<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 2)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
TRITON ENERGY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: (i)
Class A ordinary shares, par value $.01 per share, of Triton Energy
Limited, Class B ordinary shares, par value $.01 per share, of Triton
Energy Limited and 1/10th of a share of preferred stock, par value $.01
per share, of Triton Energy Corporation, to be issued in connection with
the transaction and (ii) Common Stock, par value $1.00 per share of
Triton Energy Corporation ("Triton Delaware Common Stock"), to be
acquired by Triton Energy Limited in the transaction.
2) Aggregate number of securities to which transaction applies: 35,899,958
being the maximum number of shares of Triton Delaware Common Stock to be
acquired by Triton Energy Limited in the transaction.
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): The per unit
price of each share of Triton Delaware Common Stock is $53.438 (the
average high and low price of such stock on the New York Stock Exchange,
Inc. Composite Transaction Tape on December 19, 1995). The filing fee of
$383,684.39 is calculated in accordance with Rule 0-11(c)(1) under the
Exchange Act as one-fiftieth of one percent of the product of
$35,899,958 shares to be acquired in the transaction and $53.438.
4) Proposed maximum aggregate value of transaction: $1,918,421,956.00.
5) Total fee paid: $383,684.39.
/ / Fee paid previously with preliminary materials.
/X/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:
$383,684.39
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
Schedule 14(A)(File No. 1-7876)
------------------------------------------------------------------------
3) Filing Party:
Triton Energy Corporation
------------------------------------------------------------------------
4) Date Filed:
December 22, 1995
------------------------------------------------------------------------
<PAGE>
PRELIMINARY PROXY MATERIALS
, 1996
Dear Stockholder:
The Board of Directors of Triton Energy Corporation ("Triton Delaware") is
calling a Special Meeting of Stockholders to be held on , 1996 at
a.m., Dallas time, at which you will have the opportunity to consider the
reorganization of Triton Delaware. The Board of Directors is proposing that
Triton Energy Limited, a newly formed Cayman Islands company and a wholly owned
subsidiary of Triton Delaware ("Triton Cayman"), become the parent company of
Triton Delaware. As a result of the reorganization, Triton Cayman will carry on
the operations currently conducted by Triton Delaware.
Accompanying this letter is a Notice of Special Meeting of Stockholders
relating to the Special Meeting and a Proxy Statement/Joint Prospectus
describing in more detail the reorganization and related matters.
The Board of Directors believes that the reorganization will enable Triton
Delaware to create better returns for our stockholders. The establishment of a
Cayman Islands holding company will allow us to organize our international
business activities so that we will be able to benefit from more favorable
business, tax and financing environments than would be available to us if the
parent were a United States corporation. The creation of a Cayman Islands parent
corporation will minimize corporate income taxes because the Cayman Islands
generally imposes no corporate income taxes on foreign income. By contrast, the
U.S. tax system imposes corporate income tax on the worldwide income of United
States corporations. The U.S. system imposes significant unnecessary costs for
companies such as Triton Delaware that conduct substantially all of their
operations outside the United States. These costs will be minimized to the
extent that our operations -- for example, in the Malaysia-Thailand Joint
Development Area, which is subject to no local income tax for eight years -- are
conducted after the reorganization by Triton Cayman or its foreign subsidiaries.
Subject to the limited election described below, at the effective time of
the reorganization the holders of Triton Delaware Common Stock will become
holders of Triton Cayman's Class A ordinary shares. The Class A ordinary shares
will have substantially the same attributes as Triton Delaware's Common Stock
and will be listed on the New York Stock Exchange under the symbol "OIL." The
exchange of Triton Delaware Common Stock for Class A ordinary shares will be a
taxable transaction in which gain, if any (but not loss), will be recognized by
exchanging stockholders.
The Board has also provided an alternative under which stockholders may wish
to elect to receive an "Equity Unit." The Equity Unit will consist of one-tenth
of one share of Triton Delaware Preferred Stock and one Triton Cayman Class B
ordinary share. The Triton Delaware Preferred Stock will allow stockholders to
retain a direct interest in Triton Delaware that provides certain preferences.
The transaction has been structured with the intention that the receipt of the
Triton Delaware Preferred Stock component of the Equity Unit, which Triton
Delaware believes would represent approximately % of the value of the Equity
Unit at the date of this Proxy Statement/Joint Prospectus, will not be taxable.
Consequently, stockholders electing to receive an Equity Unit will have the
opportunity to defer a substantial portion of any taxable gain that they would
otherwise recognize as a result of the reorganization by retaining a direct
interest in Triton Delaware. All stockholders are urged, however, to read the
accompanying Proxy Statement/Joint Prospectus and to consult with their own tax
and other advisors about their decision to accept Class A ordinary shares or to
elect to receive Equity Units and the reorganization generally.
The Board and its financial advisors believe each Equity Unit will have
substantially the same value as one Class A ordinary share on the date of the
Reorganization. Application has been made to list the Equity Units for trading
on the New York Stock Exchange under the symbol "OIL.B". The Equity Units will
only be issued for up to 25% of Triton Delaware's Common Stock, however, and
<PAGE>
therefore are expected to be less liquid than the Class A ordinary shares. If
the holders of less than 15% of Triton Delaware's Common Stock elect to receive
Equity Units, none will be issued in order to avoid the expense and complication
of creating and maintaining the Equity Units.
Triton Delaware's executive officers generally intend to elect to receive
Class A ordinary shares in the reorganization, except with respect to shares of
Triton Delaware Common Stock that have not been held long enough to qualify for
long-term capital gains tax treatment.
Please carefully read the accompanying Notice of Special Meeting of
Stockholders and Proxy Statement/Joint Prospectus for details of the
reorganization and related information.
It is important that your shares be represented regardless of whether you
plan to be present at the Special Meeting. Approval of the reorganization
requires the favorable vote of a majority of the outstanding shares. Please
complete, date and sign the enclosed proxy card and mail it promptly in the
enclosed return envelope. (No postage is required if mailed in the United
States.)
The Board of Directors of Triton Delaware unanimously has approved the
proposed reorganization and recommends that stockholders vote for the adoption
of the Agreement and Plan of Merger.
Thank you for your cooperation.
Sincerely,
Thomas G. Finck
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
<PAGE>
PRELIMINARY PROXY MATERIALS
TRITON ENERGY CORPORATION
6688 NORTH CENTRAL EXPRESSWAY
SUITE 1400
DALLAS, TEXAS 75206-9926
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD , 1996
------------------------
To the Stockholders of
TRITON ENERGY CORPORATION
Notice is hereby given that a special meeting of stockholders of Triton
Energy Corporation, a Delaware corporation ("Triton Delaware"), will be held at
a.m., Dallas time, on , 1996, at Triton Energy Corporation, 6688
North Central Expressway, 12th Floor, Dallas, Texas 75206 (or at any
adjournments or postponements thereof). The special meeting is being held to
consider and vote on a proposal to approve the Agreement and Plan of Merger, a
copy of which is attached as Annex I to the accompanying Proxy Statement/Joint
Prospectus, pursuant to which Triton Energy Limited, a newly formed Cayman
Islands company and a wholly-owned subsidiary of Triton Delaware ("Triton
Cayman"), will become the parent holding company of Triton Delaware, as more
fully described in the accompanying Proxy Statement/Joint Prospectus. The
stockholders of Triton Delaware may also transact such other business as may be
properly brought before the special meeting or any adjournments or postponements
thereof.
Only holders of record of Triton Delaware Common Stock at the close of
business on , 1996 are entitled to receive notice of, and to vote
(or to grant proxies to vote) at, the special meeting, or any adjournments or
postponements thereof. The special meeting may be adjourned from time to time
without notice other than announcement at the special meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF
SHARES YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE SPECIAL
MEETING IN PERSON, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND
MAIL IT PROMPTLY TO TRITON DELAWARE IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES. IF YOU RECEIVE MORE THAN ONE PROXY
CARD BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR AT DIFFERENT
ADDRESSES, EACH SUCH PROXY CARD SHOULD BE SIGNED AND RETURNED TO ENSURE THAT ALL
OF YOUR SHARES WILL BE VOTED. THE PROXY CARD SHOULD BE SIGNED BY ALL REGISTERED
HOLDERS EXACTLY AS THE STOCK IS REGISTERED. IF YOU ATTEND THE SPECIAL MEETING
AND WISH TO VOTE IN PERSON, YOUR PROXY WILL NOT BE USED. PLEASE DO NOT SEND
CERTIFICATES FOR YOUR SHARES OF TRITON DELAWARE COMMON STOCK WITH YOUR PROXY
CARD.
This notice, the Proxy Statement/Joint Prospectus and the other materials
that are enclosed herewith are sent to you by order of the Board of Directors of
Triton Delaware.
By Order of the Board of Directors
Robert B. Holland, III
SECRETARY
Dallas, Texas
, 1996
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 9, 1996.
PRELIMINARY PROXY MATERIALS
TRITON ENERGY CORPORATION
------------------
PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS
------------------------
TRITON ENERGY LIMITED
TRITON ENERGY CORPORATION
PROSPECTUS FOR
UP TO CLASS A ORDINARY SHARES OF TRITON ENERGY LIMITED
UP TO UNIT DEPOSITARY SHARES, EACH REPRESENTING
ONE EQUITY UNIT CONSISTING OF ONE CLASS B ORDINARY SHARE
OF TRITON ENERGY LIMITED AND 1/10 OF A SHARE OF
PARTICIPATING PREFERRED STOCK OF TRITON ENERGY CORPORATION
This Proxy Statement/Joint Prospectus ("Proxy Statement/Prospectus") is
being furnished to stockholders of Triton Energy Corporation, a Delaware
corporation ("Triton Delaware"), in connection with the solicitation of proxies
by the Board of Directors of Triton Delaware for use at the special meeting of
Triton Delaware stockholders (the "Special Meeting") to be held at Triton Energy
Corporation, 6688 North Central Expressway, 12th Floor, Dallas, Texas 75206 on
, 1996 at a.m., Dallas time (or at any adjournments or
postponements thereof). This Proxy Statement/Prospectus relates to the proposed
reorganization (the "Reorganization") pursuant to which Triton Energy Limited, a
newly formed Cayman Islands company and a wholly-owned subsidiary of Triton
Delaware ("Triton Cayman"), will become the parent holding company of Triton
Delaware through the merger (the "Merger") of TEL Merger Corp., a Delaware
corporation and a newly formed, wholly-owned subsidiary of Triton Cayman
("Sub"), with and into Triton Delaware. The Reorganization will be effected
pursuant to the Agreement and Plan of Merger, dated as of , 1996
(the "Merger Agreement"), among Triton Delaware, Triton Cayman and Sub. Upon
consummation of the Merger, each outstanding share of common stock, par value
$1.00 per share, of Triton Delaware ("Triton Delaware Common Stock") (other than
those shares held by Triton Delaware in its treasury and those shares with
respect to which an Equity Unit Election (as hereinafter defined) has been
properly made and not withdrawn, subject to the Equity Unit Limitation (as
hereinafter defined)) will be automatically converted into one class A ordinary
share, par value $.01 per share ("Class A Share"), of Triton Cayman.
In connection with the Merger, holders of not less than 15% but not more
than 25% of the outstanding shares of Triton Delaware Common Stock (the "Equity
Unit Limitation"), in the aggregate, may make an unconditional election (the
"Equity Unit Election") to receive an equity unit ("Equity Unit") consisting of
(i) one class B ordinary share, par value $.01 per share ("Class B Share"), of
Triton Cayman and (ii) one-tenth of one share of participating preferred stock,
par value $.01 per share, of Triton Delaware ("Triton Delaware Preferred
Stock"), for each share of Triton Delaware Common Stock owned of record by such
stockholder in lieu of such shares being automatically converted into Class A
Shares. Each such Class B Share and fraction of a share of Triton Delaware
Preferred Stock will be paired and after such pairing, such securities may only
be traded together as a unit and will not be separately transferable. The Equity
Units will be deposited with Chemical Mellon Shareholder Services, L.L.C. as
depositary (the "Depositary") in exchange for the issuance of Depositary Shares
(the "Unit Depositary Shares"), each representing one Equity Unit, receipts for
which ("Receipts") will be distributed to stockholders. See "Description of
Triton Cayman Authorized Shares," "Description of Receipts" and "Comparison of
Rights of Stockholders."
Triton Delaware Common Stock is currently listed on the New York Stock
Exchange (the "NYSE") under the symbol "OIL" and, immediately following the
Reorganization, the Class A Shares will be listed on the NYSE under the same
symbol. The last reported sale price for the Triton Delaware Common Stock on the
New York Stock Exchange Composite Transactions Tape on February 8, 1996 was
$54.25. Currently, there is no established public trading market for the Class A
Shares or the Unit Depositary Shares. Application has been made to list the Unit
Depositary Shares on the NYSE.
FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH THE REORGANIZATION, SEE "RISKS FACTORS," BEGINNING ON PAGE 23.
------------------------
This Proxy Statement/Prospectus and the form of proxy are first being mailed
to the stockholders of Triton Delaware on or about , 1996.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS , 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
AVAILABLE INFORMATION................................ 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...... 3
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN
PERSONS............................................. 4
SUMMARY OF SECURITIES TO BE RECEIVED IN CONNECTION
WITH THE REORGANIZATION............................. 5
SUMMARY.............................................. 9
Special Meeting.................................... 9
Triton Delaware.................................... 9
Triton Cayman...................................... 9
The Reorganization................................. 10
Recommendation of the Board of Directors........... 14
Vote Required for Adoption......................... 15
Comparison of Rights of Stockholders............... 16
Odd Lot Shares..................................... 16
Tax Considerations................................. 16
Rights of Dissenting Stockholders.................. 19
Accounting Treatment of the Reorganization......... 19
Risk Factors....................................... 19
Stock Exchange Listing............................. 19
Depositary and Exchange Agent...................... 19
SELECTED HISTORICAL FINANCIAL AND OIL AND GAS DATA... 20
SUMMARY PRO FORMA FINANCIAL INFORMATION.............. 22
RISK FACTORS......................................... 23
Certain Tax Consequences........................... 23
Absence of Prior Market............................ 23
No Assurance as to Trading Value................... 23
The Oil and Gas Industry Generally................. 24
Triton Delaware's Financial Position............... 24
Environmental Matters.............................. 24
Risks of Foreign Operations........................ 25
Certain Factors Relating to Colombia............... 25
Regulatory Matter.................................. 25
THE SPECIAL MEETING.................................. 26
Special Meeting.................................... 26
Record Date........................................ 26
Vote Required for Adoption......................... 26
Proxies............................................ 26
Solicitation of Proxies............................ 27
Proposals of Stockholders.......................... 27
TRITON DELAWARE AND TRITON CAYMAN.................... 28
TRITON ENERGY LIMITED AND SUBSIDIARIES PRO FORMA
FINANCIAL INFORMATION............................... 29
THE REORGANIZATION................................... 42
General............................................ 42
Background and Reasons for the Reorganization...... 42
The Merger Agreement............................... 43
Conditions to Consummation of the Reorganization... 44
Equity Unit Election............................... 44
Effective Time..................................... 45
Rights of Dissenting Stockholders.................. 45
Exchange of Share Certificates..................... 46
Odd-Lot Program.................................... 46
Stock Compensation Plans........................... 46
Shareholder Rights Plan............................ 47
Stock Exchange Listing............................. 47
Accounting Treatment of the Reorganization......... 47
Transfer of Assets................................. 47
CERTAIN TAX CONSIDERATIONS........................... 47
DESCRIPTION OF AUTHORIZED SHARES OF TRITON CAYMAN.... 54
<CAPTION>
PAGE
-----
<S> <C>
Ordinary Shares; General........................... 55
Voting and Other Rights............................ 56
Special Rights Upon the Occurrence of Certain
Events............................................ 57
Dividend Rights.................................... 57
Purchase of Equity Units........................... 58
Liquidation of Triton Delaware..................... 58
Liquidation of Triton Cayman....................... 59
Changes in Capitalization.......................... 60
Distributions...................................... 60
Stock Dividends.................................... 60
Reduction of Capital and Purchase of Shares........ 61
Transfer of Shares................................. 61
Preference Shares.................................. 61
DESCRIPTION OF TRITON DELAWARE PREFERRED STOCK....... 65
General............................................ 65
Dividends.......................................... 66
Liquidation Rights................................. 66
Purchase of Equity Units........................... 67
Voting Rights...................................... 68
Preemptive Rights.................................. 69
DESCRIPTION OF RECEIPTS.............................. 69
Receipts........................................... 69
Deposit and Withdrawal of Deposited Securities..... 69
Dividends, Other Distributions and Rights.......... 70
Record Dates....................................... 71
Voting of the Underlying Deposited Securities...... 71
Inspection of Transfer Books....................... 71
Reports and Notices................................ 71
Changes Affecting Deposited Class B Shares......... 72
Purchase of Equity Units........................... 72
Exchange of Receipts upon Conversion of Class B
Shares or Class C Shares.......................... 73
Resignation and Removal of Depositary.............. 73
Amendment and Termination of the Deposit
Agreement......................................... 73
Charges of Depositary.............................. 74
General............................................ 74
COMPARISON OF RIGHTS OF STOCKHOLDERS................. 75
Stockholder Approval of Business Combinations...... 75
Absence of Required Vote for Certain Mergers....... 76
Appraisal Rights................................... 76
Stockholder Consent to Action Without Meeting...... 77
Special Meetings of Stockholders................... 77
Distributions and Dividends; Repurchases and
Redemptions....................................... 77
Vacancies on Board of Directors.................... 77
Removal of Directors; Staggered Term of
Directors......................................... 77
Inspection of Books and Records.................... 78
Amendment of Charter............................... 78
Amendment of Bylaws................................ 78
Indemnification of Directors and Officers.......... 78
Limited Liability of Directors..................... 79
Stockholders' Suits................................ 79
MANAGEMENT OF TRITON CAYMAN.......................... 79
Committees of the Board of Directors............... 80
Executive Compensation............................. 80
LEGAL MATTERS........................................ 80
EXPERTS.............................................. 80
FORWARD LOOKING INFORMATION.......................... 81
GLOSSARY OF DEFINED TERMS............................ 82
TRITON ENERGY LIMITED -- INDEX TO FINANCIAL
STATEMENT........................................... F-1
</TABLE>
2
<PAGE>
AVAILABLE INFORMATION
Triton Delaware is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Triton Delaware may be inspected and
copied at the public reference facilities maintained by the Commission, 450
Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549; and at
regional offices of the Commission at the Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center, New
York, New York 10048. Copies of such material may be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Triton Delaware Common Stock is
listed on the NYSE. Reports, proxy statements and other information concerning
Triton Delaware may also be inspected and copied at the offices of such exchange
at 20 Broad Street, New York, New York 10005. In addition, reports, proxy
statements and other information concerning Triton Delaware can be inspected at
the offices of Triton Delaware, 6688 North Central Expressway, Suite 1400,
Dallas, Texas 75206-9926. Following the Reorganization, both Triton Delaware and
Triton Cayman will file such reports and other information under the Exchange
Act.
Triton Delaware and Triton Cayman have filed with the Commission a
Registration Statement on Form S-4 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Triton Delaware Preferred Stock, the Unit Depositary Shares, the Class A Shares
and the Class B Shares offered hereby. This Proxy Statement/Prospectus, which
constitutes a part of that Registration Statement, does not contain all the
information set forth in that Registration Statement and the exhibits relating
thereto. Statements made in this Proxy Statement/ Prospectus as to the contents
of any contract, agreement or other document are not necessarily complete; and
while Triton Delaware and Triton Cayman believe the descriptions of the material
provisions of such contracts, agreements and other documents contained in this
Proxy Statement/ Prospectus are accurate summaries of such material provisions,
reference is made to such contract, agreement or other document filed as an
exhibit to the Registration Statement for a more complete description of the
matter involved, and each such statement is qualified in its entirety by such
reference.
Triton Cayman and Triton Delaware will also furnish the Depositary for the
Unit Depositary Shares with all notices of shareholder meetings and other
reports and communications that are made generally available to shareholders of
Triton Cayman and Triton Delaware. Such Depositary will, to the extent permitted
by law, arrange for the prompt transmittal to the holders of Unit Depositary
Shares of all notices, reports and communications provided by Triton Cayman and
Triton Delaware and will make such notices, reports and communications, together
with the governing instruments affecting the Class B Shares and the Triton
Delaware Preferred Stock and amendments thereto, available for inspection by
holders of Unit Depositary Shares at such Depositary's office, presently located
at .
Upon completion of the Reorganization, Triton Cayman expects that the Class
A Shares and the Unit Depositary Shares will be listed on the NYSE. At the time
of such listing, the Triton Delaware Common Stock will be delisted and will no
longer be registered pursuant to Section 12 of the Exchange Act.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Triton Delaware hereby incorporates by reference in this Proxy
Statement/Prospectus the following documents previously filed by Triton Delaware
with the Commission pursuant to the Exchange Act: (i) Triton Delaware's Current
Report on Form 8-K dated August 24, 1995 that includes the restated consolidated
financial statements to reflect the aviation sales and services segment as
discontinued operations, (ii) Triton Delaware's Transition Report on Form 10-K
for the transition period
3
<PAGE>
from June 1, 1994 to December 31, 1994, (iii) Triton Delaware's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and
September 30, 1995, and (iv) Triton Delaware's Current Reports on Form 8-K filed
June 2, 1995, June 8, 1995 and February 9, 1996.
Each document filed by Triton Delaware pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Proxy
Statement/Prospectus and prior to the termination of the offering of the
securities pursuant hereto shall be deemed to be incorporated by reference in
this Proxy Statement/Prospectus and to be a part of this Proxy
Statement/Prospectus from the date of filing of such document. Any statement
contained in this Proxy Statement/Prospectus or in a document incorporated or
deemed to be incorporated by reference in this Proxy Statement/Prospectus shall
be deemed to be modified or superseded for purposes of the Registration
Statement and this Proxy Statement/Prospectus to the extent that a statement
contained in this Proxy Statement/ Prospectus or in any subsequently filed
document that also is or is deemed to be incorporated by reference in this Proxy
Statement/Prospectus modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or this Proxy
Statement/Prospectus.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THE INCORPORATED
DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE THEREIN) WILL BE FURNISHED UPON REQUEST
WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS
DELIVERED. WRITTEN OR TELEPHONE REQUESTS SHOULD BE DIRECTED TO TRITON ENERGY
CORPORATION, 6688 NORTH CENTRAL EXPRESSWAY, SUITE 1400, DALLAS, TEXAS
75206-9926, ATTENTION: INVESTOR RELATIONS, TELEPHONE (214) 691-5200. IN ORDER TO
ENSURE TIMELY DELIVERY OF THE INCORPORATED DOCUMENTS, ANY REQUEST SHOULD BE MADE
BY , 1996.
------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
Neither delivery of this Proxy Statement/Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of Triton Delaware and Triton Cayman since the
date of this Proxy Statement/Prospectus.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
Triton Cayman is a Cayman Islands company, certain of its officers and
directors may be residents of various jurisdictions outside the United States
and its Cayman Islands counsel, W.S. Walker & Company, are residents of the
Cayman Islands. All or a substantial portion of the assets of Triton Cayman and
of such persons may be located outside the United States. As a result, it may be
difficult for investors to effect service of process within the United States
upon such persons or to enforce in United States courts judgments obtained
against such persons in United States courts and predicated upon the civil
liability provisions of the Securities Act. Notwithstanding the foregoing,
Triton Cayman has irrevocably agreed that it may be served with process with
respect to actions based on offers and sales of securities made hereby in the
United States by serving Robert B. Holland, III, c/o Triton Energy Corporation,
6688 North Central Expressway, Suite 1400, Dallas, Texas 75206-9926, its United
States agent appointed for that purpose. Triton Cayman has been advised by its
Cayman Islands counsel, W.S. Walker & Company, that there is doubt as to whether
Cayman Islands courts would enforce (a) judgments of United States courts
obtained in actions against such persons or Triton Cayman that are predicated
upon the civil liability provisions of the Securities Act or (b) in original
actions brought against Triton Cayman or such persons predicated upon the
Securities Act. There is no treaty in effect between the United States and the
Cayman Islands providing for such enforcement, and there are grounds upon which
Cayman Islands courts may not enforce judgments of United States courts. Certain
remedies available under the United States federal securities laws would not be
allowed in Cayman Islands courts as contrary to that nation's policy.
