and Exchange Commission. Our filings are available over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at the SEC's public reference rooms at:
* 450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549;
* Seven World Trade Center
13th Floor
New York, New York 10048; and
* Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60601.
You may call the SEC at (202) 942-8090 for more information on the public
reference rooms and their copy charges. You may also inspect the reports and
other information we file with the SEC at:
New York Stock Exchange
20 Broad Street
New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC that
covers the securities described in this prospectus. For further information
about us, the Trusts and the securities, you should refer to our registration
statement and its exhibits. In this prospectus, we have summarized material
provisions of contracts and other documents. Since this prospectus may not
contain all the information that you may find important, you should review the
full text of these documents. We have included copies of these documents as
exhibits to our registration statement. The registration statement can be
obtained from the SEC in the ways described above, or from us.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information we file with
them. This means that we can disclose important information to you by
referring you to those documents. Any information we reference in this manner
is considered part of this prospectus. Certain information we file with the
SEC after the date of this prospectus will automatically update and, to the
extent inconsistent, supersede the information contained in this prospectus.
We incorporate by reference the following document which we have filed
with the SEC:
* Annual Report on Form 10-K for the year ended December 31, 1998;
and
* Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
<PAGE> 46
We also incorporate by reference any future filings we will make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus but before the end of the offering of
the securities made by this prospectus.
You may request a copy of these filings, at no cost, by contacting us at:
Investor Relations Department
Louis Dreyfus Natural Gas Corp.
14000 Quail Springs Parkway, Suite 600
Oklahoma City, Oklahoma 73134-2600.
<PAGE>
<PAGE> 47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this
Registration Statement shall have been the meanings assigned to them in the
Prospectus which forms a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates of the expenses
that it will incur in connection with the offering described in the
Registration Statement:
SEC Registration Fee (actual fee). . . . . . . . . . . . . . $ 111,200
Printing and Engraving Expenses. . . . . . . . . . . . . . . 75,000
Legal Fees and Expenses. . . . . . . . . . . . . . . . . . . 125,000
Accountants' Fees and Expenses . . . . . . . . . . . . . . . 40,000
Rating Agencies' Fees. . . . . . . . . . . . . . . . . . . . 168,000
Transfer Agent's and Trustees' Fees and Expenses . . . . . . 50,000
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 25,000
---------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 594,200
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation provides that, pursuant to
Oklahoma law, the Company's directors shall not be liable for monetary damages
for breach of the directors' fiduciary duty of care to the Company and its
stockholders. The provision in the Certificate of Incorporation does not
eliminate the duty of care and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Oklahoma law. However, such remedies may not be effective in
all cases. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Company, as well
as acts or omissions not in good faith or involving intentional misconduct,
for knowing violations of law, for actions leading to improper personal
benefit to the director, and for payment of dividends or approval of stock
repurchases or redemptions that are unlawful under Oklahoma law. The
provision also does not affect a director's responsibilities under any other
law, such as the state or federal securities laws.
Under Section 1031 of the Oklahoma General Corporation Act, the Company
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933 ( the "Securities Act").
The Company's Certificate of Incorporation provides that the Company
shall indemnify its directors and officers to the fullest extent permitted by
Oklahoma law. The Certificate of Incorporation requires the Company to
<PAGE> 48
indemnify such persons against expenses, judgments, fines, settlements and
other amounts incurred in connection with any proceeding, whether actual or
threatened, to which any such person may be made a party by reason of the fact
that such person is or was a director or an officer of the Company or any of
its affiliated enterprises, provided such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal proceedings, had no
reasonable cause to believe his conduct was unlawful. However, in the case of
a derivative action, an officer or director will not be entitled to
indemnification in respect to any claim, issue or matter as to which such
person is adjudged to be liable to the Company, unless and only to the extent
that the court in which the action was brought determines that such person is
fairly and reasonably entitled to indemnity for expenses.
The Company has entered into Indemnification Agreements with each
director of the Company which require the Company to indemnify such persons
against certain liabilities and expenses incurred by any such persons by
reason of their status or service as directors or officers of the Company and
which set forth procedures that will apply in the event of a claim for
indemnification under such agreements. The Indemnification Agreements also
require that the Company use commercially reasonable efforts to maintain
policies of directors' liability insurance. The Company's directors and
officers are covered by directors and officers insurance policies providing
insurance protection for liabilities specified in such policies.
The forms of the Underwriting Agreements, which will be filed as Exhibits
hereto, will provide that the Underwriters will indemnify the Registrant, its
directors and officers and certain other persons against liabilities,
including liabilities under the Securities Act with respect to information
furnished in writing to the Registrant for use in this Registration Statement.