4
<PAGE>
SUMMARY OF SECURITIES TO BE RECEIVED
IN CONNECTION WITH THE REORGANIZATION
THE FOLLOWING IS A SUMMARY OF THE SECURITIES TO BE RECEIVED IN THE
REORGANIZATION BY HOLDERS OF TRITON DELAWARE COMMON STOCK (I) WHO DO NOT MAKE AN
EQUITY UNIT ELECTION AND (II) WHO MAKE AN EQUITY UNIT ELECTION. THIS SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION CONTAINED IN THIS
PROXY STATEMENT/PROSPECTUS AND THE ANNEX HERETO. UNLESS OTHERWISE DEFINED
HEREIN, CAPITALIZED TERMS USED IN THIS SUMMARY HAVE THE RESPECTIVE MEANINGS
ASCRIBED TO THEM ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS. SEE "GLOSSARY OF
DEFINED TERMS." STOCKHOLDERS ARE URGED TO READ CAREFULLY THIS PROXY
STATEMENT/PROSPECTUS AND THE ANNEXES HERETO IN THEIR ENTIRETY.
<TABLE>
<CAPTION>
NO ELECTION BY ELECTION BY TRITON DELAWARE
TRITON DELAWARE STOCKHOLDER STOCKHOLDER TO RECEIVE EQUITY UNITS
----------------------------------------- -----------------------------------------
<S> <C> <C>
SECURITY RECEIVED IN Each share of Triton Delaware Common Each share of Triton Delaware Common
EXCHANGE FOR TRITON Stock will be automatically converted Stock will be exchanged for an Equity
DELAWARE COMMON into one Class A Share of Triton Cayman. Unit comprised of (i) one Class B Share
STOCK IN THE MERGER of Triton Cayman and (ii) one-tenth of
one share of Triton Delaware Preferred
Stock, which securities will be paired
and after such pairing may only be trad-
ed together as a unit and will not be
separately transferable.
TAX CONSEQUENCES The receipt of Class A Shares in ex- Special tax counsel to Triton Delaware
change for shares of Triton Delaware are of the opinion that it is more likely
Common Stock will be a taxable than not that the shares of Triton
transaction to the stockholder in which Delaware Preferred Stock will be treated
gain, if any (but not loss), will be as stock of Triton Delaware and that the
recognized. See "Certain Tax receipt of shares of Triton Delaware Pre-
Considerations." ferred Stock will not be a taxable
transaction. However, in view of the
absence of any authority dealing with
transactions similar to the Re-
organization or securities of a type
similar to the Equity Units, no as-
surance can be given that the Internal
Revenue Service (the "IRS") or the courts
will agree. In any event, the receipt of
Class B Shares in exchange for shares of
Triton Delaware Common Stock will be a
taxable transaction to the stockholder in
which gain, if any (but not loss), will
be recognized. See "Certain Tax
Considerations."
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NO ELECTION BY ELECTION BY TRITON DELAWARE
TRITON DELAWARE STOCKHOLDER STOCKHOLDER TO RECEIVE EQUITY UNITS
----------------------------------------- -----------------------------------------
ELECTION PROCEDURE As of the Effective Time of the Merger, Properly complete and sign the Form of
stockholders who do not make an Equity Election accompanying this Proxy
Unit Election will automatically become Statement/Prospectus. Such form, together
owners of the Class A Shares without with certificates for the shares of
taking any action. Triton Delaware Common Stock to which
such form relates, duly endorsed in blank
or otherwise acceptable for transfer on
the books of Triton Delaware (or by
appropriate guarantee of delivery, as set
forth in such form) must be received by
the Exchange Agent by 5:00 p.m., New York
City time, on the third business day next
preceding the date of the Special
Meeting.
<S> <C> <C>
PRORATION Not applicable. If the number of Electing Shares exceeds
25% of the number of shares of Triton
Delaware Common Stock outstanding
immediately prior to the effective time
of the Merger (the "Maximum Election
Number"), then the aggregate number of
Electing Shares to be exchanged for Eq-
uity Units in the Merger in connection
with any Equity Unit Election will be
reduced by multiplying the number of
Electing Shares covered by such Equity
Unit Election by a proration factor (the
"Proration Factor") determined by
dividing the Maximum Election Number by
the total number of Electing Shares. The
number of Electing Shares covered by each
Equity Unit Election which will be
exchanged for Equity Units will be that
number which results from multiplying the
number of such Electing Shares by the
Proration Factor. Electing Shares not
exchanged for Equity Units as a result of
proration will instead be automatically
converted into Class A Shares. In the
event that the number of Electing Shares
is less than 15% of the number of shares
of Triton Delaware Common Stock out-
standing immediately prior to the Merger,
no Equity Units will be issued and
Electing Shares will be automatically
converted into Class A Shares.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NO ELECTION BY ELECTION BY TRITON DELAWARE
TRITON DELAWARE STOCKHOLDER STOCKHOLDER TO RECEIVE EQUITY UNITS
----------------------------------------- -----------------------------------------
DIVIDENDS Holders of Class A Shares will be Holders of Equity Units will be entitled
entitled to receive, at any time, such to receive, if declared by the Board of
dividends as are declared by the Board of Directors of Triton Delaware or Triton
Directors of Triton Cayman. Aggregate Cayman, as the case may be, (a) dividends
dividends declared on one Class A Share on the Triton Delaware Preferred Stock
are expected to be equivalent to the pari passu with Triton Delaware's common
aggregate dividends, if any, declared and stock outstanding after the Merger, in
paid on the securities included in an Eq- such amounts as the Board of Directors of
uity Unit, considered as a whole. Triton Delaware, in its discretion, may
determine, in an amount equal to the
product of the aggregate amount of such
dividends paid and the percentage of
shares of Triton Delaware Common Stock
that receive Equity Units in the Merger,
subject to certain adjustments and (b)
dividends on the Class B Shares in such
amounts as the Board of Directors of
Triton Cayman may determine, subject to
certain preferential rights of the
holders of the Class A Shares.
<S> <C> <C>
REDEMPTION The Class A Shares are not subject to The shares of Triton Delaware Preferred
redemption. Stock are not subject to redemption
except pursuant to the purchase right
described below.
PURCHASE RIGHT Not applicable. The Equity Units are subject to purchase
by Triton Cayman or Triton Delaware, in
whole or in part, at any time on or after
, 1999 or by Triton Cayman
immediately prior to the date on which a
sale or other disposition of the stock of
Triton Delaware is consummated. The
purchase price for the Equity Units will
generally be equal to the greater of .95
of a Class A Share and the fair market
value of an Equity Unit, payable in cash
or, by Triton Cayman, in ordinary shares.
Neither Triton Cayman nor Triton Delaware
can exercise its option to purchase the
Equity Units in certain circumstances,
including in the event of the bankruptcy
or insolvency of Triton Delaware.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NO ELECTION BY ELECTION BY TRITON DELAWARE
TRITON DELAWARE STOCKHOLDER STOCKHOLDER TO RECEIVE EQUITY UNITS
----------------------------------------- -----------------------------------------
LIQUIDATION Upon the liquidation of Triton Cayman, Upon the liquidation of Triton Delaware,
holders of Class A Shares are entitled to a holder of one-tenth of one share of
receive an amount equal to certain Triton Delaware Preferred Stock is
payments made with respect to one-tenth entitled to receive a liquidation
of one share of Triton Delaware Preferred preference equal to the fair market value
Stock and will thereafter participate in of one-tenth of one share of Triton
the assets of Triton Cayman pari passu Delaware Preferred Stock at the Effective
with the holders of any other class of Time, as determined by Triton Delaware
Ordinary Shares outstanding. upon the advice of its financial advisors
and will share thereafter in any other
distribution of assets by Triton Delaware
with the holders of the common stock of
Triton Delaware. Upon the liquidation of
Triton Cayman, after payment to holders
of Class A Shares of amounts equal to
certain payments made with respect to the
Triton Delaware Preferred Stock, holders
of Class B Shares are entitled to
participate in the assets of Triton
Cayman pari passu with the holders of any
other class of Ordinary Shares
outstanding.
<S> <C> <C>
VOTING RIGHTS One vote per Class A Share with respect One vote per Class B Share with respect
to matters submitted to the shareholders to matters submitted to the shareholders
of Triton Cayman. of Triton Cayman, subject to certain
special voting rights under certain
circumstances. In addition, each share of
Triton Delaware Preferred Stock will be
entitled to two votes per share (and each
holder of an Equity Unit will therefore
be entitled to 1/5 of one vote per share)
and certain other voting rights with
respect to matters submitted to the
stockholders of Triton Delaware.
STOCK EXCHANGE LISTING; NYSE The Equity Units will be listed on the
LIQUIDITY NYSE. Triton Delaware expects that
because the number of Equity Units will
be, at most, one-third the number of
Class A Shares issued upon consummation
of the Merger, the trading market for the
Equity Units will be less liquid.
</TABLE>
8
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS, INCLUDING
THE ANNEX, AND IN THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE. CERTAIN
CAPITALIZED TERMS USED IN THIS SUMMARY ARE DEFINED ELSEWHERE IN THIS PROXY
STATEMENT/PROSPECTUS. SEE "GLOSSARY OF DEFINED TERMS."
<TABLE>
<S> <C>
SPECIAL MEETING
TIME, DATE, PLACE A Special Meeting of the Triton Delaware stockholders
AND PURPOSE........ will be held at a.m., Dallas time, on ,
1996, at Triton Energy Corporation, 6688 North Central
Expressway, 12th Floor, Dallas, Texas 75206 (or any
adjournments or postponements thereof) to consider and
vote on the proposal to approve the Merger Agreement and
any other matters that may properly come before such
meeting. The presence, in person or by proxy, of the
stockholders holding a majority of the outstanding
shares of Triton Delaware Common Stock entitled to vote
at the Special Meeting will constitute a quorum. See
"The Special Meeting."
RECORD DATE......... Only Triton Delaware stockholders of record at the close
of business on , 1996, as shown on Triton
Delaware's records, will be entitled to vote, or to
grant proxies to vote, at the Special Meeting. See "The
Special Meeting -- Record Date."
TRITON DELAWARE....... Triton Delaware is an international oil and gas
exploration company primarily engaged in exploration and
production through subsidiaries and affiliates. Triton
Delaware's principal properties and operations are
located in Colombia and Malaysia-Thailand. Triton
Delaware also has oil and gas interests in other Latin
American and Asian countries, Europe, Australia and
North America. Triton Delaware's principal offices are
located at 6688 North Central Expressway, Suite 1400,
Dallas, Texas 75206-9926. Triton Delaware's telephone
number is (214) 691-5200. See "Triton Delaware and
Triton Cayman."
TRITON CAYMAN......... Triton Cayman is a newly formed Cayman Islands company
and a wholly-owned subsidiary of Triton Delaware. Triton
Cayman was formed to become the parent holding company
of Triton Delaware. All of the capital stock of Triton
Cayman is currently held by Triton Delaware. After the
consummation of the Reorganization, Triton Delaware will
become a subsidiary of Triton Cayman, and Triton Cayman
will continue to conduct the businesses (through
subsidiaries and affiliates) in which Triton Delaware is
now engaged. Triton Cayman's principal offices are
located at Caledonian House, Mary Street, P.O. Box 1043,
George Town, Grand Cayman, Cayman Islands. Triton
Cayman's telephone number is (809) 949-0050. Triton
Cayman has a newly formed, wholly-owned subsidiary, Sub,
specifically to effect the Reorganization. See "Triton
Delaware and Triton Cayman."
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
THE REORGANIZATION
GENERAL............. The Board of Directors of Triton Delaware has
unanimously approved, and recommends that the
stockholders of Triton Delaware adopt, a proposed
corporate reorganization pursuant to which Triton
Cayman, a Cayman Islands company, will become the parent
holding company of Triton Delaware. It is proposed that
the Reorganization be effected pursuant to the Merger
Agreement, a copy of which is attached hereto as Annex I
and the terms of which are incorporated herein by
reference. After the consummation of the Reorganization,
Triton Cayman will continue to conduct the businesses
(through subsidiaries and affiliates) in which Triton
Delaware is now engaged and substantially all of the
businesses or subsidiaries of Triton Delaware located
outside of the United States, other than Triton
Delaware's interests in the Cusiana and Cupiagua fields
in Colombia, will be transferred to Triton Cayman. The
relative voting rights of Triton Delaware stockholders
as shareholders of Triton Cayman will not change as a
result of the Reorganization. See "Pro Forma Financial
Information," "The Reorganization," "Description of
Authorized Shares of Triton Cayman -- Voting Rights,"
"-- Special Rights Upon the Occurrence of Certain
Events" and "Comparison of Rights of Stockholders."
REASONS FOR THE
REORGANIZATION..... The Board of Directors of Triton Delaware believes that
the establishment of a Cayman Islands holding company
for Triton Delaware and its subsidiaries will allow
Triton Delaware to organize its international and United
States business activities to take maximum advantage of
business, tax and financing environments which are more
favorable than those available domestically. In
particular, the Board of Directors of Triton Delaware is
recommending the Reorganization for the following
reasons: (a) the creation of a Cayman Islands parent
corporation will reduce corporate income taxes because,
unlike the U.S. tax system which imposes corporate
income tax on the worldwide income of United States
corporations, the Cayman Islands generally imposes no
corporate income taxes on foreign income. Income taxes
will therefore be reduced to the extent operations, for
example, in the Malaysia-Thailand Joint Development
Area, are conducted after the Reorganization by Triton
Cayman or its foreign subsidiaries; (b) the
Reorganization may, in certain circumstances, have a
favorable effect on Triton Cayman's ability to sell
assets or raise additional capital in the future; and
(c) a holding company structure in the form proposed by
the Reorganization will provide greater management
flexibility and control, as well as a more suitable
corporate structure for expansion of its current
business and future acquisitions and diversification op-
portunities.
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
In determining to recommend the Reorganization, the
Board consulted with Triton Delaware's management, its
financial advisors, Lehman Brothers Inc. ("Lehman") and
J.P. Morgan ("J.P. Morgan") and its legal advisors and
considered a number of factors, including the Board's
belief, based on consultation with its financial
advisors, that the fair market values of a Class A Share
and an Equity Unit will be substantially equivalent on
the date of the Reorganization, as well as the Board's
desire to afford stockholders electing to receive Equi-
ty Units the opportunity to defer a substantial portion
of their taxable gain. As described in "Certain Tax
Considerations," in the opinion of special tax counsel,
while no assurance can be given, it is more likely than
not that the receipt of the shares of Triton Delaware
Preferred Stock by stockholders who elect to receive
Equity Units will not be a taxable transaction. See "The
Reorganization -- Background and Reasons for the
Reorganization" and "Certain Tax Considerations."
THE MERGER.......... The Reorganization will be accomplished through the
merger of Sub with and into Triton Delaware, which will
be the surviving corporation in the Merger, at which
time each outstanding share of Triton Delaware Common
Stock (other than shares of Triton Delaware Common Stock
held by Triton Delaware in its treasury and other than
Electing Shares (as hereinafter defined), subject to the
Equity Unit Limitation) will be automatically converted
into one Class A Share. As is further described in
"Equity Unit Election" below, each share of Triton
Delaware Common Stock (an "Electing Share") with respect
to which an election to receive one Equity Unit has been
properly made by the holder thereof and not withdrawn
will be exchanged for one Equity Unit; provided that the
maximum number (the "Maximum Election Number") of shares
of Triton Delaware Common Stock with respect to which
Equity Unit Elections can be made shall be 25% of the
number of shares of Triton Delaware Common Stock
outstanding immediately prior to the Effective Time;
provided further that the minimum number (the "Minimum
Election Number") of shares of Triton Delaware Common
Stock with respect to which Equity Unit Elections can be
made shall be 15% of the number of shares of Triton
Delaware Common Stock outstanding immediately prior to
the Effective Time (such limitations, the "Equity Unit
Limitation"). In connection with the Merger, each
outstanding share of 5% convertible preferred stock of
Triton Delaware (the "Convertible Preferred Stock") will
be automatically converted into one 5% convertible
preference share of Triton Cayman (the "Convertible
Preference Shares"), subject to dissenters' appraisal
rights. See "The Reorganization -- The Merger
Agreement," "The Reorganization -- Equity Unit Election"
and "Description of Authorized Shares of Triton Cayman."
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
EFFECTIVE TIME...... If the Merger Agreement is adopted by the stockholders
of Triton Delaware and not terminated by the Board of
Directors of Triton Cayman, the Reorganization will
become effective (the "Effective Time") at the close of
business on the date that an appropriate certificate of
merger is filed with the Delaware Secretary of State as
required by Delaware law or at such later time as is
specified in such certificate of merger. Triton Delaware
anticipates that the Reorganization will become
effective promptly following the Special Meeting. See
"The Reorganization -- Effective Time."
EQUITY UNIT Subject to the Equity Unit Limitation, record holders of
ELECTION........... Triton Delaware Common Stock will be entitled to make an
unconditional election (an "Equity Unit Election") on or
prior to the Election Date (as defined below) to receive
Equity Units in exchange for any or all shares of Triton
Delaware Common Stock owned of record by such holders in
lieu of such shares being automatically converted into
Class A Shares upon consummation of the Reorganization.
If the number of Electing Shares exceeds the Maximum
Election Number, then the aggregate number of Electing
Shares to be exchanged for Equity Units in the Merger in
connection with any Equity Unit Election will be reduced
by multiplying the number of Electing Shares covered by
such Equity Unit Election by a proration factor (the
"Proration Factor") determined by dividing the Maximum
Election Number by the total number of Electing Shares.
The number of Electing Shares covered by each Equity
Unit Election which will be exchanged for Equity Units
will be that number which results from multiplying the
number of such Electing Shares by the Proration Factor.
Electing Shares not exchanged for Equity Units as a
result of proration will instead be automatically
converted into Class A Shares on the basis described
above under "The Merger." In the event that the number
of Electing Shares is less than the Minimum Election
Number, no Equity Units will be issued and Electing
Shares will be automatically converted into Class A
Shares on the basis described above under "The Merger."
Holders of Triton Delaware Common Stock electing to
receive Equity Units in exchange for all or a portion of
their Triton Delaware Common Stock must properly
complete and sign the Form of Election ("Form of
Election") accompanying this Proxy Statement/Prospectus,
and such form, together with certificates for the shares
of Triton Delaware Common Stock to which such form
relates, duly endorsed in blank or otherwise in form
acceptable for transfer on the books of Triton Delaware
(or by appropriate guarantee of delivery, as set forth
in such form), must be received by the Exchange Agent,
by 5:00 p.m., New York City time, on the third business
day next preceding the date of the Special Meeting (the
"Election Date"). See "The Reorganization -- Equity Unit
Election."
</TABLE>
12
<PAGE>
DIVIDENDS........... Aggregate dividends declared and paid on one Class A
Share are expected to be equivalent to the aggregate
dividends declared and paid on the securities included
in one Equity Unit. Holders of Equity Units will be
entitled to receive, if declared by the Board of
Directors of Triton Delaware or Triton Cayman, as the
case may be, (a) dividends on the shares of Triton
Delaware Preferred Stock pari passu with the holders of
the common stock of Triton Delaware outstanding after
the Merger, in such amounts as the Board of Directors of
Triton Delaware, in its discretion, may determine, in an
amount equal to the product of the aggregate amount of
such dividends paid and the percentage of shares of
Triton Delaware Common Stock that receive Equity Units
in the Merger, subject to certain adjustments and (b)
dividends on the Class B Ordinary Shares in such amounts
as the Board of Directors of Triton Cayman may
determine, subject to certain preferences of the holders
of the Class A Shares contained in the Articles of
Association. Holders of Class A Shares will be entitled
to receive, at any time, such dividends as are declared
by the Board of Directors of Triton Cayman. At the time
of the Reorganization, Triton Cayman and Triton Delaware
will be parties to certain indentures which contain
covenants that will restrict the ability of Triton
Cayman and Triton Delaware to pay dividends. Triton
Cayman and Triton Delaware currently intend to retain
earnings for use in their respective businesses and the
financing of their respective capital requirements. The
payment of any future cash dividends on the Triton
Delaware Preferred Stock and the Class A Shares and
Class B Shares (collectively, the "Ordinary Shares") is
necessarily dependent upon the earnings and financial
needs of Triton Delaware and Triton Cayman,
respectively, along with applicable legal and
contractual restrictions. See "Description of Authorized
Shares of Triton Cayman -- Dividend Rights" and
"Description of Triton Delaware Preferred Stock --
Dividends."
13
<PAGE>
<TABLE>
<S> <C>
PURCHASE RIGHT...... The Equity Units are subject to purchase by Triton
Cayman or Triton Delaware, in whole or in part, at any
time on or after , 1999 or by Triton Cayman
immediately prior to the date on which a sale or other
disposition of the stock of Triton Delaware is
consummated. The purchase price for the Equity Units
will generally be equal to the greater of .95 of a Class
A Share and the fair market value of an Equity Unit,
payable in cash or, in the case of Triton Cayman, Ordi-
nary Shares. Neither Triton Cayman nor Triton Delaware
can exercise its option to purchase the Equity Units in
certain circumstances, including in the event of the
bankruptcy or insolvency of Triton Delaware. See
"Description of Triton Delaware Preferred Stock --
Purchase of Equity Units." For a discussion of the
consequences to the holders of Ordinary Shares of the
purchase of the Equity Units, see "Description of
Authorized Shares of Triton Cayman -- Purchase of Equi-
ty Units."
LIQUIDATION......... Upon the liquidation of Triton Cayman, holders of Class
A Shares are entitled to receive an amount per share
equal to certain payments made with respect to one-tenth
of one share of Triton Delaware Preferred Stock and
thereafter the holders of Class A Shares and Class B
Shares will participate in the assets of Triton Cayman
pari passu with the holders of any other class of
ordinary shares outstanding. Upon the liquidation of
Triton Delaware, holders of shares of Triton Delaware
Preferred Stock are entitled to receive a liquidation
preference equal to the fair market value of one-tenth
of one share of Triton Delaware Preferred Stock at the
Effective Time, as determined by Triton Delaware upon
the advice of its financial advisors and will share
thereafter in any other distribution of assets by Triton
Delaware with the holders of the common stock of Triton
Delaware.
VOTING RIGHTS....... Each Ordinary Share will be entitled to one vote in the
affairs of Triton Cayman, subject to certain special
voting rights of the Class B Shares under certain
circumstances. In addition, each share of Triton
Delaware Preferred Stock will be entitled to two votes
per share in all matters submitted to a vote of
stockholders of Triton Delaware and certain other voting
rights. See "Description of Authorized Shares of Triton
Cayman -- Voting and Other Rights" and "-- Special
Rights Upon the Occurrence of Certain Events" and
"Description of Triton Delaware Preferred Stock --
Voting Rights."
RECOMMENDATION OF THE
BOARD OF
DIRECTORS............ THE BOARD OF DIRECTORS OF TRITON DELAWARE HAS
UNANIMOUSLY APPROVED THE PROPOSED REORGANIZATION AND THE
MERGER AGREEMENT AND RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE PROPOSAL TO ADOPT THE MERGER AGREEMENT.
</TABLE>
14
<PAGE>
<TABLE>
<S> <C>
VOTE REQUIRED FOR Adoption of the Merger Agreement requires the
ADOPTION............. affirmative vote of the stockholders of Triton Delaware
who hold a majority of the outstanding shares of Triton
Delaware Common Stock. Abstentions and broker
"non-votes" will be treated as votes against the
proposal to adopt the Merger Agreement. As of the record
date described above, there were shares of Triton
Delaware Common Stock outstanding and entitled to vote.
In addition, as of the record date, the directors and
executive officers of Triton Delaware and affiliates of
such persons directly owned, in the aggregate,
shares (approximately %) of the total number of
shares of Triton Delaware Common Stock outstanding and
have indicated their intention to vote such shares in
favor of the proposal to adopt the Merger Agreement. See
"The Special Meeting -- Vote Required for Adoption."
PROXIES............. Each Triton Delaware stockholder as of the record date
will receive a Proxy Card (the "Proxy Card"). A
stockholder of Triton Delaware may grant a proxy to vote
for or against, or to abstain from voting on, the
proposal to adopt the Merger Agreement by marking the
Proxy Card appropriately, executing it in the space
provided, and, in the case of holders of Triton Delaware
Common Stock appearing on the stock records of Triton
Delaware, returning it to Triton Delaware. Triton
Delaware stockholders who hold their Triton Delaware
Common Stock in the name of a bank, broker or other
nominee should follow the instructions provided by their
bank, broker or nominee on voting their shares.
To be effective, a Proxy Card must be received at or
prior to the Special Meeting. Any properly executed
proxy will be voted in accordance with the specification
indicated on such Proxy Card. A properly executed and
returned Proxy Card in which no specification is made
will be voted FOR the proposal to adopt the Merger
Agreement.
If any other matters are properly presented at the
Special Meeting for consideration, including
consideration of a motion to adjourn the Special Meeting
to another time and/or place (including adjournments for
the purpose of soliciting additional proxies), the
persons named in the Proxy Card and acting thereunder
will have the discretion to vote on such matters in
accordance with their best judgment. See "The Special
Meeting -- Proxies."
</TABLE>
15
<PAGE>
<TABLE>
<S> <C>
REVOCATION.......... In the case of holders of Triton Delaware Common Stock
appearing on the stock records of Triton Delaware, a
Proxy Card may be revoked at any time prior to its
exercise by (a) giving written notice of such revocation
to Triton Delaware, (b) appearing and voting in person
at the Special Meeting, or (c) properly completing and
executing a later-dated proxy and delivering it to
Triton Delaware at or before the Special Meeting.
Presence without voting at the Special Meeting will not
automatically revoke a proxy, and any revocation during
the meeting will not affect votes previously taken.
Triton Delaware stockholders who hold their Triton Dela-
ware Common Stock in the name of a bank, broker or other
nominee should follow the instructions provided by their
bank, broker or nominee in revoking their previously
voted shares. See "The Special Meeting -- Proxies --
Revocation."
COMPARISON OF RIGHTS
OF
STOCKHOLDERS......... The principal attributes of the Triton Delaware Common
Stock and the Ordinary Shares will be similar. However,
there are certain differences between the rights of
stockholders under Delaware law and Cayman Islands law.
In addition, there are differences between Triton
Delaware's Certificate of Incorporation and Bylaws and
Triton Cayman's Articles of Association and Memorandum
of Association. See "Comparison of Rights of
Stockholders."
ODD LOT SHARES........ Each holder of Triton Delaware Common Stock who holds
fewer than 100 shares thereof prior to the Merger may
elect to participate in the Odd-Lot Program pursuant to
which such holder may have Chemical Mellon Shareholder
Services, L.L.C. (the "Exchange Agent") sell all, but
not less than all, of such holder's shares of Triton
Delaware Common Stock. See "The Reorganization --
Odd-Lot Program." Triton Delaware expects that the
proceeds of such sales will be distributed shortly after
such sales. The Odd Lot Program is not contingent on
adoption of the Merger Agreement or consummation of the
Merger.
TAX CONSIDERATIONS.... The following is a brief summary of the United States
federal income tax consequences of the Reorganization
and is not intended to be, nor should it be construed to
be, advice to any particular stockholder of Triton
Delaware. Stockholders of Triton Delaware should consult
their own tax advisors with respect to their particular
circumstances. A more detailed summary of certain tax
consequences of the Reorganization is set out under
"Certain Tax Considerations."
The discussion contained in this Proxy
Statement/Prospectus is based on the law in effect as of
the date of this Proxy Statement/Prospectus. Triton
Delaware and Triton Cayman will receive opinions at the
Effective Time from Special Tax Counsel reaffirming as
of such date certain conclusions reached in this Proxy
Statement/Prospectus.
</TABLE>
16
<PAGE>
<TABLE>
<S> <C>
There are no regulations, published rulings or judicial
decisions directly on point with respect to certain
aspects of the Reorganization and the securities to be
issued pursuant thereto. Accordingly, Special Tax
Counsel are unable to reach an unqualified conclusion on
certain matters as indicated below. Opinions of counsel
are not binding upon either the IRS or the courts.
Triton Delaware does not intend to request a ruling from
the IRS with respect to the Reorganization. Stockholders
are urged to consult their own tax advisors as to the
particular tax consequences to them of the Reorganiza-
tion.
The receipt of Class A Shares by U.S. stockholders in
exchange for Triton Delaware Common Stock will be a
taxable transaction. Stockholders will recognize gain,
if any (but not loss), in an amount equal to the excess
of the fair market value of the Class A Shares received
in the Reorganization over their tax basis in the Triton
Delaware Common Stock exchanged therefor.
Special Tax Counsel are of the opinion that it is more
likely than not that the shares of Triton Delaware
Preferred Stock will be treated as stock of Triton
Delaware and that the receipt of such shares of Triton
Delaware Preferred Stock in exchange for Triton Delaware
Common Stock will not be a taxable transaction. In such
case, the basis of the shares of Triton Delaware
Preferred Stock will be the same as the Triton Delaware
Common Stock treated as exchanged therefor. However, in
view of the absence of any authority dealing with
transactions similar to the Reorganization or securities
of a type similar to the Equity Units, there is
significant uncertainty with respect to such conclusion
and no assurance can be given that the IRS or the courts
will agree. In any event, the receipt of Class B Shares
by U.S. stockholders in exchange for Triton Delaware
Common Stock will be a taxable transaction. Stockholders
will recognize gain, if any (but not loss), in an amount
equal to the excess of the fair market value of the
Class B Shares received in the Reorganization over their
tax basis in the Triton Delaware Common Stock treated as
exchanged therefor. Triton Delaware believes, based upon
the advice of Lehman and J.P. Morgan, that, on the date
of this Proxy Statement/Prospectus, the fair market
value of a Class B Share would be approximately
$ and the fair market value of one-tenth of a
share of Triton Delaware Preferred Stock would be
approximately $ based upon the closing price of
the Triton Delaware Common Stock on the NYSE Composite
Transactions Tape on , 1996 of $ .
Triton Delaware will provide stockholders making an
Equity Unit Election with confirmation of Lehman's and
J.P. Morgan's estimate of the fair market value of
one-tenth of one share of Triton Delaware Preferred
Stock and the Class B Share as of the date of the
Reorganization. However, the IRS is not bound by such
valuations and no assurance can be given that the IRS
will agree with such valuations.
</TABLE>
17
<PAGE>
<TABLE>
<S> <C>
The Merger Agreement provides (and by making an Equity
Unit Election stockholders will agree with Triton
Delaware and Triton Cayman) that, with respect to
stockholders exchanging Triton Delaware Common Stock for
Equity Units, a portion of each such stockholder's
Triton Delaware Common Stock so exchanged in the
Reorganization will be transferred to Triton Delaware as
consideration for the issuance of the Triton Delaware
Preferred Stock and the remaining portion of the Triton
Delaware Common Stock so exchanged by each such
stockholder in the Reorganization will be transferred to
Triton Cayman as consideration for the issuance by
Triton Cayman of the Class B Shares. Such allocation
shall be determined based on the respective fair market
values of the Triton Delaware Preferred Stock and the
Class B Shares as estimated by Triton Delaware on the
date of the Reorganization. No assurance can be given
that such allocation will be respected by the IRS.
The IRS may assert that the shares of Triton Delaware
Preferred Stock were received as taxable consideration
in the Reorganization, in which case the entire fair
market value of each Equity Unit received (rather than
the portion of such fair market value attributable to
the Class B Share) would have to be taken into account
in determining the amount of gain, if any, required to
be recognized on the Reorganization by stockholders who
make the Equity Unit Election. Consequently, each Triton
Delaware stockholder making an Equity Unit Election
would recognize gain to the extent the fair market value
of the Equity Units received in exchange for Triton
Delaware Common Stock exceeds such stockholder's basis
in its Triton Delaware Common Stock. No loss would be
recognized as a result of the Reorganization.
The receipt of cash by stockholders of Triton Delaware
exercising dissenters rights or selling their shares
pursuant to the odd-lot program will be taxable
transactions in which gain or loss will be recognized in
an amount equal to the difference between the cash
received and the tax basis in the shares of Triton
Delaware Common Stock exchanged therefor.
The receipt of Convertible Preference Shares in exchange
for Convertible Preferred Stock in the Reorganization by
U.S. holders will be a taxable transaction. U.S. holders
of Convertible Preferred Stock will recognize gain, if
any (but not loss), in an amount equal to the excess of
the fair market value of the Convertible Preference
Shares received in the Merger over their tax basis in
the Convertible Preferred Stock exchanged therefor.
For United States federal income tax purposes, exercise
of Triton Delaware's or Triton Cayman's right to
purchase the Equity Units for cash will be a taxable
transaction. Exercise of Triton Cayman's right to
exchange Ordinary Shares for Equity Units will be a
partially taxable transaction except possibly as
described further herein.
</TABLE>
18
<PAGE>
<TABLE>
<S> <C>
STOCKHOLDERS ARE ADVISED TO READ THE MORE DETAILED
SUMMARY OF THE TAX CONSEQUENCES OF THE REORGANIZATION,
AS SET FORTH UNDER "CERTAIN TAX CONSIDERATIONS."
RIGHTS OF DISSENTING
STOCKHOLDERS......... Under applicable Delaware law, the holders of Triton
Delaware Common Stock will not have dissenters'
appraisal rights in connection with the Reorganization.
Holders of Convertible Preferred Stock are entitled to
dissenters' appraisal rights, subject to compliance with
the procedures set forth in Section 262 of the Delaware
General Corporation Law (the "DGCL"), in connection with
the Merger. See "Rights of Dissenting Stockholders."
ACCOUNTING TREATMENT
OF THE
REORGANIZATION....... The acquisition by Triton Cayman of Triton Delaware in
connection with the Reorganization will be accounted for
as a combination of entities under common control (as if
it were a pooling of interests). See "The Reorganization
-- Accounting Treatment of the Reorganization."
RISK FACTORS.......... See "Risk Factors" for a discussion of certain risk
factors to be considered in connection with the
Reorganization, including with respect to stockholders
who receive Unit Depositary Shares, the absence of any
prior market for the Unit Depositary Shares and Triton
Delaware's expectation that the trading market for the
Unit Depositary Shares will be less liquid.
STOCK EXCHANGE There is currently no established public trading market
LISTING.............. for the Class A Shares or the Unit Depositary Shares.
Immediately following the Reorganization, the Class A
Shares will be listed on the NYSE under the symbol
"OIL," the same symbol under which the Triton Delaware
Common Stock is currently listed. Application has been
made to list the Unit Depositary Shares on the NYSE. See
"The Reorganization -- Stock Exchange Listing."
DEPOSITARY AND
EXCHANGE AGENT....... Chemical Mellon Shareholder Services, L.L.C. will act as
Depositary for the Unit Depositary Shares and as
Exchange Agent in connection with the Merger.
</TABLE>
19
<PAGE>
SELECTED HISTORICAL FINANCIAL AND OIL AND GAS DATA
The selected historical financial data presented below for the nine month
periods ended September 30, 1995 and 1994, the seven month transition period
ended December 31, 1994 and each of the years in the five-year period ended May
31, 1994, are derived from the Consolidated Financial Statements of Triton
Delaware and its subsidiaries (see note 1 in the table below). The Consolidated
Financial Statements as of and for the seven month transition period ended
December 31, 1994 and years ended May 31, 1994 and 1993 and the adjustments that
were applied to restate the 1992 consolidated financial statements for
discontinued aviation sales and services operations and wholesale fuel products
operations were audited by Price Waterhouse LLP, independent accountants. The
Consolidated Financial Statements as of and for the three years ended May 31,
1992 (before restatements for discontinued aviation sales and services
operations and wholesale fuel products operations) were audited by KPMG Peat
Marwick LLP, independent accountants. The Consolidated Financial Statements as
of December 31, 1994, May 31, 1994 and 1993, and for the seven month transition
period ended December 31, 1994 and each of the years in the three year period
ended May 31, 1994, and the reports of such accountants thereon, are included in
Triton Delaware's Current Report on Form 8-K dated August 24, 1995 incorporated
by reference herein.
The selected unaudited financial data presented below under the captions
"Operating Data" and "Balance Sheet Data" for the nine month periods ended
September 30, 1995 and 1994, and as of September 30, 1995, are derived from the
unaudited consolidated condensed financial statements of Triton Delaware and its
subsidiaries. With respect to such unaudited consolidated financial information
for the nine month periods ended September 30, 1995 and 1994, Price Waterhouse
LLP reported that they have applied limited procedures in accordance with
professional standards for a review of such information. The unaudited
consolidated condensed financial statements as of September 30, 1995, and for
the nine month periods ended September 30, 1995 and 1994, and the review report
on the nine month periods ended September 30, 1995 and 1994, are included in
Triton Delaware's Quarterly Report on Form 10-Q incorporated by reference
herein. The information as of September 30, 1995 and 1994, and for the nine
month periods then ended is unaudited, but includes all adjustments of a normal
recurring nature which Triton Delaware considers necessary for a fair
presentation of the financial position and results of operations at those dates
and for those periods. The results of operations for the nine months ended
September 30, 1995, are not necessarily indicative of the results to be expected
for the full year.
The selected financial data reflect revenues and earnings (loss) since the
date of acquisition of various companies or assets, or to the date of
disposition in the case of divestitures, which materially affect comparability
with prior years. The information below should be read in conjunction with the
"Pro Forma Financial Information" and the Consolidated Financial Statements of
Triton Delaware and related notes included in the Form 8-K dated August 24, 1995
incorporated herein by reference and "Management's Discussion and Analysis of
Financial Condition and Results of Operations"
20
<PAGE>
included in Triton Delaware's Transition Report on Form 10-K and Triton
Delaware's Quarterly Report on Form 10-Q for the nine month period ended
September 30, 1995 incorporated herein by reference.
<TABLE>
<CAPTION>
AS OF OR FOR AS OF OR FOR AS OF OR FOR
NINE MONTHS NINE MONTHS SEVEN MONTHS
ENDED ENDED ENDED AS OF OR FOR YEAR ENDED MAY 31,
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, ------------------------------------------------
1995 1994 1994 1994 1993 1992 1991 1990
------------- ------------- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA (in thousands,
except per share data):
Sales and other operating
revenues(1)...................... $ 80,841 $ 24,510 $20,736 $ 43,208 $ 84,414 $ 90,724 $118,667 $117,793
Total revenues(1)................. 98,096 33,584 25,321 107,394 90,362 97,203 150,849 127,354
Earnings (loss) from continuing
operations(1)(2)................. 5,933 (33,421) (26,630) (4,597) (76,509) (81,333) (7,390) (50,162)
Earnings (loss) before
extraordinary items and
cumulative effect of accounting
change........................... 2,112 (35,754) (27,708) (9,341) (93,552) (94,037) 4,745 (54,769)
Net earnings (loss)(2)............ 2,112 (35,754) (27,708) (9,341) (89,535) (94,037) 6,185 (54,176)
Weighted average number of common
shares outstanding............... 35,088 34,901 34,944 34,775 34,241 29,898 20,368 20,346
EARNINGS (LOSS) PER COMMON SHARE:
Continuing operations(1)(2)..... $ 0.15 $ (0.97) $ (0.78) $ (0.13) $ (2.23) $ (2.77) $ (0.64) $ (2.73)
Before extraordinary item and
cumulative effect of accounting
change......................... $ 0.04 $ (1.04) $ (0.81) $ (0.27) $ (2.73) $ (3.19) $ (0.04) $ (2.96)
Net earnings (loss)............. $ 0.04 $ (1.04) $ (0.81) $ (0.27) $ (2.61) $ (3.19) $ 0.03 $ (2.93)
Cash dividends per common share... -- -- -- -- -- -- -- 0.10
Ratio of earnings to combined
fixed charges and preferred
dividends(3)..................... 1.1x (3) (3) (3) (3) (3) 1.1x (3)
BALANCE SHEET DATA (in thousands):
Net property and equipment........ $465,816 $365,320 $399,658 $308,498 $330,151 $385,979 $391,862 $424,850
Total assets...................... 827,155 611,826 619,201 616,101 561,931 571,169 553,809 646,128
Long-term debt.................... 404,944 305,218 315,258 294,441 159,147 27,587 160,667 233,134
Redeemable preferred stock of
subsidiaries..................... -- -- -- -- 11,399 12,972 13,608 22,615
Stockholders' equity.............. 243,212 253,408 237,195 263,422 255,432 336,013 186,503 173,796
CERTAIN OIL AND GAS DATA(4)
Sales price realized per BOE...... $ 15.79 $ 13.51 $ 14.26 $ 12.91 $ 13.18 $ 13.05 $ 15.52 $ 12.87
BOE produced (in thousands)....... 5,741 2,597 2,059 4,399 7,351 7,838 8,302 8,821
</TABLE>
- ------------------------------
(1) Operating data for the nine months ended September 30, 1994, the seven
months ended December 31, 1994 and the years ended May 31, 1994, 1993,
1992, 1991, and 1990 are restated to reflect the aviation sales and
services segment and the wholesale fuel product segment as discontinued
operations in 1995 and 1993, respectively.
(2) Gives effect to the writedown of assets and loss provisions of $14.7
million, $1.0 million, $45.8 million, $99.9 million, $48.8 million, $2.7
million, and $29.2 million for the nine months ended September 30, 1994,
the seven months ended December 31, 1994 and the years ended May 31, 1994,
1993, 1992, 1991 and 1990, respectively.
(3) For purposes of computing the ratio of earnings to combined fixed charges
and preferred dividends, earnings consist of earnings (loss) from
continuing operations before income taxes, minority interest and
extraordinary items and cumulative effect of accounting changes, plus fixed
charges (interest charges and preferred stock dividend requirements of
subsidiaries, adjusted to a pretax basis), less interest capitalized, less
preferred stock dividend requirements of subsidiaries adjusted to a pretax
basis and less undistributed earnings of affiliates whose debt is not
guaranteed by Triton Delaware. Earnings were inadequate to cover fixed
charges and preferred dividends for the nine months ended September 30,
1994 by $54,078,000, for the seven months ended December 31, 1994 by
$31,014,000 and for the years ended May 31, 1994, 1993, 1992 and 1990 by
$40,976,000, $152,391,000, $94,261,000 and $59,603,000, respectively.
Without nonrecurring items, earnings would have been inadequate to cover
fixed charges and preferred dividends for the nine months ended September
30, 1995 and 1994 by $7,062,000 and $40,212,000, respectively, for the
seven months ended December 31, 1994 by $30,030,000, and for the years
ended May 31, 1994, 1993, 1992, 1991 and 1990 by $51,415,000, $45,183,000,
$33,687,000, $17,452,000 and $28,864,000, respectively.
(4) Includes Triton Delaware's interest in the net production attributable to
minority interests in consolidated subsidiaries, but includes only Triton
Delaware's proportionate interest in a non-consolidated affiliate. Includes
production only since or up to the effective dates of their respective
acquisitions or sales, as the case may be.
21
<PAGE>
SUMMARY PRO FORMA FINANCIAL INFORMATION
The following summary pro forma combined financial information of Triton
Cayman and Triton Delaware gives effect to (i) the acquisition of Triton
Delaware in connection with the proposed Reorganization, whereby Triton Cayman
will become the parent holding company of Triton Delaware and (ii) subsequent to
the Reorganization, the transfer to Triton Cayman of substantially all of the
businesses or subsidiaries of Triton Delaware located outside of the United
States, other than Triton Delaware's interests in the Cusiana and Cupiagua
fields in Colombia. The following summary pro forma combined financial
information of Triton Cayman and Triton Delaware should be read in conjunction
with the Pro Forma Combined Condensed Financial Information included elsewhere
herein and the separate historical financial statements of Triton Delaware and
notes thereto incorporated by reference in this Proxy Statement/Prospectus. The
pro forma combined financial data of Triton Delaware are not necessarily
indicative of the operating results that would have been achieved had the
transfers described in note (1) below been effected during the periods presented
or the results that may be obtained in the future.
SUMMARY PRO FORMA COMBINED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
--------------------------------------------
SEVEN MONTHS
NINE MONTHS ENDED
ENDED DEC. 31, YEAR ENDED
TRITON DELAWARE SEPT. 30, 1995 1994 MAY 31, 1994
- ----------------------------------- -------------- ------------ ------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA (1):
Total revenue...................... $102,682 $ 29,147 $ 112,192
Earnings (loss) from continuing
operations before income taxes and
minority interest................. 23,154 (12,791) 46,649
Earnings (loss) from continuing
operations........................ 15,697 (14,987) 41,667
Earnings (loss) from continuing
operations per common share....... $ 0.42 $ (0.44) $ 1.20
Weighted average number of shares
outstanding....................... 35,088 34,944 34,775
<CAPTION>
SEPTEMBER 30, 1995
--------------------------------------------
PRO FORMA
TRITON DELAWARE HISTORICAL ADJUSTMENTS PRO FORMA
- ----------------------------------- -------------- ------------ ------------
<S> <C> <C> <C>
BALANCE SHEET DATA (1):
Working capital.................... $135,790 $ 6,986 $ 142,776
Total assets....................... 827,155 102,856 930,011
Long-term debt, less current
portion........................... 404,944 -- 404,944
Total stockholders' equity......... 243,212 121,541 364,753
<CAPTION>
SEPTEMBER 30, 1995
--------------------------------------------
PRO FORMA
TRITON CAYMAN HISTORICAL ADJUSTMENTS PRO FORMA
- ----------------------------------- -------------- ------------ ------------
<S> <C> <C> <C>
BALANCE SHEET DATA (2):
Working capital.................... -- $ 135,790 $ 135,790
Total assets....................... -- 827,155 827,155
Long-term debt, less current
portion........................... -- 404,944 404,944
Preferred stock of a subsidiary
(3)............................... -- 439,086 439,086
Total stockholders' equity......... -- (195,874) (195,874)
</TABLE>
- ------------------------------
(1) Following the Reorganization, Triton Cayman intends to acquire
substantially all of the businesses or subsidiaries of Triton Delaware
located outside of the United States, other than Triton Delaware's
interests in the Cusiana and Cupiagua fields in Colombia, for an aggregate
purchase price estimated to be approximately $ million. Triton Delaware
will retain preferred stock, with an estimated stated value of $ million,
of Triton Oil Company of Thailand JDA Ltd. through which Triton Cayman will
hold its interest in Block A-18 of the Malaysia-Thailand Joint Development
Area and preferred stock, with an estimated stated value of $ million, of
Triton International Petroleum, Inc. through which Triton Cayman will hold
its interests in various other oil and gas exploration ventures worldwide.
The excess of the consideration over the net book value of the assets to be
sold estimated to be approximately $ million to be recognized by Triton
Delaware, has been reported as an increase to stockholders' equity in the
unaudited Pro Forma Consolidated Condensed Balance Sheet of Triton
Delaware. The consideration for the contemplated transfers, as well as the
stated value of the preferred stock to be retained by Triton Delaware, will
be determined at the time of such transfers and the issuance of such
shares, respectively, and will be based on independent third party
appraisals.