ITEM 16. EXHIBITS.
1.1 -- Form of Underwriting Agreement (for equity securities).*
1.2 -- Form of Underwriting Agreement (for debt securities).*
1.3 -- Form of Underwriting Agreement (for preferred securities of
the Trusts).*
4.1 -- Amended and Restated Certificate of Incorporation of the
Registrant (Incorporated by reference to Exhibit 3.1 of the
Registrant's Registration Statement on Form S-1,
Registration No. 33-69102).
4.2 -- Certificate of Merger of the Registrant dated September 9,
1993 (Incorporated by reference to Exhibit 3.2 of the
Registrant's Registration Statement on Form S-1,
Registration No. 33-69102).
4.3 -- Amended and Restated Bylaws of the Registrant (Incorporated
by reference to Exhibit 3.3 of the Registrant's Registration
<PAGE> 49
Statement on Form S-1, Registration No. 33-69102).
4.4 -- Certificate of Merger of the Registrant dated November 1,
1993 (Incorporated by reference to Exhibit 3.4 of the
Registrant's Registration Statement on Form S-1,
Registration No. 33-69102).
4.5 -- Indenture dated as of June 15, 1994 for $100,000,000 of
9-1/4% Senior Subordinated Notes due 2004 between the
Registrant, as Issuer, and Bank of Montreal Trust Company,
as Trustee (Incorporated by reference to Exhibit 10.2 of the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994).
4.6 -- Indenture dated as of December 11, 1997 for $200,000,000 of
6-7/8% Senior Notes due 2007 between the Registrant, as
Issuer, and LaSalle National Bank, as Trustee (Incorporated
by reference to Exhibit 4.1 of the Registrant's Registration
Statement on Form S-4, Registration No. 333-45773).
4.7** -- Form of Indenture with respect to senior indebtedness.
4.8** -- Form of Indenture with respect to subordinated indebtedness.
4.9** -- Form of Indenture with respect to junior subordinated
indebtedness to be issued to the Louis Dreyfus Natural Gas
Trust I and II.
4.10 -- Form of senior debt securities (included in Exhibit 4.7).
4.11 -- Form of subordinated debt securities (included in Exhibit
4.8).
4.12 -- Form of junior subordinated debt securities (included in
Exhibit 4.9).
4.13 -- Form of Certificate of Designation for preferred stock.*
4.14** -- Certificate of Trust of Louis Dreyfus Natural Gas Trust I.
4.15** -- Certificate of Trust of Louis Dreyfus Natural Gas Trust II.
4.16** -- Declaration of Trust of Louis Dreyfus Natural Gas Trust I.
4.17** -- Declaration of Trust of Louis Dreyfus Natural Gas Trust II.
<PAGE> 50
4.18** -- Form of Amended and Restated Declaration of Trust for the
Louis Dreyfus Natural Gas Trusts.
4.19 -- Form of Trust Preferred Security (included in Exhibit 4.18).
4.20** -- Form of Guarantee Agreement with respect to the Preferred
Securities of the Louis Dreyfus Natural Gas Trusts.
5.1** -- Opinion of Crowe & Dunlevy, A Professional Corporation.
5.2** -- Opinion of Richards, Layton & Finger, P.A.
12.1** -- Statement regarding computation of ratio of earnings to
fixed charges.
23.1 -- Consent of Crowe & Dunlevy (included in Exhibit 5.1).
23.2 -- Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2).
23.3*** -- Consent of Ernst & Young LLP.
23.4** -- Consent of Ryder Scott Company.
23.5 -- Consents of other experts, if required.*
24.1** -- Powers of Attorney.
25.1 -- Form T-1 Statement of Eligibility under Trust Indenture Act
of 1939 relating to Senior Indenture.*
25.2 -- Form T-1 Statement of Eligibility under Trust Indenture Act
of 1939 relating to Subordinated Indenture.*
25.3** -- Form T-1 Statement of Eligibility under Trust Indenture Act
of 1939 of Wilmington Trust Company as Trustee under Junior
Subordinated Indenture.
25.4** -- Form T-1 Statement of Eligibility under Trust Indenture Act
of 1939 of Wilmington Trust Company, as Property Trustee,
relating to Louis Dreyfus Natural Gas Trust I.
25.5** -- Form T-1 Statement of Eligibility under Trust Indenture Act
of 1939 of Wilmington Trust Company, as Property Trustee,
relating to Louis Dreyfus Natural Gas Trust II.