(2) Pro forma consolidated condensed statements of operations for Triton Cayman
are not presented herewith because the pro forma consolidated condensed
statements of operations of Triton Cayman for the nine months ended
September 30, 1995, the seven month transition period ended December 31,
1994 and the year ended May 31, 1994 would be identical to the historical
results of operations included within the pro forma consolidated condensed
statements of operations of Triton Delaware reflecting the sale of Triton
France S.A. included elsewhere in this Proxy Statement/Prospectus, and the
pro forma consolidated condensed statements of operations for the years
ended May 31, 1993 and 1992 would be identical to the historical
Consolidated Statements of Operations of Triton Delaware as reported in
Triton Delaware's Current Report on Form 8-K dated August 24, 1995, which
is incorporated herein by reference.
(3) This pro forma presentation assumes that .9 million shares of Triton
Delaware Preferred Stock are issued, that holders of 25% of Triton Delaware
Common Stock make an Equity Unit Election and that one-tenth of a share of
Triton Delaware Preferred Stock is valued at $ . If holders of 15% of
Triton Delaware Common Stock make an Equity Unit Election, the amount shown
for preferred stock of subsidiary would be $263 million.
22
<PAGE>
RISK FACTORS
Before voting on the proposal to adopt the Merger Agreement, Triton Delaware
stockholders should carefully read this entire Proxy Statement/Prospectus and
should give particular attention to the following risks factors:
CERTAIN TAX CONSEQUENCES. Triton Delaware will receive opinions of Special
Tax Counsel to the effect that it is more likely than not that the Triton
Delaware Preferred Stock will be treated as stock of Triton Delaware and that
the receipt of such Triton Delaware Preferred Stock will not be a taxable
transaction. In such case, stockholders electing to receive Equity Units will be
subject to U.S. federal income tax only with respect to that portion of the fair
market value (on the date of the Reorganization) of such Equity Unit
attributable to the Class B Share. However, in view of the absence of authority
dealing with transactions similar to the Reorganization or securities of a type
similar to the Equity Units, Special Tax Counsel believe there is significant
uncertainty and no assurance can be given that the IRS or the courts will agree.
As of the date of this Proxy Statement/Prospectus, Triton Delaware believes,
based upon the advice of Lehman and J.P. Morgan, that the fair market value of a
Class B Share would be approximately $ and the fair market value of
one-tenth of one share of Triton Delaware Preferred Stock would be approximately
$ , based upon the closing price of the Triton Delaware Common Stock on
the NYSE Composite Transactions Tape on , 1996 of $ . Triton
Delaware will provide stockholders making an Equity Unit Election with
confirmation of its financial advisors' estimate of the fair market value of the
Triton Delaware Preferred Stock and the Class B Shares as of the date of the
Reorganization. No assurance can be given that the IRS will not take the
position that Class B Shares have a higher fair market value than that estimated
by Triton Delaware. Moreover, the IRS may argue that the entire fair market
value of the Equity Units should be treated as taxable consideration in the
Reorganization. See "Certain Tax Considerations -- United States Federal Income
Tax Consequences -- Equity Unit Election."
Following the Reorganization, Triton Delaware intends to transfer
substantially all of its businesses or subsidiaries located outside the United
States, other than Triton Delaware's interests in the Cusiana and Cupiagua
fields in Colombia, to Triton Cayman for an aggregate purchase price estimated
to be approximately $ million. The value of the assets to be transferred
will be based on independent third party appraisals as of the dates of the
transfers and are expected to result in an aggregate gain for tax purposes
estimated to be approximately $ million. Of Triton Delaware's net operating
loss carryforwards ("NOLs"), approximately $ is expected to be available to
offset the anticipated gains. The appraisals will not be binding on the IRS,
which may argue that the gains are larger, perhaps exceeding available NOLs.
Triton Delaware expects to defer the gain on the sale of the assets to Triton
Cayman by retaining preferred shares which will approximate the value of the
assets at the time of the sale to Triton Cayman.
ABSENCE OF PRIOR MARKET. Currently, there is no established trading market
for the Class A Shares or the Unit Depositary Shares. Although Triton Cayman
will apply to list the Unit Depositary Shares for trading on the New York Stock
Exchange, there can be no assurance that an active public market for the Unit
Depositary Shares will develop or be sustained. In addition, although Receipts
must be issued in respect of at least the Minimum Election Number, it is not
possible to determine how many Unit Depositary Shares will be issued upon the
consummation of the Reorganization and therefore the extent to which a trading
market in the Unit Depository Shares will develop. Triton Delaware expects that
because the number of Unit Depositary Shares will be, at most, one-third the
number of Class A Shares issued upon consummation of the Merger, the trading
market for the Unit Depositary Shares will be less liquid.
NO ASSURANCE AS TO TRADING VALUE. Triton Delaware believes that the fair
market value of a Class A Share is approximately equal to the fair market value
of an Equity Unit. There can be no assurance, however, that the market price of
a Class A Share will equal the market price of an Equity Unit upon consummation
of the Reorganization or at any time thereafter.
23
<PAGE>
THE OIL AND GAS INDUSTRY GENERALLY. Oil prices have been subject to
significant fluctuations over the past two decades. Levels of production
maintained by the Organization of Petroleum Exporting Countries member nations
and other major oil producing countries, and the actions of oil traders, are
expected to continue to be major determinants of petroleum price movements in
the near term. It is impossible to predict future petroleum price movements with
any certainty. Triton Delaware may from time to time enter into contracts to
hedge its risk against changing oil prices.
Triton Delaware's oil and gas business is subject to all of the operating
risks normally associated with the exploration for and production of oil and
gas, including blowouts, cratering, pollution, earthquakes, labor disruptions
and fires, each of which could result in damage to or destruction of oil and gas
wells, formations, production facilities or properties, or in personal injury.
In accordance with customary industry practices, Triton Delaware maintains
insurance coverage limiting financial loss resulting from certain of these
operating hazards. Losses and liabilities arising from uninsured or underinsured
events would reduce revenues and increase costs to Triton Delaware.
Triton Delaware's oil and gas business is also subject to laws, rules and
regulations in the countries in which it operates, which generally pertain to
production control, taxation, environmental and pricing concerns and other
matters relating to the petroleum industry.
Moreover, because Triton Delaware may not be the operator or own a majority
interest in a number of contract areas, it will not be able to control the
timing or manner in which capital expenditures will occur in these areas to the
same degree as if it were the operator or owner of a majority interest. Triton
Delaware's inability to meet its obligations in these and other contract areas
could have a material adverse effect on its interests in these contract areas.
TRITON DELAWARE'S FINANCIAL POSITION. Triton Delaware reported income from
continuing operations of $1.3 million and $5.9 million for the three and nine
months ended September 30, 1995, respectively, but losses from continuing
operations for the seven month transition period ended December 31, 1994 ($26.6
million) and for each of the last five fiscal years in the period ended May 31,
1994 ($4.6 million, $76.5 million, $81.3 million, $7.4 million and $50.2 million
for 1994, 1993, 1992, 1991 and 1990, respectively). To date, working capital
(amounting to $135.8 million as of September 30, 1995, excluding $3.9 million of
long-term marketable securities), external sources of funding, asset sales and
net cash flow from operations have been sufficient to service Triton Delaware's
existing debt obligations, even though Triton Delaware has experienced losses.
Triton Delaware expects to pursue financing alternatives and to dispose of
certain assets or operations in order to meet expenditure requirements on
existing or contemplated projects and to service its debt obligations, the
timing and nature of which may be affected by, among other things, the timing
and extent of production and capital expenditures in Colombia, Malaysia-Thailand
and elsewhere. There can be no assurance as to the ability of Triton Delaware to
effect sales of its assets or to access public or private markets for such
financings, the timing of such sales or financings or the proceeds, if any, that
Triton Delaware could realize therefrom. Moreover, Triton Delaware's ability to
pursue additional debt financing is limited by covenants in the indenture
pursuant to which $240 million principal amount of its 12% Senior Subordinated
Discount Notes due 1997 (the "1997 Notes") were issued in 1992 and in the
indenture pursuant to which $170 million principal amount of its 9 3/4% Senior
Subordinated Discount Notes due 2000 (the "2000 Notes") were issued in 1993.
For information regarding Triton Delaware's financial position and results
of operations and Triton Delaware's deficits of earnings to combined fixed
charges and preferred dividends, see "Summary -- Selected Historical Financial
and Oil and Gas Data" herein and Triton Delaware's Consolidated Statements of
Operations, Consolidated Balance Sheets and Consolidated Statements of Cash
Flows in Triton Delaware's annual and periodic reports and other documents
incorporated herein by reference.
ENVIRONMENTAL MATTERS. Triton Delaware is subject to extensive
environmental laws and regulations. These laws regulate the discharge of oil,
gas or other materials into the environment and may require Triton Delaware to
remove or mitigate the environmental effects of the disposal or release of
24
<PAGE>
such materials at various sites. Triton Delaware does not believe that its
environmental risks are materially different from those of comparable companies
in the oil and gas industry. Nevertheless, no assurance can be given that
environmental laws and regulations will not, in the future, adversely affect
Triton Delaware's results of operations, cash flows or financial position.
Pollution and similar environmental risks generally are not fully insurable.
RISKS OF FOREIGN OPERATIONS. Triton Delaware derives a significant portion
of its consolidated revenues from foreign operations. Risks inherent in foreign
operations include loss of revenue, property and equipment from such hazards as
expropriation, nationalization, war, insurrection and other political risks,
risks of increase in taxes and governmental royalties, renegotiation of
contracts with governmental entities, as well as changes in laws and policies
governing operations of foreign based companies. Other risks inherent in foreign
operations are the possibility of realizing economic currency exchange losses
when transactions are completed in currencies other than United States dollars
and Triton Delaware's ability to freely repatriate its earnings under existing
exchange control laws.
CERTAIN FACTORS RELATING TO COLOMBIA. Triton Delaware is a participant in
significant oil and gas discoveries located in the Llanos Basin in the foothills
of the Andes Mountains, approximately 160 kilometers (100 miles) northeast of
Bogota, Colombia. Triton Delaware owns interests in three contiguous areas known
as the Rio Chitamena, Santiago de las Atalayas ("SDLA") and Tauramena contract
areas. Test results for the initial exploratory and subsequent delineation wells
indicate that significant oil and gas deposits lie across the Rio Chitamena,
SDLA and Tauramena contract areas (the "Cusiana Field"), and within the SDLA
contract area (the "Cupiagua Field").
Largely due to complex geology, drilling of wells in the Cusiana and
Cupiagua fields has been comparatively difficult, lengthy in duration and
expensive. Triton Delaware believes that considerable progress has been achieved
in reducing the time and expenditures required to drill and complete wells in
the Cusiana and Cupiagua fields based on experience gained from initial wells
drilled. Although there can be no assurance, Triton Delaware believes that the
experience gained in the area to date will allow the operator to continue to
reduce the time and expenditures required to drill and complete wells in the
area. However, because Triton Delaware is not the operator of these contract
areas, Triton Delaware does not control the timing or manner of these
operations.
Full development of reserves in the Cusiana and Cupiagua fields will take
several years and require additional drilling and extensive production
facilities, which in turn will require significant additional capital
expenditures, the ultimate amount of which cannot be predicted. Pipelines
connect the major producing fields in Colombia to export facilities and to
refineries. These pipelines are in the process of being upgraded to accommodate
production from the Cusiana and Cupiagua fields.
Guerilla activity in Colombia has from time to time disrupted the operation
of oil and gas projects and increased costs. Although the Colombian government,
Triton Delaware and its partners have taken steps to improve security and
improve relations with the local population, there can be no assurance that
attempts to reduce or prevent guerrilla activity will be successful or that such
activity will not disrupt operations in the future.
REGULATORY MATTER. On July 28, 1992, the Commission requested that Triton
Delaware provide to the Commission, on a voluntary basis, information and
documents regarding certain of Triton Delaware's employees and former employees,
Triton Delaware's operations in Indonesia, Triton Delaware's dealings with
Indonesian officials, and Triton Delaware's internal accounting controls. The
staff of the Commission has advised Triton Delaware that Triton Delaware should
not construe this inquiry as an indication that any violation of law has
occurred or as an adverse reflection upon any person, entity or security.
Subsequently, Triton Delaware has been advised that the Justice Department is
conducting a similar inquiry. Triton Delaware continues to cooperate with both
agencies. Based upon the information available to Triton Delaware to date,
Triton Delaware believes that
25
<PAGE>
it will be able to resolve any issues that either agency ultimately might raise
concerning these matters in a manner that would not have a material adverse
effect on Triton Delaware's consolidated financial position.
THE SPECIAL MEETING
SPECIAL MEETING
A Special Meeting of the Triton Delaware stockholders will be held at
a.m., Dallas time, on , 1996, at Triton Energy Corporation, 6688
North Central Expressway, 12th Floor, Dallas, Texas 75206 (or any adjournments
or postponements thereof) to consider and vote on the proposal to adopt the
Merger Agreement and any other matters that may properly come before such
meeting. The presence, in person or by proxy, of stockholders holding a majority
of the outstanding Triton Delaware Common Stock entitled to vote at the Special
Meeting will constitute a quorum.
Management of Triton Delaware knows of no matters other than as described in
the accompanying Notice of Special Meeting which are likely to be brought before
the Special Meeting. However, if any other matters, not now known, properly come
before such meeting, the persons named in the enclosed proxy will vote the proxy
in accordance with their best judgment on such matters.
THE BOARD OF DIRECTORS OF TRITON DELAWARE HAS UNANIMOUSLY APPROVED THE
PROPOSED REORGANIZATION AND THE MERGER AGREEMENT AND RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE PROPOSAL TO ADOPT THE MERGER AGREEMENT.
RECORD DATE
Only Triton Delaware stockholders of record at the close of business on
, 1996, as shown on Triton Delaware's records, will be entitled to
vote, or to grant proxies to vote, at the Special Meeting.
The vote of any Triton Delaware stockholder who is represented at the
Special Meeting by proxy will be cast as specified in the proxy or, if no vote
is specified in the proxy, such vote will be cast FOR the proposal. Any Triton
Delaware stockholder of record who is present at the Special Meeting in person
will be entitled to vote at the meeting regardless of whether such stockholder
has previously granted a proxy with respect thereto.
VOTE REQUIRED FOR ADOPTION
Adoption of the Merger Agreement requires the affirmative vote of the
stockholders of Triton Delaware who hold a majority of the outstanding shares of
Triton Delaware Common Stock. Abstentions and broker "non-votes" will be treated
as votes against the proposal to adopt the Merger Agreement. As of the record
date described above, there were shares of Triton Delaware Common Stock
outstanding and entitled to vote. In addition, as of the record date, the
directors and executive officers of Triton Delaware and affiliates of such
persons directly owned, in the aggregate, shares (approximately %) of
the total number of shares of Triton Delaware Common Stock outstanding and have
indicated their intention to vote such shares in favor of the proposal to adopt
the Merger Agreement.
PROXIES
GENERAL
Each Triton Delaware stockholder as of the record date will receive a Proxy
Card. A stockholder of Triton Delaware may grant a proxy to vote for or against,
or to abstain from voting on, the proposal to adopt the Merger Agreement by
marking his/her Proxy Card appropriately, executing it in the space provided,
and, in the case of holders of Triton Delaware Common Stock appearing on the
stock records of Triton Delaware, returning it to Triton Delaware. Triton
Delaware stockholders who hold their Triton Delaware Common Stock in the name of
a bank, broker or other nominee should follow the instructions provided by their
bank, broker or nominee on voting their shares.
26
<PAGE>
To be effective, a Proxy Card must be received prior to the Special Meeting.
Any properly executed proxy will be voted in accordance with the specification
indicated on such Proxy Card. A properly executed and returned Proxy Card in
which no specification is made will be voted FOR the proposal to adopt the
Merger Agreement.
If any other matters are properly presented at the Special Meeting for
consideration, including consideration of a motion to adjourn the meeting to
another time and/or place (including adjournments for the purpose of soliciting
additional proxies), the persons named in the Proxy Card and acting thereunder
will have the discretion to vote on such matters in accordance with their best
judgment.
REVOCATION
In the case of holders of Triton Delaware Common Stock appearing on the
stock records of Triton Delaware, a Proxy Card may be revoked at any time prior
to its exercise by (a) giving written notice of such revocation to Triton
Delaware, (b) appearing and voting in person at the Special Meeting, or (c)
properly completing and executing a later-dated proxy and delivering it to
Triton Delaware at or before the Special Meeting. Presence without voting at the
Special Meeting will not automatically revoke a proxy, and any revocation during
the meeting will not affect votes previously taken. Triton Delaware stockholders
who hold their Triton Delaware Common Stock in the name of a bank, broker or
other nominee should follow the instructions provided by their bank, broker or
nominee in revoking their previously voted shares.
VALIDITY
All questions as to the validity, form, eligibility (including time of
receipt), and acceptance of Proxy Cards will be determined by the inspectors of
election. Any such determination will be final and binding. The Board of
Directors of Triton Delaware will have the right to waive any irregularities or
conditions as to the manner of voting. Triton Delaware may accept proxies by any
reasonable form of communication so long as it can reasonably be assured that
the communication is authorized by the Triton Delaware stockholder.
SOLICITATION OF PROXIES
The accompanying proxy is being solicited on behalf of the Board of
Directors of Triton Delaware. The expenses of preparing, printing and mailing
the proxy and the materials used in the solicitation thereof will be borne by
Triton Delaware.
Georgeson & Company Inc. has been retained by Triton Delaware to aid in the
solicitation of proxies, for a fee of $50,000 and the reimbursement of
out-of-pocket expenses. Proxies may also be solicited by personal interview,
telephone and telegram by directors, officers and employees of Triton Delaware
who will not receive additional compensation for such services. Arrangements
also may be made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of Triton Delaware Common Stock held by such persons, and Triton Delaware
will reimburse them for reasonable expenses incurred by them in connection
therewith.
PROPOSALS OF STOCKHOLDERS
Any stockholder who desired to present proposals to Triton Delaware's (or,
if the Reorganization is consummated, Triton Cayman's) 1996 Annual Meeting of
Stockholders and to have such proposals set forth in the proxy statement mailed
in conjunction with such Annual Meeting was required to have submitted such
proposals to Triton Delaware by December 5, 1995. All stockholder proposals are
required to comply with Rule 14a-8 promulgated by the Commission pursuant to the
Exchange Act.
27
<PAGE>
TRITON DELAWARE AND TRITON CAYMAN
Triton Delaware is an international oil and gas exploration company
primarily engaged in exploration and production through subsidiaries and
affiliates. Triton Delaware's principal properties and operations are located in
Colombia and Malaysia-Thailand. Triton Delaware also has oil and gas interests
in other Latin American and Asian countries, Europe, Australia and North
America.
Triton Cayman is a newly formed Cayman Islands company and a wholly-owned
subsidiary of Triton Delaware. Triton Cayman was formed to become the parent
holding company of Triton Delaware. All of the capital stock of Triton Cayman is
currently held by Triton Delaware. After the consummation of the Reorganization,
Triton Delaware will become a subsidiary of Triton Cayman and substantially all
of Triton Delaware's businesses or subsidiaries located outside of the United
States, other than Triton Delaware's interests in the Cusiana and Cupiagua
fields in Colombia, will be transferred to Triton Cayman. See "Pro Forma
Financial Information." Triton Cayman has formed a wholly-owned subsidiary, Sub,
specifically to effect the Reorganization. Neither Triton Cayman nor Sub has any
significant assets or capitalization nor has engaged in any business or prior
activities other than in connection with the Reorganization.
28
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
BASIS OF PRESENTATION
The accompanying unaudited Pro Forma Consolidated Condensed Balance Sheet of
Triton Energy Limited ("Triton Cayman"), a Cayman Islands company and
wholly-owned subsidiary of Triton Energy Corporation ("Triton Delaware"), gives
effect to (i) the acquisition of Triton Delaware in connection with the proposed
Reorganization, whereby Triton Cayman will become the parent holding company of
Triton Delaware and (ii) subsequent to the Reorganization, the acquisition by
Triton Cayman of substantially all of the businesses or subsidiaries of Triton
Delaware located outside of the United States, other than Triton Delaware's
interests in the Cusiana and Cupiagua fields in Colombia. The Reorganization
will be accounted for as a combination of entities under common control (as if
it were a pooling of interests). The unaudited Pro Forma Consolidated Condensed
Balance Sheet presents the combined financial position of Triton Cayman and
Triton Delaware as of September 30, 1995 assuming the proposed Reorganization
and purchase of assets had occurred as of September 30, 1995. Unaudited pro
forma consolidated condensed statements of operations for Triton Cayman are not
presented herewith because the unaudited pro forma consolidated condensed
statements of operations of Triton Cayman for the nine months ended September
30, 1995, the seven month transition period ended December 31, 1994 and the year
ended May 31, 1994 would be identical to the historical results of operations
included within the unaudited pro forma consolidated condensed statements of
operations of Triton Delaware reflecting the sale of Triton France S.A. included
in this Proxy Statement/Prospectus, and the unaudited pro forma consolidated
condensed statements of operations for the years ended May 31, 1993 and 1992
would be identical to the historical Consolidated Statements of Operations of
Triton Delaware as reported in Triton Delaware's Current Report on Form 8-K
dated August 24, 1995, which is incorporated herein by reference.
The Pro Forma Consolidated Condensed Balance Sheet of Triton Cayman should
be read in conjunction with the restated consolidated financial statements and
the related notes included in Triton Delaware's Current Report on Form 8-K dated
August 24, 1995. The pro forma financial information is not indicative of Triton
Cayman's financial position that might have occurred had such transaction
actually occurred on the date indicated above.
29
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
TRITON ENERGY ISSUANCE OF
HISTORICAL CORPORATION (A) EQUITY UNITS (B) PRO FORMA
----------- -------------- ---------------- ------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
(UNAUDITED)
ASSETS
Current assets:
Cash and equivalents.............................. $ -- $ 75,989 $ -- $ 75,989
Short-term marketable securities.................. -- 57,338 -- 57,338
Receivables....................................... -- 33,122 -- 33,122
Inventories, prepaid expenses and other........... -- 5,927 -- 5,927
----------- -------------- ---------------- ------------
Total current assets.......................... -- 172,376 -- 172,376
Long-term marketable securities..................... -- 3,930 -- 3,930
Property and equipment, at cost, less accumulated
depreciation and depletion of $261,504............. -- 465,816 -- 465,816
Investments and other assets........................ -- 185,033 -- 185,033
----------- -------------- ---------------- ------------
$ -- $ 827,155 $ -- $ 827,155
----------- -------------- ---------------- ------------
----------- -------------- ---------------- ------------
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Current liabilities:
Current installments of long-term debt............ $ -- $ 1,313 $ -- $ 1,313
Accounts payable and accrued liabilities.......... -- 35,273 -- 35,273
----------- -------------- ---------------- ------------
Total current liabilities..................... -- 36,586 -- 36,586
----------- -------------- ---------------- ------------
Long-term debt, excluding current installments...... -- 404,944 -- 404,944
Deferred income taxes............................... -- 26,137 -- 26,137
Deferred income and other........................... -- 116,276 -- 116,276
Convertible debentures due to employees............. -- -- -- --
Preferred stock of a subsidiary..................... -- -- 439,086 439,086
Stockholders' equity:
5% Convertible preference shares.................. -- 14,119(c) -- 14,119
Ordinary shares:
Class A......................................... 1 35,871 (35,603)(d) 269
Subscription receivable....................... (1) -- 1 --
Class B......................................... -- -- 90(d) 90
Class C......................................... -- -- -- --
Additional paid-in capital........................ -- 514,266 (403,574)(e) 110,692
Accumulated deficit............................... -- (311,902) -- (311,902)
Foreign currency translation adjustment........... -- (8,519) -- (8,519)
Other............................................. -- (281) -- (281)
----------- -------------- ---------------- ------------
-- 243,554 (439,086) (195,532)
Less cost of common stock in treasury............. -- 342 -- 342
----------- -------------- ---------------- ------------
Total stockholders' equity.................... -- 243,212 (439,086) (195,874)
Commitments and contingencies....................... -- -- -- --
----------- -------------- ---------------- ------------
$ -- $ 827,155 $ -- $ 827,155
----------- -------------- ---------------- ------------
----------- -------------- ---------------- ------------
</TABLE>
Triton Energy Limited uses the full cost method to account for its oil and gas
producing activities.