25.6** -- Form T-1 Statement of Eligibility under Trust Indenture Act
<PAGE> 51
of 1939 of Wilmington Trust Company, as Guarantee Trustee,
relating to Louis Dreyfus Natural Gas Trust I.
25.7** -- Form T-1 Statement of Eligibility under Trust Indenture Act
of 1939 of Wilmington Trust Company, as Guarantee Trustee,
relating to Louis Dreyfus Natural Gas Trust II.
- ----------------------
* To be filed as an exhibit to Form 8-K in reference to the specific
offering of securities, if any, to which it relates.
** Previously filed
*** Updated consent to be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), that are incorporated by reference
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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
<PAGE> 52
the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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 that time shall be deemed to be the initial
bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes if securities are to be
offered pursuant to competitive bidding (1) to use its best efforts to
distribute prior to the opening of bids, to prospective bidders, underwriters
and dealers, a reasonable number of copies of a prospectus which at that time
meets the requirements of section 10(a) of the Securities Act, and relating to
the securities offered at competitive bidding, as contained in this
Registration Statement, together with any supplements thereto, and (2) to file
an amendment to this Registration Statement reflecting the results of bidding,
terms of the reoffering and related matters to the extent required by the
applicable form, not later than the first use, authorized by the issuer after
the opening of bids, of a prospectus relating to the securities offered at
competitive bidding, unless no further public offering of such securities by
the issuer and no reoffering of such securities by the purchasers is proposed
to be made.
(d) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions referenced to in Item 15 of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling persons 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, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(e) The undersigned Registrant hereby undertakes that, for purposes of
<PAGE> 53
determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this 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 shall be deemed to be part of this Registration Statement as of the time
it was declared effective.
(f) The undersigned Registrant hereby undertakes to file applications for
the purpose of determining the eligibility of the trustees under the
indentures relating to senior indebtedness, subordinated indebtedness and
junior subordinated indebtedness to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Trust Indenture
Act.
<PAGE>
<PAGE> 54
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all 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 Oklahoma City, State of Oklahoma, on
July 13, 1999.
LOUIS DREYFUS NATURAL GAS CORP.
By: /s/ Jeffrey A. Bonney
------------------------------------
Jeffrey A. Bonney, Executive Vice
President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Mark E. Monroe * President, Chief Executive July 13, 1999
- ---------------------- Officer and Director (principal
Mark E. Monroe executive officer)
Richard E. Bross * Executive Vice President and July 13, 1999
- ---------------------- Director
Richard E. Bross
/s/Jeffrey A. Bonney Executive Vice President and July 13, 1999
- ---------------------- Chief Financial Officer
Jeffrey A. Bonney (principal financial and
accounting officer)
Simon B. Rich, Jr. * Chairman of the Board of July 13, 1999
- ---------------------- Directors
Simon B. Rich, Jr.
Mark Andrews * Vice Chairman of the Board of July 13, 1999
- ---------------------- Directors
Mark Andrews
E. William Barnett * Director July 13, 1999
- ----------------------
E. William Barnett
<PAGE> 55
Daniel R. Finn, Jr. * Director July 13, 1999
- ----------------------
Daniel R. Finn, Jr.
Peter G. Gerry * Director July 13, 1999
- ----------------------
Peter G. Gerry
Gerard Louis-Dreyfus * Director July 13, 1999
- ----------------------
Gerard Louis-Dreyfus
John H. Moore * Director July 13, 1999
- ----------------------
John H. Moore
James R. Paul * Director July 13, 1999
- ----------------------
James R. Paul
Ernest F. Steiner * Director July 13, 1999
- ----------------------
Ernest F. Steiner
* By: /s/ Jeffrey A. Bonney
-----------------------
Jeffrey A. Bonney
Attorney-in-fact
<PAGE> 56
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of Louis
Dreyfus Natural Gas Trust I and Louis Dreyfus Natural Gas Trust II certifies
that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and that it has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Oklahoma City, Oklahoma, on July
13, 1999.
LOUIS DREYFUS NATURAL GAS TRUST I
By: LOUIS DREYFUS NATURAL GAS CORP.,
as Sponsor
By: /s/ Jeffrey A. Bonney
---------------------------------
Jeffrey A. Bonney, Executive Vice
President and Chief Financial
Officer
LOUIS DREYFUS NATURAL GAS TRUST II
By: LOUIS DREYFUS NATURAL GAS CORP.,
as Sponsor
By: /s/ Jeffrey A. Bonney
---------------------------------
Jeffrey A. Bonney, Executive Vice
President and Chief Financial
Officer