See accompanying notes to pro forma consolidated condensed financial statements.
30
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. PLAN OF REORGANIZATION
Triton Energy Corporation ("Triton Delaware") has proposed a reorganization
pursuant to which Triton Energy Limited ("Triton Cayman"), a Cayman Islands
company and a wholly-owned subsidiary of Triton Delaware, will become the parent
holding company of Triton Delaware. The Reorganization will be effected pursuant
to the Agreement and Plan of Merger among Triton Cayman, Triton Delaware and TEL
Merger Corp., a Delaware corporation and a wholly-owned subsidiary of Triton
Cayman ("Sub").
In connection with the Reorganization, holders, in the aggregate, of not
less than 15% but not more than 25% of the outstanding shares of Triton Delaware
Common Stock may make an unconditional election (the "Equity Unit Election") to
receive one Equity Unit ("Equity Unit") comprised of (i) one Class B ordinary
share of Triton Cayman, par value $.01 per share ("Class B Share"), and (ii)
one-tenth of one share of participating preferred stock, par value $.01 per
share, of Triton Delaware ("Triton Delaware Preferred Stock"), which securities
shall be paired and after such pairing may only be traded together as a unit and
will not be separately transferable. Each outstanding share of Triton Delaware
Common Stock, other than those with respect to which an Equity Unit Election has
been made, will be automatically converted into one Class A ordinary share, par
value of $.01 per share ("Class A Share") of Triton Cayman. Each outstanding
share of 5% convertible preferred stock of Triton Delaware will be automatically
converted into one 5% convertible preference share of Triton Cayman.
Pro forma adjustments are made to reflect:
(a) the acquisition of Triton Delaware and subsidiaries as if the
acquisition occurred on September 30, 1995;
(b) the issuance of 9 million Equity Units, each consisting of one Class
B Share of Triton Cayman and one-tenth of one share of Triton
Delaware Preferred Stock, assuming holders of 25% of Triton Delaware Common
Stock make an Equity Unit Election and that each one-tenth of one share of
Triton Delaware Preferred Stock is valued at $ . If holders of 15% of
Triton Delaware's Common Stock make an Equity Unit Election, the amount
shown for preferred stock of a subsidiary would be $263 million;
(c) the conversion, pursuant to the Reorganization, of .4 million shares
of Triton Delaware's 5% convertible preferred stock into .4 million
5% convertible preference shares of Triton Cayman;
(d) the reduction of the par value of 35.9 million shares of Triton
Delaware Common Stock from $1.00 per share to $.01 per share, in
connection with the issuance of Ordinary Shares. Following the
Reorganization, Triton Cayman will have 26.9 million Class A Shares and 9
million Class B Shares outstanding, assuming holders of 25% of the
outstanding shares of Triton Delaware Common Stock make an Equity Unit
Election; and
(e) the net reduction to additional paid-in capital resulting from the
issuance of Class A Shares and Equity Units pursuant to the
Reorganization.
2. FORMATION OF TRITON CAYMAN
Triton Cayman was incorporated on August 23, 1995 to become the parent
holding company of Triton Delaware. The balances of Triton Cayman reported in
the unaudited Pro Forma Consolidated Condensed Balance Sheet as of September 30,
1995 reflect the initial capitalization of Triton Cayman.
3. TRANSFER OF ASSETS
Following the Reorganization, Triton Delaware intends to transfer
substantially all of its businesses or subsidiaries located outside of the
United States, other than Triton Delaware's interests in the Cusiana and
Cupiagua fields in Colombia, to Triton Cayman for an aggregate purchase price
31
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)
3. TRANSFER OF ASSETS (CONTINUED)
estimated to be approximately $ million. Triton Delaware will retain
preferred stock of Triton Oil Company of Thailand JDA Ltd. with an estimated
stated value of $ million through which Triton Cayman will hold its
interest in Block A-18 of the Malaysia-Thailand Joint Development Area and
preferred stock of Triton International Petroleum, Inc. with an estimated stated
value of $ million through which Triton Cayman will hold its interests in
various other oil and gas exploration ventures worldwide. No book gain or loss
will be recognized by Triton Cayman on a consolidated basis. The consideration
for the contemplated transfers, as well as the stated value of the preferred
stock to be retained by Triton Delaware, will be determined at the time of such
transfers and the issuance of such shares, respectively, and will be based on
independent third party appraisals.
4. TRITON DELAWARE PREFERRED STOCK
Holders of Triton Delaware Preferred Stock will be entitled to receive
dividends, when, as and if declared by the Board of Directors of Triton Delaware
on the common stock of Triton Delaware outstanding after the Reorganization, in
an amount such that the aggregate amount of the dividend declared with respect
to the Triton Delaware Preferred Stock shall be a percentage of the aggregate
amount of the dividend declared on the Triton Delaware Preferred Stock and the
common stock (and any other series or class of stock that participates in
dividends with the holders of the common stock) equal to the product of (x) the
number determined by dividing the number of shares of Triton Delaware Preferred
Stock outstanding at such time multiplied by ten, by the total number of shares
of Triton Delaware Common Stock outstanding immediately prior to the Effective
Time multiplied by (y) 100. In case of the voluntary or involuntary liquidation,
dissolution, or winding-up of Triton Delaware, holders of shares of Triton
Delaware Preferred Stock are entitled to receive out of the assets of Triton
Delaware available for distribution to its stockholders an amount per share of
Triton Delaware Preferred Stock equal to the fair market value of one-tenth of
one share of Triton Delaware Preferred Stock at the Effective Time, as
determined by Triton Delaware upon the advice of its financial advisors (the
"Liquidation Preference"), before any payment or distribution is made to the
holders of any series or class of Triton Delaware's stock which ranks junior as
to liquidation rights to the Triton Delaware Preferred Stock. After payment in
full of the Liquidation Preference, the holders of such shares of Triton
Delaware Preferred Stock will be entitled to share with the holders of common
stock of Triton Delaware in any distribution of assets by Triton Delaware. In
connection with any such distribution, the holders of the shares of Triton
Delaware Preferred Stock shall receive a portion of such distribution equal to
the product of the aggregate distribution and the percentage of shares of Triton
Delaware Common Stock that receive Equity Units in the Merger, and the holders
of common stock of Triton Delaware shall receive the remainder of such
distribution. In the event that the number of outstanding shares of Triton
Delaware Preferred Stock decreases, such percentage shall be decreased in
proportion to such decrease in number of shares of Triton Delaware Preferred
Stock. Neither a consolidation or merger of Triton Delaware with another
corporation nor a sale or transfer of all or part of Triton Delaware's assets
will be considered a liquidation, dissolution or winding-up of Triton Delaware.
Either Triton Cayman or Triton Delaware may, at its option, purchase Equity
Units, in whole or in part, at any time on or after , 1999. Triton
Cayman may also, at its option, purchase Equity Units, in whole or in part, at
any time immediately prior to the date on which a sale or other disposition of
the stock of Triton Delaware is consummated. The purchase price of one Equity
Unit payable upon such purchase will generally be equal to the greater of .95 of
one Class A Share and the fair market value of an Equity Unit, payable in cash
or, by Triton Cayman, in Ordinary Shares. Neither Triton Cayman nor Triton
Delaware can exercise its option to purchase the Equity Units in certain
circumstances, including in the event of the bankruptcy or insolvency of Triton
Delaware.
32
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)
5. ORDINARY SHARES
The authorized capital stock of Triton Cayman is divided into 200,000,000
Class A Shares, 10,000,000 Class B Shares, 10,000,000 class C ordinary shares,
par value $.01 per share (the "Class C Shares"), and 20,000,000 preference
shares. The Class A Shares, the Class B Shares and the Class C Shares rank pari
passu in all respects and have equal voting and other rights, except as set
forth in the Articles of Association.
The rights of holders of Triton Cayman's Class B Shares have been
specifically designed to permit a Class B Share to be paired with and only
transferable with one-tenth of one share of Triton Delaware Preferred Stock in
the form of an Equity Unit which is to be distributed only in connection with
the Reorganization to holders electing to receive such consideration. It is
intended that Class A Shares will be available for future issuances of equity
securities, if any, required by Triton Cayman to raise capital, in connection
with acquisitions or otherwise. It is intended that the Class C Shares will only
be issued in certain circumstances. The holders of the Class C Shares will be
entitled to the same dividend rights, liquidation preferences and voting and
other rights as the holders of the Class A Shares, except that they will be
subject to certain preferential rights of the holders of the Class A Shares. See
"Description of Authorized Shares of Triton Cayman."
The holders of Ordinary Shares will be entitled at any time to receive such
dividends as are declared by the Board of Directors of Triton Cayman. The
ability of Triton Cayman to pay dividends on capital stock is restricted by
covenants in indentures to which Triton Cayman will be a party upon the
consummation of the Reorganization.
Aggregate dividends declared and paid on one Class A Share are expected to
be equivalent to the aggregate dividends, if any, declared and paid on one-tenth
of one share of Triton Delaware Preferred Stock and one Class B Share included
in one Equity Unit. The holders of the Equity Units, in their capacity as
holders of shares of Triton Delaware Preferred Stock, may receive dividends at a
time or times when no dividends are being declared or paid on the Class A Shares
or the Class B Shares.
33
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
BASIS OF PRESENTATION
The accompanying unaudited pro forma consolidated financial statements of
Triton Energy Corporation ("Triton Delaware") give effect to the transfer of
substantially all of its businesses or subsidiaries located outside of the
United States, other than Triton Delaware's interests in the Cusiana and
Cupiagua fields in Colombia, to Triton Energy Limited ("Triton Cayman"), a
Cayman Islands company and wholly-owned subsidiary of Triton Delaware, following
the proposed Reorganization, whereby Triton Cayman will become the parent
holding company of Triton Delaware. The unaudited Pro Forma Consolidated
Condensed Balance Sheet adjusts the September 30, 1995 consolidated condensed
balance sheet as though such transactions occurred on September 30, 1995. The
unaudited Pro Forma Consolidated Condensed Statements of Operations adjusts the
consolidated condensed statements of operations for the nine months ended
September 30, 1995, the seven month transition period ended December 31, 1994
and the year ended May 31, 1994 as though such transactions occurred on June 1,
1993. The pro forma results exclude any nonrecurring charges or credits directly
attributable to the transaction.
The pro forma consolidated financial statements should be read in
conjunction with the restated consolidated financial statements and the related
notes included in Triton Delaware's Current Report on Form 8-K dated August 24,
1995. The pro forma financial information is not indicative of the Triton
Delaware's financial position or the results of operations that might have
occurred had such transaction actually occurred on the dates indicated above.
34
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
DISPOSITION OF ISSUANCE OF
DESIGNATED PREFERRED
ASSETS HISTORICAL SUBSIDIARIES STOCK PRO FORMA
---------- --------------- --------------- ----------
(IN THOUSANDS)
(UNAUDITED)
Current assets:
<S> <C> <C> <C> <C>
Cash and equivalents............. $ 75,989 $ (1,618)(a) $ -- $ 74,371
Short-term marketable
securities...................... 57,338 -- (a) -- 57,338
Receivables...................... 33,122 (2,529)(a) -- 30,593
Inventories, prepaid expenses and
other........................... 5,927 (2,177)(a) -- 3,750
---------- --------------- --------------- ----------
Total current assets........... 172,376 (6,324) -- 166,052
Long-term marketable securities.... 3,930 -- -- 3,930
Property and equipment, at cost,
less depreciation and depletion... 465,816 (118,253)(a) -- 347,563
Investments and other assets....... 185,033 (22,567)(a) -- 162,466
Investments in affiliates.......... -- 250,000(b) -- 250,000
---------- --------------- --------------- ----------
$ 827,155 $ 102,856 $ -- $ 930,011
---------- --------------- --------------- ----------
---------- --------------- --------------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term
debt............................ $ 1,313 $ -- $ -- $ 1,313
Accounts payable and accrued
liabilities..................... 35,273 (13,310)(a) -- 21,963
---------- --------------- --------------- ----------
Total current liabilities...... 36,586 (13,310) -- 23,276
---------- --------------- --------------- ----------
Long-term debt, excluding
current........................... 404,944 -- -- 404,944
Deferred income taxes.............. 26,137 (5,375)(a) -- 20,762
Deferred income and other.......... 116,276 -- -- 116,276
Convertible debentures due to
employees......................... -- -- -- --
Stockholders' equity:
5% Convertible preferred stock... 14,119 (14,119)(d) -- --
Participating preferred stock.... -- -- 439,086(c) 439,086
Common stock..................... 35,871 -- (35,512)(e) 359
Additional paid-in capital....... 514,266 14,119(d) (403,574) 124,811
Accumulated deficit.............. (311,902) 121,400(b) -- (190,502)
Foreign currency translation
adjustment...................... (8,519) 141(a) -- (8,378)
Other............................ (281) -- -- (281)
---------- --------------- --------------- ----------
243,554 121,541 -- 365,095
Less cost of common stock in
treasury........................ 342 -- -- 342
---------- --------------- --------------- ----------
Total stockholders' equity..... 243,212 121,541 -- 364,753
Commitments and contingencies...... -- -- -- --
---------- --------------- --------------- ----------
$ 827,155 $ 102,856 $ -- $ 930,011
---------- --------------- --------------- ----------
---------- --------------- --------------- ----------
</TABLE>
Triton Energy Corporation uses the full cost method to account for its oil and
gas producing activities.
See accompanying notes to pro forma consolidated condensed financial statements.
35
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
DISPOSITION OF
DESIGNATED
HISTORICAL (2) SUBSIDIARIES (G) PRO FORMA
--------------- --------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Sales and other operating revenues......... $ 71,584 $ -- $71,584
Other income............................... 13,739 484 14,223
Investment income from affiliates.......... -- 16,875(f) 16,875
--------------- --------------- -----------
85,323 17,359 102,682
--------------- --------------- -----------
Costs and expenses:
Operating.................................. 21,750 -- 21,750
General and administrative................. 18,218 (1,505) 16,713
Depreciation, depletion and amortization... 15,877 (77) 15,800
Writedown of assets........................ -- -- --
Interest................................... 18,198 6,605 24,803
Equity in (earnings) loss of affiliates,
net....................................... 1,014 -- 1,014
Foreign exchange (gain) loss............... (851) 299 (552)
--------------- --------------- -----------
74,206 5,322 79,528
--------------- --------------- -----------
Earnings (loss) from continuing operations
before income taxes and minority
interest.................................. 11,117 12,037 23,154
Income tax provision (benefit):
Current.................................... 921 -- 921
Deferred................................... 8,873 (2,337) 6,536
--------------- --------------- -----------
1,323 14,374 15,697
Minority interest in loss of subsidiaries.... -- -- --
--------------- --------------- -----------
Earnings (loss) from continuing
operations................................ $ 1,323 $ 14,374 $15,697
--------------- --------------- -----------
--------------- --------------- -----------
Weighted average number of shares
outstanding................................. 35,088 35,088
--------------- -----------
--------------- -----------
Earnings (loss) from continuing operations
per common share............................ $ 0.01 $ 0.42
--------------- -----------
--------------- -----------
</TABLE>
See accompanying notes to pro forma consolidated condensed financial statements
36
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
SEVEN MONTHS ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
DISPOSITION OF
DESIGNATED
HISTORICAL (2) SUBSIDIARIES (G) PRO FORMA
--------------- --------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Sales and other operating revenues......... $ 11,557 $ -- $ 11,557
Other income............................... 4,367 98 4,465
Investment income from affiliates.......... -- 13,125(f) 13,125
--------------- ------- -----------
15,924 13,223 29,147
--------------- ------- -----------
Costs and expenses:
Operating.................................. 6,578 4 6,582
General and administrative................. 15,517 (1,045) 14,472
Depreciation, depletion and amortization... 4,976 (59) 4,917
Writedown of assets........................ 984 -- 984
Interest................................... 7,707 3,354 11,061
Equity in (earnings) loss of affiliates,
net....................................... 4,102 -- 4,102
Foreign exchange (gain) loss............... (362) 182 (180)
--------------- ------- -----------
39,502 2,436 41,938
--------------- ------- -----------
Earnings (loss) from continuing operations
before income taxes and minority
interest.................................. (23,578) 10,787 (12,791)
Income tax provision (benefit):
Current.................................... (773) -- (773)
Deferred................................... 4,569 (1,600) 2,969
--------------- ------- -----------
(27,374) 12,387 (14,987)
Minority interest in loss of subsidiaries.... -- -- --
--------------- ------- -----------
Earnings (loss) from continuing
operations................................ $ (27,374) $ 12,387 $(14,987)
--------------- ------- -----------
--------------- ------- -----------
Weighted average number of shares
outstanding................................. 34,944 34,944
--------------- -----------
--------------- -----------
Earnings (loss) from continuing operations
per common share............................ $ (0.80) $ (0.44)
--------------- -----------
--------------- -----------
</TABLE>
See accompanying notes to pro forma consolidated condensed financial statements
37
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1994
<TABLE>
<CAPTION>
DISPOSITION OF
DESIGNATED
HISTORICAL (2) SUBSIDIARIES (G) PRO FORMA
--------------- --------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Sales and other operating revenues......... $ 25,714 $ (229) $ 25,485
Gain on sale of Triton Canada common
stock..................................... 47,865 -- 47,865
Other income............................... 15,925 417 16,342
Investment income from affiliates.......... -- 22,500(f) 22,500
--------------- --------------- -----------
89,504 22,688 112,192
--------------- --------------- -----------
Costs and expenses:
Operating.................................. 17,540 (249) 17,291
General and administrative................. 26,894 (447) 26,447
Depreciation, depletion and amortization... 9,943 (59) 9,884
Writedown of assets........................ 2,553 (168) 2,385
Interest................................... 7,372 2,986 10,358
Equity in (earnings) loss of affiliates,
net....................................... (645) -- (645)
Foreign exchange (gain) loss............... (169) (8) (177)
--------------- --------------- -----------
63,488 2,055 65,543
--------------- --------------- -----------
Earnings (loss) from continuing operations
before income taxes and minority
interest.................................. 26,016 20,633 46,649
Income tax provision (benefit):
Current.................................... 5,733 -- 5,733
Deferred................................... 437 (1,565) (1,128)
--------------- --------------- -----------
19,846 22,198 42,044
Minority interest in (earnings) loss of
subsidiaries................................ (56) (321) (377)
--------------- --------------- -----------
Earnings (loss) from continuing
operations................................ $ 19,790 $ 21,877 $ 41,667
--------------- --------------- -----------
--------------- --------------- -----------
Weighted average number of shares
outstanding................................. 34,775 34,775
--------------- -----------
--------------- -----------
Earnings (loss) from continuing operations
per common share............................ $ 0.57 $ 1.20
--------------- -----------
--------------- -----------
</TABLE>
See accompanying notes to pro forma consolidated condensed financial statements
38
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. PLAN OF REORGANIZATION
Triton Energy Corporation ("Triton Delaware") has proposed a reorganization
pursuant to which Triton Energy Limited ("Triton Cayman"), a Cayman Islands
company and a wholly-owned subsidiary of Triton Delaware, will become the parent
holding company of Triton Delaware. The Reorganization will be effected pursuant
to the Agreement and Plan of Merger among Triton Cayman, Triton Delaware and TEL
Merger Corp., a Delaware corporation and a wholly-owned subsidiary of Triton
Cayman ("Sub").
In connection with the Reorganization, holders in the aggregate of not less
than 15% but not more than 25% of the outstanding shares of Triton Delaware
Common Stock may make an unconditional election (the "Equity Unit Election") to
receive one equity unit ("Equity Unit") comprised of (i) one Class B ordinary
share of Triton Cayman, par value $.01 per share ("Class B Share"), and (ii)
one-tenth of one share of participating preferred stock, par value $.01 per
share, of Triton Delaware ("Triton Delaware Preferred Stock"), which securities
will be paired and after such pairing may only be traded together as a unit and
will not be separately transferable. Each outstanding share of Triton Delaware
Common Stock, other than those shares with respect to which an Equity Unit
Election has been made, will be automatically converted into one Class A
ordinary share, par value of $.01 per share ("Class A Shares"), of Triton
Cayman. Each outstanding share of 5% convertible preferred stock of Triton
Delaware will be automatically converted into one 5% convertible preference
share of Triton Cayman.
Following the Reorganization, Triton Delaware intends to transfer
substantially all of its businesses or subsidiaries located outside of the
United States, other than Triton Delaware's interests in the Cusiana and
Cupiagua fields in Colombia, to Triton Cayman for an aggregate purchase price
estimated to be approximately $ million. Triton Delaware will retain
preferred stock with an estimated stated value of $ million of Triton Oil
Company of Thailand JDA Ltd. through which Triton Cayman will hold its interest
in Block A-18 of the Malaysia-Thailand Joint Development Area and preferred
stock with an estimated stated value of $ million of Triton International
Petroleum, Inc. through which Triton Cayman will hold its interests in various
other oil and gas exploration ventures worldwide. The excess of the
consideration over the net book value of the assets to be sold of approximately
$ million to be recognized by Triton Delaware has been reported as an
increase to stockholders' equity in the unaudited Pro Forma Consolidated
Condensed Balance Sheet of Triton Delaware. The consideration for the
contemplated transfers, as well as the stated value of the preferred stock to be
retained by Triton Delaware, will be determined at the time of such transfers
and the issuance of such shares, respectively, and will be based on independent
third party appraisals.
Pro forma adjustments are made to reflect:
(a) the disposition of assets, liabilities and intercompany accounts of
the designated subsidiaries as if the sales occurred on September 30,
1995;
(b) the receipt of proceeds and resulting gain, net of taxes, from the
sale of the designated subsidiaries;
(c) the issuance of .9 million shares of Triton Delaware Preferred Stock,
assuming holders of 25% of Triton Delaware Common Stock make an
Equity Unit Election and that each one-tenth of one share of Triton Delaware
Preferred Stock is valued at $ . If holders of 15% of Triton Delaware's
Common Stock make an Equity Unit Election amounts shown for participating
preferred stock would be $263 million;
(d) the conversion, pursuant to the Reorganization, of .4 million shares
of Triton Delaware's 5% convertible preferred stock into .4 million
5% convertible preference shares of Triton Cayman;
39
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)
1. PLAN OF REORGANIZATION (CONTINUED)
(e) the reduction of the par value of Triton Delaware Common Stock (35.9
million shares outstanding on a historical and pro forma basis) from
$1.00 per share to $.01 per share, in connection with the Merger;
(f) interest charged at a rate of 9% per annum on the note from Triton
Cayman and accrued dividends at a rate of 9% per annum on the
preferred stock of Triton Oil Company of Thailand JDA Ltd. and Triton
International Petroleum, Inc.; and
(g) the elimination of the results of operations related to the
designated subsidiaries as if the acquisition occurred on June 1,
1993. The designated subsidiaries primarily represent Triton Delaware's
exploration operations. Interest expense increased on a pro forma basis due
to decreased capitalized interest.
2. SALE OF TRITON FRANCE S.A.
On August 18, 1995, Triton Delaware sold Triton France S.A, ("Triton
France") through which it held its interest in the Villeperdue field. Triton
Delaware filed pro forma financial statements in its Current Report on Form 8-K
dated August 24, 1995 reflecting the disposition of Triton France. The
historical results reported in the unaudited Pro Forma Consolidated Condensed
Statements of Operations for the nine months ended September 30, 1995, the seven
month transition period ended December 31, 1994 and the year ended May 31, 1994
of Triton Delaware included in this Proxy Statement/Prospectus reflect the pro
forma results of operations of Triton Delaware as if the sale of Triton France
occurred on June 1, 1993.
3. TRITON DELAWARE PREFERRED STOCK
Holders of shares of Triton Delaware Preferred Stock will be entitled to
receive dividends, when, as and if declared by the Board of Directors of Triton
Delaware on the common stock of Triton Delaware outstanding after the
Reorganization, in an amount such that the aggregate amount of the dividend
declared with respect to the Triton Delaware Preferred Stock shall be a
percentage of the aggregate amount of the dividend declared on the Triton
Delaware Preferred Stock and the common stock (and any other series or class of
stock that participates in dividends with the holders of the common stock) equal
to the product of (x) the number determined by dividing the number of shares of
Triton Delaware Preferred Stock outstanding at such time multiplied by ten, by
the total number of shares of Triton Delaware Common Stock outstanding
immediately prior to the Effective Time multiplied by (y) 100. In case of the
voluntary or involuntary liquidation, dissolution, or winding-up of Triton
Delaware, holders of shares of Triton Delaware Preferred Stock are entitled to
receive out of the assets of Triton Delaware available for distribution to its
stockholders an amount per share of Triton Delaware Preferred Stock equal to the
fair market value of one-tenth of one share of Triton Delaware Preferred Stock
at the Effective Time, as determined by Triton Delaware upon the advice of its
financial advisors (the "Liquidation Preference"), before any payment or
distribution is made to the holders of any series or class of Triton Delaware's
stock which ranks junior as to liquidation rights to the Triton Delaware
Preferred Stock. After payment in full of the Liquidation Preference, the
holders of such shares of Triton Delaware Preferred Stock will be entitled to
share with the holders of common stock of Triton Delaware in any distribution of
assets by Triton Delaware. In connection with any such distribution, the holders
of shares of Triton Delaware Preferred Stock shall receive a portion of such
distribution equal to the product of the aggregate distribution and the
percentage of shares of Triton Delaware Common Stock that receive Equity Units
in the Merger, and the holders of common stock of Triton Delaware shall receive
the remainder of such distribution. In the event that the number of outstanding
shares of Triton Delaware Preferred Stock decreases, such percentage shall be
decreased in proportion to such decrease in number of shares of Triton Delaware
Preferred Stock.
40
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)
3. TRITON DELAWARE PREFERRED STOCK (CONTINUED)
Neither a consolidation or merger of Triton Delaware with another corporation
nor a sale or transfer of all or part of Triton Delaware's assets will be
considered a liquidation, dissolution, or winding-up of Triton Delaware.
Either Triton Cayman or Triton Delaware may, at its option, purchase Equity
Units, in whole or in part at any time on or after , 1999. Triton
Cayman may also, at its option, purchase Equity Units, in whole or in part, at
any time immediately prior to the date on which a sale or other disposition of
the stock of Triton Delaware is consummated. The purchase price of one Equity
Unit payable upon such purchase will generally be the greater of .95 of one
Class A Share and the fair market value of an Equity Unit, payable in cash or,
in the case of Triton Cayman, Ordinary Shares. Neither Triton Cayman nor Triton
Delaware can exercise its option to purchase the Equity Units in certain
circumstances, including in the event of the bankruptcy or insolvency of Triton
Delaware.
4. TRITON DELAWARE COMMON STOCK
Upon consummation of the Reorganization, Triton Cayman will own all
outstanding shares of Triton Delaware Common Stock.
41
<PAGE>
THE REORGANIZATION
GENERAL
The Board of Directors of Triton Delaware has unanimously approved, and
recommends that the stockholders of Triton Delaware adopt, a proposed corporate
reorganization pursuant to which Triton Cayman, a Cayman Islands company, will
become the parent holding company of Triton Delaware. It is proposed that the
Reorganization be effected pursuant to the Merger Agreement. After the
consummation of the Reorganization, Triton Cayman will continue to conduct the
businesses in which Triton Delaware is now engaged and substantially all of the
businesses or subsidiaries of Triton Delaware located outside of the United
States, other than Triton Delaware's interests in the Cusiana and Cupiagua
fields in Colombia, will be transferred to Triton Cayman. The relative voting
rights of Triton Delaware stockholders as shareholders of Triton Cayman will not
change as a result of the Reorganization. See " -- Transfer of Assets,"
"Description of Authorized Shares of Triton Cayman-Voting and Other Rights," "
- -- Special Rights Upon the Occurrence of Certain Events" and "Comparison of
Rights of Stockholders."
BACKGROUND AND REASONS FOR THE REORGANIZATION
International activities of Triton Delaware and its subsidiaries are a
significant part of Triton Delaware's business activities. Triton Delaware's
income is now, and is expected to continue to be, primarily derived from
activities outside of the United States.
The Board of Directors of Triton Delaware believes that the establishment of
a Cayman Islands holding company for Triton Delaware and its subsidiaries will
allow Triton Delaware to organize its international business activities to
benefit from more favorable business, tax and financing environments than would
be available to it if the parent corporation were a U.S. corporation.
Accordingly, the Board of Directors of Triton Delaware believes the
Reorganization should have a favorable impact on the conduct of Triton
Delaware's future business operations. In particular, the Board of Directors of
Triton Delaware is recommending the Reorganization for the following reasons:
(a)
The Board believes that the creation of a Cayman Islands parent
corporation will reduce corporate income taxes because, unlike the
U.S. tax system which imposes corporate income tax on the worldwide income
of United States corporations, the Cayman Islands generally imposes no
corporate income taxes on foreign income. Income taxes will therefore be
reduced to the extent operations, for example, in the Malaysia-Thailand
Joint Development Area, are conducted after the Reorganization by Triton
Cayman or its foreign subsidiaries.
(b)
The Board believes that the change of domicile may have a favorable
effect on its ability to sell assets or raise additional capital in
the future. The Code currently provides for the payment of certain estate
taxes in respect of the value of shares in a U.S. corporation owned by a
non-U.S. investor. In addition, the distributions with respect to stock in a
U.S. corporation to non-resident aliens could be subject to certain
withholding taxes under the Code. The Code currently does not generally
provide for estate or withholding taxes on distributions for non-resident
aliens in respect of stock of a non-U.S. corporation.
(c)
The Board believes that a holding company structure in the form
proposed by the Reorganization will provide greater management
flexibility and control, as well as a more suitable corporate structure for
expansion of its current business and future acquisitions and
diversification opportunities. Triton Delaware currently has no plans for
specific acquisitions or to diversify its business from the business it is
currently conducting.
In determining to recommend the Reorganization, the Board consulted with
Triton Delaware's management and its financial and legal advisors, and
considered a number of factors, including the Board's belief, based on
consultation with its financial advisors, that the fair market value of a Class
A Share and the fair market value of an Equity Unit will be substantially
equivalent on the date of the Reorganization, as well as the Board's desire to
afford stockholders electing to receive Equity Units the opportunity to be able
to defer a substantial portion of their taxable gain. Special Tax Counsel
42
<PAGE>
have rendered an opinion that it is more likely than not that the Triton
Delaware Preferred Stock will be treated as stock of Triton Delaware and that
the receipt of shares of the Triton Delaware Preferred Stock by stockholders who
elect to receive Equity Units will not be a taxable transaction. See "Certain
Tax Considerations."
FINANCIAL ADVISORS
The Board of Directors of Triton Delaware has received opinions, each dated
February , 1996, from Lehman and J.P. Morgan that, as of the date of such
opinions, (i) the inherent value of a Class A Share is substantially equivalent
to the inherent value of an Equity Unit and (ii) an allocation of the fair
market value of the components of an Equity Unit of $ for a Class B Share
and $ for one-tenth of one share of Triton Delaware Preferred Stock, based
on a closing trading price of $ per share of Triton Delaware Common Stock on
February , 1996, is reasonable. The full text of each of the opinions has been
filed as an exhibit to the Registration Statement of which this Proxy
Statement/Prospectus is a part.
In connection with rendering their opinions, Lehman and J.P. Morgan (a)
reviewed and analyzed the Merger Agreement, the Proxy Statement/Prospectus, the
specific terms of the Reorganization and certain publicly available information
concerning Triton Delaware; (b) reviewed and analyzed financial and operating
information and projections of Triton Delaware and Triton Cayman provided by
Triton Delaware; (c) reviewed and analyzed reserve reports and projected
economics relating to Triton Delaware's oil and gas assets provided by Triton
Delaware; (d) compared the trading history of Triton Delaware Common Stock with
that of the securities of certain other publicly-traded companies; and (f)
compared the historical financial results and present financial condition of
Triton Delaware with those of certain other companies. In addition, both Lehman
and J.P. Morgan discussed with management of Triton Delaware the business,
operations, assets, financial conditions and prospects of Triton Delaware and
undertook such other analyses and examinations and considered such other factors
as such financial advisors deemed appropriate.
In rendering their opinions, Lehman and J.P. Morgan assumed and relied upon
the accuracy and completeness of the financial and other information used by
them without assuming any responsibility for independent verification of such
information and further relied upon the assurances of management of Triton
Delaware that they are not aware of any facts that would make such information
inaccurate or misleading. With respect to the financial projections referred to
in clause (b) above, Lehman and J.P. Morgan assumed that such projections were
reasonably prepared on a basis reflecting the best currently available estimates
and judgments of the management of Triton Delaware as to the future financial
performance of Triton Delaware and Triton Cayman and that Triton Delaware and
Triton Cayman will perform substantially in accordance with such projections.
Neither Lehman nor J.P. Morgan conducted a physical inspection of the properties
and facilities of Triton Cayman or Triton Delaware. In addition, each opinion
states that it is necessarily based on the economic, market and other conditions
as in effect on, and the information made available to such financial advisor as
of, the date of such opinion.
THE BOARD OF DIRECTORS OF TRITON DELAWARE HAS UNANIMOUSLY APPROVED THE
PROPOSED REORGANIZATION AND RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION
OF THE MERGER AGREEMENT.
THE MERGER AGREEMENT
GENERAL
It is proposed that the Reorganization be effected pursuant to the Merger
Agreement. Pursuant to the Merger Agreement:
(i)
Sub will be merged with and into Triton Delaware, with Triton
Delaware being the surviving corporation.
43
<PAGE>
(ii)
Except as set forth below in paragraph (iv) and under "Equity Unit
Election," each outstanding share of Triton Delaware Common Stock
will be automatically converted into one Class A Share.
(iii)
The outstanding shares of common stock of Sub will be automatically
converted into a number of shares of common stock of Triton Delaware
equal to the number of shares of Triton Delaware Common Stock outstanding
immediately prior to the Effective Time of the Merger.
(iv)
The outstanding ordinary shares of Triton Cayman and the Triton
Delaware Common Stock held by Triton Delaware prior to the time the
Reorganization is effected will be cancelled.
As a result of the foregoing, upon effectiveness of the Merger, Triton
Delaware, as the surviving corporation in the Merger, will become a subsidiary
of Triton Cayman, and all the Class A Shares of Triton Cayman outstanding
immediately after the Merger will be owned by former common stockholders of
Triton Delaware.
The certificate of incorporation of Triton Delaware shall be the Certificate
of Incorporation of the surviving corporation of the Merger and will be amended
and restated as set forth in Exhibit A to the Merger Agreement.
Also in connection with the Merger, each outstanding share of Convertible
Preferred Stock of Triton Delaware will be automatically converted into one
Convertible Preference Share of Triton Cayman, subject to dissenters' appraisal
rights. See " -- Rights of Dissenting Stockholders" and "Description of
Authorized Shares of Triton Cayman -- Preference Shares -- Convertible
Preference Shares."
AMENDMENT OR TERMINATION
Triton Delaware, Triton Cayman and Sub, by action of their respective Boards
of Directors, may amend, modify or supplement the Merger Agreement at any time
before or after its adoption by the stockholders of Triton Delaware. After such
approval, no amendment, modification or supplement may be made or effected that
by law requires further approval by such stockholders without the further
approval of such stockholders.
The Merger Agreement provides that it may be terminated, and the
Reorganization abandoned, at any time, whether before or after stockholder
approval of the Merger Agreement is obtained, by action of the Board of
Directors of Triton Cayman.
CONDITIONS TO CONSUMMATION OF THE REORGANIZATION
The Reorganization will not be consummated unless the Merger Agreement is
adopted by the requisite vote of stockholders of Triton Delaware.
EQUITY UNIT ELECTION
Subject to the Equity Unit Limitation, record holders of Triton Delaware
Common Stock will be entitled to make an unconditional election (an "Equity Unit
Election") on or prior to the Election Date to receive one Equity Unit in
exchange for each share of Triton Delaware Common Stock held by such holders in
lieu of such shares being automatically converted into Class A Shares upon
consummation of the Reorganization. If the number of Electing Shares exceeds the
Maximum Election Number, then the aggregate number of Electing Shares to be
exchanged for Equity Units in the Merger in connection with any Equity Unit
Election will be reduced by multiplying the number of Electing Shares covered by
such Equity Unit Election by a proration factor (the "Proration Factor")
determined by dividing the Maximum Election Number by the total number of
Electing Shares. The number of Electing Shares covered by each Equity Unit
Election which will be exchanged for Equity Units will be that number which
results from multiplying the number of such Electing Shares by the Proration
Factor. Electing Shares not exchanged for Equity Units as a result of proration
will instead be automatically converted into Class A Shares on the basis
described above under "The Merger
44
<PAGE>
Agreement." In the event that the number of Electing Shares is less than the
Minimum Election Number, no Equity Units will be issued and Electing Shares will
be automatically converted into Class A Shares on the basis described above
under "The Merger Agreement."
Each Equity Unit issued in connection with the Merger will consist of one
Class B Share and one-tenth of one share of Triton Delaware Preferred Stock,
which securities will be paired and after such pairing may only be traded
together as an Equity Unit and will not be separately transferable. In lieu of
distributing the Equity Units to holders who make an Equity Unit Election, such
Equity Units will be deposited with the Depositary in exchange for the issuance
of Unit Depositary Shares, each representing one Equity Unit, Receipts for which
will be distributed to stockholders. To the extent required, the Exchange Agent
will requisition from the Depositary such number of Receipts as are issuable in
respect of shares of Triton Delaware Common Stock properly delivered to the
Exchange Agent along with the Form of Election up to the Maximum Election
Number.
EQUITY UNIT ELECTION PROCEDURE
The form for making an Equity Unit Election (the "Form of Election") is
being mailed to holders of Triton Delaware Common Stock with this Proxy
Statement/Prospectus. FOR A FORM OF ELECTION TO BE EFFECTIVE, HOLDERS OF TRITON
DELAWARE COMMON STOCK MUST PROPERLY COMPLETE SUCH FORM OF ELECTION, AND SUCH
FORM, TOGETHER WITH CERTIFICATES FOR THE SHARES OF TRITON DELAWARE COMMON STOCK
TO WHICH SUCH FORM RELATES, DULY ENDORSED IN BLANK OR OTHERWISE IN FORM
ACCEPTABLE FOR TRANSFER ON THE BOOKS OF TRITON DELAWARE (OR BY APPROPRIATE
GUARANTEE OF DELIVERY, AS SET FORTH IN SUCH FORM), MUST BE RECEIVED BY CHEMICAL
MELLON SHAREHOLDER SERVICES, L.L.C. (THE "EXCHANGE AGENT"), AT
AND NOT WITHDRAWN, BY 5:00 P.M., NEW YORK CITY TIME ON THE THIRD
BUSINESS DAY NEXT PRECEDING THE DATE OF THE SPECIAL MEETING (THE "ELECTION
DATE").
The determinations of the Exchange Agent as to whether or not Equity Unit
Elections have been properly made or revoked and when such elections or
revocations were received will be binding.
For a description of the Class B Shares and the Triton Delaware Preferred
Stock contained in an Equity Unit, see "Description of Authorized Shares of
Triton Cayman" and "Description of Triton Delaware Preferred Stock." For a
description of the Receipts, see "Description of the Receipts."
EFFECTIVE TIME
If the Merger Agreement is adopted by the stockholders of Triton Delaware
and not terminated by the Board of Directors of Triton Cayman, the
Reorganization will become effective (the "Effective Time") at the close of
business on the date that an appropriate certificate of merger is filed with the
Delaware Secretary of State as required by Delaware law or at such later time as
is specified in such certificate of merger. Triton Delaware anticipates that the
Reorganization will become effective promptly following the Special Meeting.
Immediately following the Effective Time of the Reorganization, Triton
Cayman will have the same subsidiaries and affiliates and the same directors and
executive officers as Triton Delaware had immediately prior to such date. See
"Pro Forma Financial Information."
RIGHTS OF DISSENTING STOCKHOLDERS
Pursuant to Section 262 of the DGCL, the holders of Triton Delaware Common
Stock do not have "dissenters appraisal rights" in connection with the
Reorganization because, among other reasons, such shares are listed on a
national securities exchange. Record holders of Convertible Preferred Stock of
Triton Delaware, although not entitled to vote in connection with the Merger
under Delaware law, are entitled to appraisal rights under Section 262 of the
DGCL in connection with the Merger subject to compliance with the procedures set
forth in Section 262 of the DGCL in connection with the Merger.
45
<PAGE>
EXCHANGE OF SHARE CERTIFICATES
As of the Effective Time of the Reorganization, the stockholders of Triton
Delaware prior to the Effective Time (other than those stockholders who receive
Equity Units) will automatically become the owners of Class A Shares and, as of
the Effective Time, will cease to be owners of Triton Delaware Common Stock.
Stock certificates representing Triton Delaware Common Stock will, at the
Effective Time, automatically represent Class A Shares. Stockholders of Triton
Delaware Common Stock will not be required to exchange their stock certificates
as a result of the Reorganization. Should a stockholder desire to sell some or
all of his Class A Shares after the Effective Time, delivery of the stock
certificate or certificates which previously represented shares of Triton
Delaware Common Stock will be sufficient.
Following the Reorganization, certificates bearing the name of Triton Cayman
will be issued in the normal course upon surrender of outstanding Triton
Delaware Common Stock certificates for transfer or exchange. If any stockholder
surrenders a certificate representing shares of Triton Delaware Common Stock for
exchange or transfer and the new certificate to be issued is to be issued in a
name other than that appearing on the surrendered certificate theretofore
representing the Triton Delaware Common Stock, it will be a condition to such
exchange or transfer that the surrendered certificate be properly endorsed and
otherwise be in proper form for transfer and that the person requesting such
exchange or transfer either (i) pay Triton Cayman or its agents any taxes or
other governmental charges required by reason of the issuance of a certificate
registered in a name other than that appearing on the surrendered certificate or
(ii) establish to the satisfaction of Triton Cayman or its agents that such
taxes or other governmental charges have been paid.
ODD-LOT PROGRAM
On a date as soon as practicable after this Proxy Statement/Prospectus is
mailed to stockholders (the "Mailing Date"), Triton Delaware will mail to each
stockholder who holds fewer than 100 shares of Triton Delaware Common Stock
information with respect to, and a form for use in connection with, the Odd-Lot
Program. Pursuant to the terms of the Odd-Lot Program, each holder of Triton
Delaware Common Stock who holds fewer than 100 shares thereof and elects to
participate in the Odd-Lot Program may instruct the Exchange Agent, acting as
the agent for such stockholder, to sell all, but not less than all, of such
stockholder's shares of Triton Delaware Common Stock on the NYSE for its account
for cash.
The Odd-Lot Program will commence shortly after the Mailing Date and remain
open until the business day prior to the Special Meeting. A stockholder selling
shares of Triton Delaware Common Stock under the Odd-Lot Program will receive
the weighted average price for all shares of Triton Delaware Common Stock sold
under the Odd-Lot Program in open market transactions on the day the
participant's sale occurs, less a small fee to cover administrative fees and
brokerage transactions. Triton Delaware will not solicit or make any
recommendations to stockholders to sell shares of Triton Delaware Common Stock
in the Odd-Lot Program. See "Certain Tax Considerations" for a discussion of the
federal income tax treatment of the sale of shares in the Odd-Lot Program.
STOCK COMPENSATION PLANS
If the Reorganization is consummated, Triton Delaware's stock option plans
(including the Amended and Restated 1992 Stock Option Plan) will be amended to
provide that Class A Shares will thereafter be issued by Triton Cayman upon
exercise of any options issued thereunder. The retirement, restricted stock,
convertible debenture and other employee benefit plans of Triton Delaware will
be similarly revised or amended, as necessary.
Stockholder approval of the Merger Agreement will also constitute
stockholder approval of amendments to the stock option, restricted stock,
convertible debenture and other employee benefit plans providing for future use
of Class A Shares in lieu of Triton Delaware Common Stock thereunder.
46
<PAGE>
SHAREHOLDER RIGHTS PLAN
Under the Shareholder Rights Plan of Triton Delaware, dated as of May 22,
1995 (the "Shareholders Rights Plan"), between Triton Delaware and Chemical
Bank, as Rights Agent, preferred stock purchase rights were issued to holders of
Triton Delaware's Common Stock at the rate of one right for each share of Triton
Delaware Common Stock. The Shareholder Rights Plan will be amended to provide
that the existing rights will expire immediately prior to the Effective Time.
Triton Cayman will adopt a Shareholder Rights Plan pursuant to which
preference share purchase rights will be issued to holders of Class A Shares and
Class B Shares at the rate of one right for each share in connection with the
Merger. See "Description of Authorized Shares of Triton Cayman -- Preference
Share Purchase Rights."
STOCK EXCHANGE LISTING
There is currently no established public trading market for the Class A
Shares or the Unit Depositary Shares. Immediately following the Reorganization,
the Class A Shares will be listed on the NYSE under the symbol "OIL," the same
symbol under which the Triton Delaware Common Stock is currently listed.
Application has been made to list the Unit Depositary Shares on the NYSE under
the symbol "OIL.B".
ACCOUNTING TREATMENT OF THE REORGANIZATION
The acquisition by Triton Cayman of Triton Delaware in connection with the
Reorganization will be accounted for as a combination of entities under common
control (as if it were a pooling of interests).
TRANSFER OF ASSETS
Following the Reorganization, Triton Delaware intends to transfer to Triton
Cayman substantially all of its businesses and subsidiaries located outside of
the United States, other than Triton Delaware's interests in the Cusiana and
Cupiagua fields in Colombia. Such actions will not require the approval of the
stockholders of Triton Delaware. See "Pro Forma Financial Information."
CERTAIN TAX CONSIDERATIONS
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences generally applicable to holders of Triton Delaware Common Stock and
Convertible Preferred Stock of the Reorganization, and of the ownership of
Triton Delaware Preferred Stock, Class B Shares, Class A Shares and Convertible
Preference Shares. The discussion contained in this Proxy Statement/Prospectus
is based on the law in effect as of the date of this Proxy Statement/Prospectus.
Triton Delaware will receive opinions at the Effective Time from Simpson Thacher
& Bartlett and Weil, Gotshal & Manges LLP ("Special Tax Counsel") reaffirming as
of such date certain opinions set forth in this Proxy Statement/Prospectus. In
delivering their opinions Special Tax Counsel will receive and rely upon certain
representations from Triton Delaware, and certain other information, data,
documentation and other materials as Special Tax Counsel deem necessary. There
are no regulations, published rulings or judicial decisions directly on point
with respect to certain aspects of the Reorganization and the securities to be
issued pursuant thereto. Accordingly, Special Tax Counsel are unable to reach an
unqualified conclusion on certain matters as indicated below. Opinions of
counsel are not binding upon either the IRS or the courts. Triton Delaware does
not intend to request a ruling from the IRS with respect to the Reorganization.
This summary does not address the tax treatment of the Reorganization under
applicable state, local, foreign or other tax laws. Stockholders are urged to
consult their own tax advisors as to the particular tax consequences to them of
the Reorganization. For purposes of this discussion, a "U.S. Holder" is any
stockholder that is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. A Non-U.S. Holder is any
47
<PAGE>
stockholder other than a U.S. Holder. The discussion below assumes that the
Triton Delaware Common Stock, Triton Delaware Preferred Stock and Convertible
Preferred Stock exchanged in the Reorganization are held as capital assets.
THE REORGANIZATION
RECEIPT OF CLASS A SHARES
Pursuant to Section 367(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and recently issued temporary Treasury Regulations promulgated
thereunder, U.S. Holders exchanging their Triton Delaware Common Stock for Class
A Shares will recognize gain, if any, but not loss on the transaction. In
general, for United States federal income tax purposes, a U.S. Holder will
recognize gain equal to the excess of the fair market value of the Class A
Shares received by the holder pursuant to the Reorganization over the holder's
aggregate adjusted basis in the Triton Delaware Common Stock exchanged therefor.
Any such gain will be capital gain and will be long-term if, as of the date of
the Reorganization, the Triton Delaware Common Stock was held for more than one
year. In such event (i) the basis of such Class A Shares will be equal to the
basis of the Triton Delaware Common Stock exchanged therefor increased by any
gain recognized as a result of the Reorganization and (ii) the holding period of
the Class A Shares will commence on the day after the date of the Reorganization
(except in the case of holders realizing a loss on the exchange whose holding
period will include, the period such holders held their Triton Delaware Common
Stock). Subject to certain exceptions, holders that are Non-U.S. Holders will be
subject to U.S. federal income tax on gain realized, if any, on the exchange of
Triton Delaware Common Stock for Class A Shares only if such gain is effectively
connected with the conduct of a trade or business in the United States or, in
the case of a Non-U.S. Holder, that is an individual who holds the Triton
Delaware Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year and certain other conditions
apply.
EQUITY UNIT ELECTION
The tax consequences of the Reorganization to U.S. Holders who make an
Equity Unit Election will depend in part upon whether the Triton Delaware
Preferred Stock received from Triton Delaware in the Reorganization is treated
as stock of Triton Delaware for U.S. tax purposes. Special Tax Counsel are of
the opinion that it is more likely than not that the Triton Delaware Preferred
Stock will be treated as stock of Triton Delaware. However, in view of the
absence of any authority dealing with transactions similar to the Reorganization
or securities of a type similar to the Equity Units, there is significant
uncertainty regarding this conclusion and no assurance can be given that the IRS
or the courts will agree. Special Tax Counsel have reached this conclusion
based, among other things, on the liquidation preference, the right to share in
dividends and the voting rights attached to the Triton Delaware Preferred Stock.
Assuming the Triton Delaware Preferred Stock is treated as stock of Triton
Delaware issued by Triton Delaware in exchange for Triton Delaware Common Stock
then (A)(i) no gain or loss would be recognized by exchanging stockholders with
respect to the receipt of the Triton Delaware Preferred Stock, (ii) the tax
basis of the Triton Delaware Preferred Stock will be the same as the tax basis
of the Triton Delaware Common Stock treated as exchanged therefor; and (iii) the
holding period of the Triton Delaware Preferred Stock received by the electing
stockholders will include the holding period of the shares of Triton Delaware
Common Stock treated as exchanged therefor and (B) pursuant to Section 367(a) of
the Code and applicable Treasury Regulations U.S. Holders will recognize gain
(but not loss) in an amount equal to the excess of the fair market value of the
Class B Shares received by the holder pursuant to the Reorganization over the
holder's aggregate adjusted tax basis in the Triton Delaware Common Stock
treated as exchanged therefor. Any such gain will be capital gain and will be
long-term if, as of the date of the Reorganization, the Triton Delaware Common
Stock was held for more than one year. In such event, (i) the basis of such
Class B Shares will be equal to the basis of the Triton Delaware Common Stock
treated as exchanged therefor increased by any gain recognized as a result of
the receipt of Class B Shares and (ii) the holding period of the Class B Shares
will commence on the day after the date of the Reorganization (except in the
case of holders realizing a loss on the exchange whose holding period will
include the period such holders
48
<PAGE>
held their Triton Delaware Common Stock). Non-U.S. Holders will not generally be
subject to U.S. federal income tax on gain realized as a result of the
Reorganization except in the circumstances described above for non-U.S. Holders
receiving Class A Shares. See "Receipt of Class A Shares".
Based upon the advice of Lehman and J.P. Morgan, Triton Delaware believes
that, on the date of this Proxy Statement/Prospectus, the fair market value of a
Class B Share would be approximately $ and the fair market value of
one-tenth of one share of Triton Delaware Preferred Stock would be approximately
$ based upon the closing price of the Triton Delaware Common Stock on the
NYSE Composite Transactions Tape on , 1996 of $ . Triton
Delaware will provide stockholders making an Equity Unit Election with
confirmation of Lehman's and J.P. Morgan's estimate of the fair market value of
one-tenth of one share of Triton Delaware Preferred Stock and the Class B Share
as of the date of the Reorganization. However, the IRS is not bound by such
valuations and no assurance can be given that the IRS will agree with them. If
the IRS were to successfully assert, for example, that the fair market value of
the Class B Shares was greater than the valuation, stockholders making the
Equity Unit Election and filing their tax return on the basis of such valuation
would be subject to tax based on the higher valuation of the Class B Shares.
The Merger Agreement provides (and by making an Equity Unit Election
stockholders will agree with Triton Delaware and Triton Cayman) that, with
respect to stockholders exchanging Triton Delaware Common Stock for Equity
Units, a portion of each such stockholder's Triton Delaware Common Stock so
exchanged in the Reorganization will be transferred to Triton Delaware as
consideration for the issuance of the Triton Delaware Preferred Stock and the
remaining portion of the Triton Delaware Common Stock so exchanged by each such
stockholder in the Reorganization will be transferred to Triton Cayman as
consideration for the issuance by Triton Cayman of the Class B Shares. Such
allocation shall be determined based on the respective fair market values of the
Triton Delaware Preferred Stock and the Class B Shares as estimated by Triton
Delaware on the date of the Reorganization. No assurance can be given that such
allocation will be respected by the IRS.
The IRS may assert that the Triton Delaware Preferred Stock should be
treated as stock of Triton Cayman and was received as taxable consideration in
the Reorganization. In that case, (i) the entire fair market value of the Equity
Units would be taken into account in determining the gain recognized (rather
than just the portion of such value attributable to the Class B Share), if any,
in the Reorganization, (ii) the basis of such Equity Units would equal the basis
of the shares of Triton Delaware Common Stock exchanged therefor increased by
any gain recognized as a result of the receipt of such Equity Unit and (iii) the
holding period of the Equity Units would commence on the day after the date of
the Reorganization (except in the case of holders realizing a loss in the
Reorganization whose holding period would include the period such holders held
their Triton Delaware Common Stock). As discussed above, Special Tax Counsel are
of the opinion that it is more likely than not that the Triton Delaware
Preferred Stock will be treated as stock of Triton Delaware. Nonetheless Special
Tax Counsel have advised Triton Delaware that there is significant uncertainty
concerning this conclusion and in view of the lack of authority on transactions
of this nature no assurance can be given that the IRS will not seek to treat the
Triton Delaware Preferred Stock as stock of Triton Cayman or to recharacterize
the transaction in some other manner which would result in additional income or
gain being realized by U.S. Holders making the Equity Unit Election. U.S.
Holders are urged to consult with their own tax advisors concerning the
consequences of making an Equity Unit Election.
Owners of the Unit Depositary Shares will be treated for U.S. federal income
tax purposes as if they were owners of the Triton Delaware Preferred Stock and
Class B Shares represented by such Unit Depositary Shares. Accordingly, such
owners will be entitled to take into account for U.S. federal income tax
purposes income and deductions to which they would be entitled if they were
direct holders of such Triton Delaware Preferred Stock and Class B Shares.
CERTAIN PROPOSED LEGISLATION
Legislation has recently been proposed which could affect the tax treatment
of the Reorganization. In particular, holders who make an Equity Unit Election
should note that the President has
49
<PAGE>
proposed that certain "disqualified preferred stock" will generally no longer be
permitted to be received as tax free consideration in corporate reorganizations
occurring after December 7, 1995. Although the Triton Delaware Preferred Stock
does not appear to constitute "disqualified preferred stock" within the meaning
of the President's proposal because (among other things) of its participation
rights, no assurance can be given that the proposal will not be altered so as to
become applicable to the Triton Delaware Preferred Stock. In such case, holders
who make an Equity Unit Election would be subject to tax with respect to the
entire value of the Equity Unit and not just the value attributable to the Class
B Share.
RECEIPT OF CONVERTIBLE PREFERENCE SHARES
The receipt of Convertible Preference Shares in exchange for Convertible
Preferred Stock in the Reorganization by U.S. Holders will be a taxable
transaction in which U.S. Holders of Convertible Preferred Stock will recognize
gain, if any, (but not loss) in an amount equal to the excess of the fair market
value of the Convertible Preference Shares received in the Reorganization over
their tax basis in the Convertible Preferred Stock exchanged therefor. Such gain
will be capital gain and will be long term if as of the date of the
Reorganization the Convertible Preferred Stock was held for more than one year.
In such event (i) the basis of such Convertible Preference Shares will equal the
basis of the Convertible Preferred Stock exchanged therefor increased by any
gain recognized as a result of the receipt of the Convertible Preference Shares
in the Reorganization and (ii) the holding period of the Convertible Preference
Shares will begin on the day after the date of the Reorganization (except in the
case of holders realizing a loss in the Reorganization whose holding period
would include the period such holders held their Convertible Preferred Stock).
U.S. Holders of Convertible Preferred Stock who exercise their dissenters rights
and receive cash in exchange for their Convertible Preferred Stock will
recognize gain or loss equal to the difference between the basis of the
Convertible Preferred Stock and the cash received in exchange therefor. Such
gain or loss will be capital gain or loss and will be long term if as of the
date of the Reorganization the Convertible Preferred Stock was held for more
than one year.
Non-U.S. Holders of Convertible Preferred Stock will not generally be
subject to U.S. federal income tax upon the receipt of Convertible Preference
Shares or upon the exercise of dissenters rights except in the circumstances
described above for Non-U.S. Holders receiving Class A Shares. See "Receipt of
Class A Shares."
Holders of Convertible Preferred Stock that also hold Triton Delaware Common
Stock may be subject to special rules and should consult with their own tax
advisors regarding the treatment to them of the receipt of Convertible
Preference Shares.
ODD LOT PROGRAM
U.S. Holders who exchange all of their Triton Delaware Common Stock for cash
pursuant to the Odd Lot program will recognize gain or loss equal to the
difference between the basis of the Triton Delaware Common Stock and the cash
received in exchange therefor. Such gain or loss will be capital gain or loss
and will be long term if, as of the date of the disposition, the Triton Delaware
Common Stock was held for more than one year. Non-U.S. Holders will not
generally be subject to U.S. federal income tax on gain realized, if any, on the
exchange of Triton Delaware Common Stock for cash except under the circumstances
described above for Non-U.S. Holders receiving Class A Shares. See "Receipt of
Class A Shares."
TRITON DELAWARE PREFERRED STOCK
DIVIDENDS ON PREFERRED STOCK
Assuming the Triton Delaware Preferred Stock is treated as stock of Triton
Delaware, dividends paid on the Triton Delaware Preferred Stock should be
taxable as ordinary income for U.S. federal income tax purposes to the extent of
Triton Delaware's earnings and profits for the year in which the dividends are
paid or Triton Delaware's earnings and profits accumulated in prior years. To
the extent amounts paid as dividends to a holder of shares of Triton Delaware
Preferred Stock are not paid out of
50
<PAGE>
Triton Delaware's current and accumulated earnings and profits, such amounts
will first be applied to reduce the holder's tax basis in the shares of Triton
Delaware Preferred Stock, and any amount in excess of tax basis will be treated
as gain from the sale or exchange of the shares of Triton Delaware Preferred
Stock.
In the case of corporate holders of shares of Triton Delaware Preferred
Stock the portion of the dividends paid from current or accumulated earnings and
profits should qualify, subject to the limitations under Sections 246(c) and
246A of the Code, for the 70% dividends received deduction. In addition, under
Section 1059 of the Code, a corporate holder of Triton Delaware Preferred Stock
may be required to reduce its tax basis in its shares of Triton Delaware
Preferred Stock by the portion of any dividend paid on the Triton Delaware
Preferred Stock that was not taxed because of the dividends received deduction
if such dividend constitutes an "extraordinary dividend".
UNITED STATES TAXATION OF NON-U.S. HOLDERS
Under present U.S. federal income and estate tax law, and subject to the
discussion below concerning backup withholding:
(a) Withholding of U.S. federal income tax will be required with respect
to the payment by Triton Delaware of dividends on Triton Delaware
Preferred Stock owned by a Non-U.S. Holder at a rate of 30%, or such lower
rate as may be specified by an applicable tax treaty. However, dividends
received by a Non-U.S. Holder which are effectively connected with the
conduct of a U.S. trade or business by the Non-U.S. Holder are exempt from
such withholding. However, such dividends will be subject to regular federal
income tax.
(b) No withholding of U.S. federal income tax will be required with
respect to any gain or income realized by a Non-U.S. Holder upon the
sale or exchange of Triton Delaware Preferred Stock unless (i) such gain is
effectively connected with the conduct of a U.S. trade or business by the
Non-U.S. Holder, (ii) the Non-U.S. Holder is an individual who is present in
the U.S. for a period aggregating 183 days or more during the calendar year
in which such sale occurs and certain other conditions are met or (iii)
Triton Delaware is or has been a "United States real property holding
corporation" for federal income tax purposes (Triton Delaware believes it is
not and has not been a "United States real property holding corporation");
and
(c) Triton Delaware Preferred Stock owned by an individual who at the
time of death is a Non-U.S. Holder will be included in such Non-U.S.
Holder's gross estate for U.S. federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise.
Under current U.S. Treasury Regulations, dividends paid to an address
outside the United States are presumed to be paid to a resident of such country
for purposes of the withholding discussed above and, under the current
interpretation of U.S. Treasury Regulations, for purposes of determining the
applicability of a tax treaty rate. However, under proposed U.S. Treasury
Regulations not currently in effect, a Non-U.S. Holder who wishes to claim a
reduced rate of withholding would be required to provide Triton Delaware with a
properly executed (1) Internal Revenue Service Form 1001 (or successor form)
claiming a reduced rate of withholding under the benefit of a tax treaty or (2)
Internal Revenue Form 4224 (or successor form) stating that dividends paid on
the Triton Delaware Preferred Stock are not subject to withholding tax because
it is effectively connected with the Non-U.S. Holder's conduct of a trade or
business in the United States.
CLASS A AND CLASS B SHARES AND CONVERTIBLE PREFERENCE SHARES
UNITED STATES FEDERAL INCOME TAXATION OF DIVIDENDS
For U.S. federal income tax purposes, the gross amount of dividends paid by
Triton Cayman to U.S. Holders will be treated as foreign source dividend income
to the extent paid out of Triton Cayman's current or accumulated earnings and
profits. These dividends will not be eligible for the dividends received
deduction generally allowed to U.S. corporate shareholders on dividends from
U.S. domestic corporations. To the extent that an amount received by a U.S.
Holder exceeds the allocable
51
<PAGE>
share of Triton Cayman's current and accumulated earnings and profits, such
excess will be applied first to reduce such U.S. Holder's tax basis in its
shares and then, to the extent in excess of such U.S. Holder's tax basis, such
excess will constitute gain from a deemed sale or exchange of such shares. For
U.S. foreign tax credit purposes, dividends on the shares will generally
constitute "passive income", or, in the case of certain U.S. Holders, "financial
services income."
Certain adjustments (or failures to make adjustments) of the conversion rate
of Convertible Preference Shares, based on Triton Cayman's issuance of certain
rights, warrants, indebtedness, securities or other assets to holders of
Ordinary Shares, may result in constructive distributions taxable as dividends
to holders of Convertible Preference Shares or to holders of Ordinary Shares.
Moreover, depending upon the circumstances, the payment of certain stock
dividends to U.S. Holders of Ordinary Shares may be treated as taxable
dividends.
CONVERSION OF CLASS B SHARES
If Triton Delaware liquidates, is dissolved or wound up, the Board of
Directors of Triton Cayman may cause the Class B Shares to be converted into
Class A Shares. Such conversion should not result in gain or loss to the holders
of the Class B Shares.
UNITED STATES TAXATION OF NON-U.S. HOLDERS
Subject to certain exceptions, Non-U.S. Holders will be subject to U.S.
federal income tax on dividend distributions with respect to, and gain realized
from the sale or exchange of, Class A Shares, Class B Shares or Convertible
Preference Shares only if such dividends or gains are effectively connected with
the conduct of a trade or business within the United States or in the case of
gains realized by Non-U.S. Holders that are individuals, such holders hold their
Class A Shares, Class B Shares or Convertible Preference Shares as capital
assets, are present in the United States for 183 days or more during the taxable
year of the sale and certain other conditions exist. Except as discussed below
with respect to backup withholding, dividends paid by Triton Cayman will not be
subject to U.S. withholding tax. Nonresident alien individuals will not be
subject to U.S. estate tax with respect to shares of Triton Cayman.
EXCHANGE OF EQUITY UNITS
An exchange of Equity Units with Triton Cayman or Triton Delaware for cash
will be a taxable transaction for U.S. federal income tax purposes.
Consequently, U.S. Holders will be required to recognize gain or loss in an
amount equal to the difference between the cash proceeds received in the
exchange and the holder's adjusted tax basis in its Equity Units so exchanged.
Such gain or loss will be capital gain or loss and will be long term, if as of
the date of the disposition, the Equity Unit was held for more than one year.
U.S. Holders exchanging Equity Units for Ordinary Shares of Triton Cayman will
be treated as though they had received such Ordinary Shares of Triton Cayman in
exchange for an allocable portion of the Triton Delaware Preferred Stock and
Class B Shares. Except possibly as described below, the part of the exchange
attributable to the Triton Delaware Preferred Stock will be treated as a taxable
transaction. U.S. Holders will recognize gain or loss equal to the difference
between the fair market value of the Ordinary Shares of Triton Cayman treated as
received in exchange for the Triton Delaware Preferred Stock and the basis of
such Triton Delaware Preferred Stock. In such event (i) the basis of such
Ordinary Shares of Triton Cayman will be equal to their fair market value and
(ii) the holding period for such Ordinary Shares of Triton Cayman will commence
on the day after the date of the exchange.
No gain or loss will be recognized by U.S. Holders with respect to Ordinary
Shares of Triton Cayman treated as exchanged for Class B Shares. As a result,
U.S. Holders will have (i) a basis in such Ordinary Shares of Triton Cayman
equal to the basis of the Class B Shares treated as exchanged therefor and (ii)
the holding period of such Ordinary Shares of Triton Cayman will include the
holding period of such Class B Shares.
It is possible that the exercise by Triton Cayman of its right to purchase
the Equity Units in exchange for Ordinary Shares of Triton Cayman could qualify
as a tax-free reorganization (in whole,
52
<PAGE>
rather than in part) notwithstanding the provisions of Section 367(a) and
applicable Treasury Regulations. In such case, (i) no gain or loss would be
recognized by U.S. Holders exchanging Equity Units solely for Ordinary Shares of
Triton Cayman, (ii) the tax basis of Ordinary Shares of Triton Cayman received
in the exchange will be the same as the Equity Units exchanged therefor and
(iii) the holding period of the Ordinary Shares of Triton Cayman received in the
exchange will include the holding period of the Equity Units exchanged therefor.
CLASSIFICATION OF TRITON CAYMAN AS A CONTROLLED FOREIGN CORPORATION
Under Section 951(a) of the Code, each "United States shareholder" of a
"controlled foreign corporation" ("CFC") must include in its gross income for
U.S. federal income tax purposes its pro rata share of the CFC's "subpart F
income," even if the subpart F income is not distributed. In addition, gain on
the sale of stock in a CFC realized by a United States shareholder is treated as
ordinary income to the extent of the CFC's accumulated undistributed earnings
and profits. Section 951(b) of the Code defines a United States shareholder
("U.S. Shareholder") as any U.S. corporation, citizen, resident or other U.S.
person who owns (directly or through certain deemed ownership rules) 10% or more
of the total combined voting power of all classes of stock of a foreign
corporation. In general, a foreign corporation is treated as a CFC only if such
U.S. Shareholders collectively own more than 50% of the total combined voting
power or total value of the corporation's stock. Under these rules Triton Cayman
does not expect to be a CFC. While it is possible that Triton Cayman could in
the future be treated as a CFC, so long as a shareholder of Triton Cayman is not
a U.S. Shareholder, Triton Cayman's status as a CFC should have no adverse
effect on such holder.
PASSIVE FOREIGN INVESTMENT COMPANIES
Sections 1291 through 1297 of the Code contain special rules applicable with
respect to foreign corporations that are "passive foreign investment companies"
("PFICs"). In general, a foreign corporation will be a PFIC if 75% or more of
its income constitutes "passive income" or 50% or more of its assets produce
passive income. If Triton Cayman were to be characterized as a PFIC, a U.S.
Holder would be subject to a penalty tax at the time of its sale of (or receipt
of an "excess distribution" with respect to) its shares. Moreover any such gain
on the sale of shares would be taxable as ordinary income. In general, a
shareholder receives an "excess distribution" if the amount of the distribution
is more than 125% of the average distribution with respect to the stock during
the three preceding taxable years (or the taxpayer's holding period if it is
less than 3 years). In general, the penalty tax is equivalent to an interest
charge on taxes that are deemed due during the taxpayer's holding period but not
paid, computed by assuming that the excess distribution or gain (in the case of
a sale) with respect to the shares was realized ratably over the holder's
holding period. The interest charge is equal to the applicable rate imposed on
underpayments of U.S. federal income tax for such period.
The PFIC statutory provisions contain a look-through rule that states that,
for purposes of determining whether a foreign corporation is a PFIC, such
foreign corporation shall be treated as if it "received directly its
proportionate share of the income" and as if it "held its proportionate share of
the assets" of any other corporation in which it owns at least 25% of the stock.
Under the look-through rule Triton Cayman would be deemed to own the assets and
to have received the income of its subsidiaries directly for the purposes of
determining whether Triton Cayman will be treated as a PFIC. As a result, Triton
Cayman does not expect to be treated as a PFIC.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A U.S. Holder is required to file an information return on IRS Form 926 with
such holder's U.S. Federal income tax return for the year of the Reorganization.
Form 926 requires, among other things, a description of the transaction
including the fair market value of the consideration received.
A holder may be subject to backup withholding under Section 3406 of the Code
at a rate of 31% on payments made with respect to, or cash proceeds of a sale or
exchange of, the Triton Delaware Preferred Stock and Ordinary Shares. Backup
withholding will apply only if the holder (i) fails to furnish its Taxpayer
Identification Number ("TIN"), which for an individual would be his or her
social security number, (ii) furnishes an incorrect TIN, (iii) is notified by
the IRS that it has failed to
53
<PAGE>
properly report payments of interest and dividends or (iv) under certain
circumstances, fails to certify, under penalties of perjury, that it has
furnished a correct TIN and has not been notified by the IRS that it is subject
to backup withholding for failure to report interest and dividend payments.
Backup withholding will not apply with resect to payments made to certain exempt
recipients, such as corporations, tax-exempt organizations and foreign persons
receiving payments that are subject to withholding under Section 1441 or Section
1442 of the Code or that would be subject to such withholding but for the
provisions of a treaty or certain other exceptions.
The amount of any backup withholding from a payment to a holder are allowed
as a credit against such holder's federal income tax liability and may entitle
such holder to a refund, provided that the required information is furnished to
the IRS.
POST-REORGANIZATION TAXATION OF TRITON CAYMAN AND TRITON DELAWARE
All of Triton Delaware's foreign subsidiaries are presently CFCs. As
discussed above, under subpart F of the Code, a CFC is a foreign corporation
that is owned (directly, indirectly or by attribution) more than fifty percent
(50%), by vote or by value, by U.S. shareholders. In the event that a foreign
corporation is a CFC, a U.S. Shareholder of the CFC must include in income in
its taxable year in which or with which the taxable year of the CFC ends, the
total of, among other things, (i) its pro rata share of the CFC's subpart F
income for such taxable year, (ii) its pro rata share of the CFC's increase in
earnings invested in United States property for such year and (iii) its pro rata
share of the lesser of the CFC's earnings and profits accumulated in taxable
years beginning after September 30, 1993 or the amount of the CFC's passive
assets in excess of twenty-five percent (25%) of total assets, computed on the
basis of treating all CFC's commonly owned, directly or indirectly, by a more
than fifty percent (50%) CFC parent as a single CFC. Thus, immediately prior to
the Reorganization, Triton Delaware is, and has been, subject to the deemed
income inclusion provisions described above as the only United States
shareholder of Triton Delaware's foreign subsidiaries. After the Reorganization,
Triton Delaware will continue to be subject to the deemed inclusion provisions
with respect to any foreign subsidiaries that continue to be owned by Triton
Delaware and Triton Cayman will not be subject to any deemed income inclusion
with respect to its other direct or indirect subsidiaries.
CAYMAN ISLANDS TAX CONSEQUENCES
At the present time there is no Cayman Islands income or profits tax,
withholding tax, capital gains tax, capital transfer tax, estate duty or
inheritance tax payable by a Cayman Islands company or its shareholders, other
than shareholders resident in the Cayman Islands. Triton Cayman will obtain
prior to the consummation of the Reorganization an assurance from the Minister
of Finance of the Cayman Islands under the Tax Concessions Law (Revised) that,
in the event that any legislation is enacted in the Cayman Islands imposing tax
computed on profits or income, or computed on any capital assets, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax, such
tax shall not until October 31, 2015 be applicable to Triton Cayman or to any of
its operations or to the shares, debentures or other obligations of Triton
Cayman except insofar as such tax applies to persons ordinarily resident in the
Cayman Islands and holding such shares, debentures or other obligations of
Triton Cayman or any land leased or let to Triton Cayman. Therefore, there will
be no Cayman Islands tax consequences with respect to the Reorganization or with
respect to subsequent distributions in respect of the Shares.
DESCRIPTION OF AUTHORIZED SHARES OF TRITON CAYMAN
The following statements with respect to Triton Cayman's capital stock are
subject to the detailed provisions of Triton Cayman's Articles of Association
(the "Articles of Association"), its Memorandum of Association (the "Memorandum
of Association"), the resolutions with respect to the Preference Shares (the
"Resolutions"), and the Preferred Stock Preference Rights created pursuant to
the Rights Agreement to be entered into between Triton Cayman and Chemical Bank,
as Rights Agent (the "Rights Agreement"). These statements do not purport to be
complete and, while Triton Cayman believes the descriptions of the material
provisions of the Articles of Association, Memorandum of
54
<PAGE>
Association, Resolutions and Rights Agreement contained in this Proxy
Statement/Prospectus are accurate statements with respect to such material
provisions, such statements are subject to the detailed provisions in the
Articles of Association, Memorandum of Association, Resolutions and Rights
Agreement to which reference is hereby made for a full description of such
provisions.
ORDINARY SHARES; GENERAL
The Articles of Association provide that the authorized capital stock of
Triton Cayman is divided into 200,000,000 Class A Shares, 10,000,000 Class B
Shares, 10,000,000 class C ordinary shares, par value $.01 per share (the "Class
C Shares"), and 20,000,000 preference shares. The Class A Shares, the Class B
Shares and the Class C Shares rank pari passu in all respects and have equal
voting and other rights, except as set forth in the Articles of Association. For
purposes of the discussion under "Description of Authorized Shares of Triton
Cayman," the term "Ordinary Shares" includes Class A Shares, Class B Shares and
Class C Shares.
As described under "The Reorganization-Equity Unit Election," at the
Effective Time, subject to the Equity Unit Limitation, each Equity Unit
exchanged for an Electing Share will be comprised of one Class B Share and
one-tenth of one share of Triton Delaware Preferred Stock, which securities will
be paired and will not be separately transferable. The aggregate number of Class
B Shares issuable will be the aggregate number of Equity Units for which shares
of Triton Delaware Common Stock are exchanged in the Merger. As described below,
one Class A Share is designed to generally have economic rights substantially
equivalent to the rights of the securities included in an Equity Unit,
considered as a whole, except that, among other things, the holders of Equity
Units, as a result of their ownership of the Triton Delaware Preferred Stock
component of the Equity Units, are entitled to certain liquidation preferences
and dividend and voting and other rights with respect to Triton Delaware (see
"Description of Triton Delaware Preferred Stock") and the holders of Class A
Shares are entitled to certain additional rights over the holders of Class B
Shares with respect to Triton Cayman. See "Dividend Rights," "Purchase of Equity
Unit," "Liquidation of Triton Delaware" and "Liquidation of Triton Cayman"
below.
The rights of holders of Class B Shares have been specifically designed to
permit such shares to be paired with and only transferable with one-tenth of one
share of Triton Delaware Preferred Stock in the form of an Equity Unit that is
to be distributed only in connection with the Merger to holders electing to
receive such consideration. Accordingly, it is not intended that there be, and
the Articles of Association do not permit, any further issuances of Class B
Shares, or any security convertible into or exchangeable for any Class B Shares
or any option or right of subscription to acquire any Class B Shares, except in
connection with a stock dividend or stock split of Class B Shares. It is
intended that Class A Shares will be available for future issuances of equity
securities, if any, required by Triton Cayman to raise capital, in connection
with acquisitions or otherwise. Accordingly, the Articles of Association provide
for a greater number of Class A Shares to be authorized than Class B Shares.
Moreover, because there will be no separate trading market for the Class B
Shares and because the Class B Shares are not intended to be transferable
independently of the shares of Triton Delaware Preferred Stock, any stock
dividend of Class B Shares or any Class B Shares resulting from a consolidation
or subdivision of the capital of Triton Cayman will be included in an Equity
Unit. Pursuant to the Articles of Association, the number of Class B Shares
included in an Equity Unit may be adjusted from time to time to take account of
such events; PROVIDED, HOWEVER, that the number of Class B Shares included in an
Equity Unit is required to be a whole number. One-tenth of one share of Triton
Delaware Preferred Stock will be included in an Equity Unit. The number of Class
B Shares included in an Equity Unit is hereinafter referred to as the "Pairing
Ratio." As of the Effective Time, the Pairing Ratio will be one.
It is intended that the Class C Shares will only be issued if (i) Triton
Cayman exercises its right to purchase the Equity Units as described under
"Description of Triton Delaware Preferred Stock - Purchase of Equity Units,"
(ii) Triton Cayman chooses to use ordinary shares rather than cash in connection
with such purchase and (iii) the Cumulative Dividend Amount (as hereinafter
defined) is a
55
<PAGE>
positive number. See "Purchase of Equity Unit." The holders of the Class C
Shares will be entitled to the same dividend rights, liquidation preferences and
voting and other rights as the holders of the Class A Shares described below,
except that they will be subject to certain preferential rights of the holders
of the Class A Shares. See "Dividend Rights" and "Liquidation of Triton Cayman"
below.
VOTING AND OTHER RIGHTS
Under the Articles of Association, the holders of Ordinary Shares will be
entitled to one vote for each share held on all matters submitted to
shareholders' meetings, including the election and removal of directors, and
will vote together as a single class with any voting preference shares unless
the terms of any voting preference shares otherwise provide. The Articles of
Association of Triton Cayman provide that the quorum required for a general
meeting of the shareholders is a majority of the outstanding Ordinary Shares
entitled to vote at such meeting. All matters voted upon at any duly held
shareholders' meeting shall be carried by a majority of the votes cast at the
meeting by shareholders represented in person or by proxy, except (i) election
of directors, who are elected by plurality vote, (ii) approval of a merger or a
similar arrangement, which, pursuant to Cayman Islands law, requires the
approval by 75% of the votes cast (but, in any event, under the Articles of
Association, at least a majority of the outstanding shares), and (iii) approval
of a Special Resolution (as defined below). See "Comparison of Rights of
Stockholders -- Stockholder Approval of Business Combinations." A change of
corporate name, the voluntary dissolution, liquidation or winding-up of the
affairs of Triton Cayman, a reduction of paid-up share capital, and any
amendment to Triton Cayman's Articles of Association or Memorandum of
Association require approval by a Special Resolution by the shareholders of
Triton Cayman. A Special Resolution requires the approval of at least two-thirds
of the votes cast by the shareholders represented in person or by proxy at a
duly convened meeting. The Board of Directors or the President may at any time
proceed to convene a general meeting of Triton Cayman. Triton Cayman must
provide at least 10 days' notice of a general meeting.
Because holders are not entitled to cumulate their votes, shareholders
holding a majority of the outstanding Ordinary Shares, voting together as a
class with the holders of any voting preference shares which may be issued, are
able to elect all members of the board of directors of Triton Cayman. The
Articles of Association of Triton Cayman provide that the directors are to be
elected in three classes of approximately equal number and for a term of three
years, with the result that shareholders will not vote for the election of a
majority of directors in any single year. Holders of Ordinary Shares have no
preemptive rights.
As the registered holder of the Class B Shares contained in the Equity
Units, pursuant to the Articles of Association, the Depositary will be entitled
to appoint one or more persons (who may be one or more holders of the Unit
Depositary Shares) to act as its representative at any general meeting of Triton
Cayman. Any person so authorized may attend, vote and speak at such meeting as
if he were an individual shareholder of Triton Cayman in respect of the number
of Class B Shares that he is authorized to represent. It is presently expected
that the Depositary will authorize each holder of a Unit Depositary Share to act
as its representative with respect to the number of Class B Shares included in
Equity Units represented by the Receipt of that holder. The Articles of
Association provide that whenever the capital stock of Triton Cayman is divided
into different classes of shares, the rights attached to any class may (unless
otherwise provided by the terms of issue of the shares of that class) be varied
only with the consent in writing of all holders of such class or pursuant to a
Special Resolution adopted at a separate meeting of such holders.
The Articles of Association further provide that, unless otherwise provided
by the rights attached to any shares, such rights will not be deemed to be
varied by the allotment of further shares which confer on the holders voting
rights more favorable than those conferred by such shares. Such rights will not
otherwise be deemed to be varied by the creation or issuance of further shares,
including any additional Class A Shares, Class B Shares or Class C Shares or
different classes of shares with preferential rights as to dividends or capital.
56
<PAGE>
There are no limitations on the right of nonresident shareholders to hold or
vote their Ordinary Shares imposed by Cayman Islands law or Triton Cayman's
Articles of Association.
SPECIAL RIGHTS UPON THE OCCURRENCE OF CERTAIN EVENTS
The Articles of Association provide that as long as the Class B Shares (or
Class C Shares) are outstanding, Triton Cayman shall not enter into any
agreement with another entity providing for the consolidation, merger,
amalgamation or other similar transaction of Triton Cayman and such other entity
if the consideration to be received by holders of the Equity Units per Equity
Unit or per share by holders of Class B Shares (or Class C Shares) (in each
case, less the amount due per Class A Share in respect of the Cumulative
Dividend Amount (as defined below) or the Liquidation Available Amount (as
defined below), as the case may be) is less than the consideration to be
received by holders of the Class A Shares per share in connection with such
consolidation, merger, amalgamation or other similar transaction, unless such
agreement shall have been approved by the holders of a majority of the Class B
Shares (or Class C Shares), voting separately as a class.
In addition, in the event that any person or group of persons (an "Offeror")
makes an offer to acquire the Class A Shares, and such Offeror either does not
offer to acquire the Equity Units or Class B Shares (or Class C Shares) or
offers to acquire the Equity Units or Class B Shares (or Class C Shares) for
less consideration on a per unit basis than that offered in respect of a Class A
Share (less the amount due per Class A Share in respect of the Cumulative
Dividend Amount or the Liquidation Available Amount, as the case may be), then
the Board of Directors of Triton Cayman shall not be permitted to redeem the
rights issued pursuant to the Rights Agreement. See "-- Preference Shares --
Preference Share Purchase Rights."
DIVIDEND RIGHTS
The holders of Ordinary Shares will be entitled at any time to receive such
dividends as are declared by the Board of Directors. The ability of Triton
Cayman to pay dividends on capital stock is restricted by covenants in
indentures to which Triton Cayman will be a party upon the consummation of the
Reorganization. Triton Cayman currently intends to retain earnings for use in
Triton Cayman's business and the financing of its capital requirements. The
payment of any future cash dividends is necessarily dependent upon the earnings
and financial needs of Triton Cayman, along with applicable legal and
contractual restrictions.
Aggregate dividends declared and paid on one Class A Share, if any, are
expected to be equivalent to the aggregate dividends declared and paid on
one-tenth of one share of Triton Delaware Preferred Stock and one Class B Share
included in one Equity Unit if any. The holders of the Equity Units, in their
capacity as holders of shares of Triton Delaware Preferred Stock, may receive
dividends at a time or times when no dividends are being declared or paid on the
Class A Shares or the Class B Shares. See "Description of Triton Delaware
Preferred Stock." Accordingly, the Articles of Association contain certain
provisions which regulate the relative amounts of any dividends which may be
declared or paid on the Class A Shares and the Class B Shares as described
below.
The holders of Class A Shares will be entitled, on the declaration of a
dividend, at any time, to a dividend on each Class A Share of an amount which
exceeds the amount of the dividend (if any) declared at the same time on a Class
B Share (or Class C Share), by an amount equal to (i) the Cumulative Dividend
Amount (as defined below) at such time divided by (ii) the Pairing Ratio at such
time, and to the extent of any such excess, a dividend may be declared at any
time on the Class A Shares even if no dividend is declared at the same time on
the Class B Shares (or Class C Shares). (Such provision is referred to
hereinafter as the "Dividend Provision".) The term "Cumulative Dividend Amount"
at any time is defined to mean the amount by which the aggregate of all
dividends declared on one-tenth of one share of Triton Delaware Preferred Stock
from the date of adoption of the Articles of Association up to and including the
time of determination exceeds the amount (if any) by which (x) the sum of the
products of the amount of each dividend declared on one Class A Share from the
date of adoption of the Articles of Association until immediately prior to the
time of determination and the Pairing Ratio in effect as of the date of its
declaration, exceeds (y) the sum of the products of
57
<PAGE>
the amount of each dividend declared on one Class B Share from the date of
adoption of the Articles of Association until immediately prior to the time of
determination and the Pairing Ratio in effect as of the date of its declaration.
For purposes of the Dividend Provision, dividends on shares of Triton Delaware
Preferred Stock are deemed to be declared when resolved to be declared on the
Triton Delaware Preferred Stock by Triton Delaware's Board of Directors.
Dividends on Class A Shares and Class B Shares are deemed to be declared when
the Board of Directors of Triton Cayman resolves to declare any dividend.
As a result of the Dividend Provision, for so long as the authorized capital
stock of Triton Cayman is divided into Class A Shares and Class B or Class C
Shares, if the Board of Directors of Triton Cayman determines to pay dividends
on the capital stock of Triton Cayman and dividends have been paid in prior
periods by Triton Delaware on the Triton Delaware Preferred Stock when no
corresponding dividend was paid on the Class A Shares, Triton Cayman may be
required to pay dividends on the Class A Shares when no or a lesser dividend is
being paid on the Class B Shares or Class C Shares or the shares of Triton
Delaware Preferred Stock included in an Equity Unit. The Dividend Provision does
not impute any interest component on dividends paid in earlier periods when
determining the appropriate allocation of dividends in any given subsequent
period.
PURCHASE OF EQUITY UNIT
In the event Triton Cayman or Triton Delaware purchases the Equity Units,
holders of Class A Shares are not entitled to any payment in respect of any
amounts paid in cash or Class A Shares or Class C Shares, as the case may be, as
the purchase price for the Equity Units. See "Description of Triton Delaware
Preferred Stock -- Purchase of Equity Units."
The Articles of Association provide that if an Equity Unit is purchased by
Triton Cayman or Triton Delaware, the Pairing Ratio will thereafter be deemed to
be the Pairing Ratio in effect on the date of such purchase, adjusted in
relation to any time thereafter in the case of a stock split, stock combination
or stock dividend after such time as if such purchase had not occurred.
In the event that the Equity Units are purchased at a time when the
Cumulative Dividend Amount is positive, and Class C Shares are issued as part of
the Purchase Price, at such time as the Cumulative Dividend Amount has been
reduced to zero, whether by means of cash or stock dividends to the holders of
Class A Shares, the Board may resolve that each Class C Share then outstanding
will be converted into one Class A Share.
LIQUIDATION OF TRITON DELAWARE
At any time after the liquidation, dissolution or winding-up of Triton
Delaware has been completed, the Board of Directors of Triton Cayman may in its
discretion determine (which determination shall be final and binding) that the
Class B Shares included in the Equity Units should be allowed to be transferred
separately. In addition, at any time after such liquidation, dissolution or
winding-up has been completed, the Board of Directors of Triton Cayman may
ascertain the product of (a) the sum of (i) the amount of the Liquidation
Preference, if any, paid in respect of one-tenth of one share of Triton Delaware
Preferred Stock plus the amount of any other distribution to the holders of
one-tenth of one share of Triton Delaware Preferred Stock in connection with the
liquidation, dissolution or winding-up and (ii) the Cumulative Dividend Amount
immediately preceding the time of application of the whole or any part of the
Liquidation Available Amount (as defined below) and (b) the number of Class A
Shares outstanding at such time divided by the Pairing Ratio at such time. Such
product at any time is referred to as the "Liquidation Available Amount" at such
time.
In any such event, the Board of Directors of Triton Cayman may, in its
discretion, at any time and from time to time, apply all or any part of any
Liquidation Available Amount to declare dividends in cash to the holders of the
Class A Shares and/or to pay stock dividends on the Class A Shares in each case
in accordance with the provisions described below. Any such cash or stock
dividend will reduce the then applicable Liquidation Available Amount by the
amount so applied (determined in accordance with the terms of the Articles of
Association) and the Cumulative Dividend Amount will be reduced correspondingly.
58
<PAGE>
If the Board of Directors of Triton Cayman determines at any time to utilize
all or any part of the then applicable Liquidation Available Amount for the
declaration of a stock dividend payable in Class A Shares to the holders of the
Class A Shares (any amount to be so utilized, the "Specified Amount"), the
aggregate number of additional Class A Shares to be so distributed will be
calculated by dividing the then applicable Specified Amount by the average of
the Closing Prices (as defined under "Description of Triton Delaware Preferred
Stock -- Purchase of Equity Unit") for the Class A Shares on the five
consecutive trading days immediately preceding the date on which the Board of
Directors of Triton Cayman announces its intention to declare such stock
dividend. Such stock dividend will be made to the holders of record of the Class
A Shares, on the date determined for such purpose by the Board, in the
proportions to which they would have been entitled had such sum been distributed
in cash.
The Board is not required to make any such distribution, but, to the extent
that it does, distributions in cash or stock dividends of additional Class A
Shares will be made to the holders of Class A Shares and not to the holders of
Class B Shares. In the event of any liquidation, dissolution or winding-up of
Triton Delaware, holders of the Equity Units, by virtue of holding one-tenth of
one share of Triton Delaware Preferred Stock included in each Equity Unit, will
be entitled to receive out of the assets of Triton Delaware available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of the common stock of Triton
Delaware or other junior stock, the Liquidation Preference.
The Articles of Association provide that if Triton Delaware is dissolved,
liquidated or wound up, the Pairing Ratio will thereafter be deemed to be the
Pairing Ratio in effect as of the date of completion of such liquidation,
dissolution or winding-up, as the case may be, adjusted in relation to any time
thereafter in the case of a stock split, stock combination or stock dividend
after such time as if such liquidation, dissolution or winding-up had not
occurred.
If Triton Delaware has been liquidated, dissolved or wound up and the
Liquidation Available Amount has been reduced to zero, whether by means of cash
or stock dividends to the holders of Class A Shares, the Board may resolve that
each Class B Share then outstanding will be converted into one Class A Share.
LIQUIDATION OF TRITON CAYMAN
The Articles of Association provide that before any amount is paid to the
holders of Class B Shares (or Class C Shares, if any) on a winding-up of Triton
Cayman, the holder of each Class A Share will be entitled to receive an amount
in respect of each Class A Share held by him equal to the aggregate of (a) the
amount of the Liquidation Preference paid, if any, in respect of one-tenth of
one share of Triton Delaware Preferred Stock plus the amount of any other
distribution to the holders of one-tenth of one share of Triton Delaware
Preferred Stock in connection with the liquidation dissolution or winding-up,
and (b) the Cumulative Dividend Amount as at the commencement of the winding-up
of Triton Cayman, each divided by the Pairing Ratio at such date. The holder of
a Class B Share (or Class C Share) will thereafter have the right to participate
in any assets of Triton Cayman PARI PASSU with the holder of a Class A Share.
The Articles of Association provide for an adjustment to the foregoing in the
event that the whole or any part of the Liquidation Available Amount has been
applied to the declaration of cash dividends on, or stock dividends in, Class A
Shares in the event of the prior liquidation of Triton Delaware (see
"Liquidation of Triton Delaware" above).
If, at the time of any such liquidation, the holder of Class A Shares or
Class B Shares has any outstanding debts, liabilities or engagements to or with
Triton Cayman (whether presently payable or not), either alone or jointly with
any other person, whether a shareholder or not (including, without limitation,
any liability associated with the unpaid purchase price of such Class A Shares
or Class B Shares), the liquidator appointed to oversee the liquidation of
Triton Cayman shall deduct from the amount payable in respect of such Class A
Shares or Class B Shares the aggregate amount of such debts, liabilities and
engagements and apply such amount to any of such holder's debts, liabilities or
engagements to or with Triton Cayman (whether presently payable or not). The
liquidator may
59
<PAGE>
distribute, in kind, to the holders of the Class A Shares or Class B Shares
remaining assets of Triton Cayman or may sell, transfer or otherwise dispose of
all or any part of such remaining assets to any other company, trust or entity
and receive payment therefor in cash, shares or obligations of such other
company, trust or entity or any combination thereof, and may sell all or any
part of the consideration so received, and may distribute the consideration
received or any balance or proceeds thereof to holders of the Class A Shares or
Class B Shares in accordance with the procedures set forth above.
CHANGES IN CAPITALIZATION
Triton Cayman may by Special Resolution (i) increase its capital stock by
new shares of such amounts as the resolution prescribes; (ii) consolidate and
divide all or any of its capital stock into shares of larger amount than its
existing shares (similar to a stock combination); (iii) subject to the
provisions of the Companies Act, sub-divide its shares or any of them, into
shares of smaller amount than is fixed by its Articles of Association and the
resolution may determine that, as between the shares resulting from the
sub-division, any of them may have any preference or advantage or restriction as
compared with the others (similar to a stock split); and (iv) cancel shares
which, at the date of the passing of the resolution, have not been taken or
agreed to be taken by any person and diminish the amount of its capital stock by
the amount of the shares so cancelled provided that, for as long as Triton
Cayman's capital stock is divided into Class A Shares and Class B Shares, no
consolidation or sub-division may be effected by Triton Cayman unless (a)
immediately following any consolidation or sub-division, the ratio of the number
of Class A Shares then outstanding to the number of Class B Shares then
outstanding is equal to such ratio immediately preceding such consolidation or
sub-division and (b) the effect thereof will result in an Equity Unit comprising
a whole number of Class B Shares and one-tenth of one share of Triton Delaware
Preferred Stock. All Class B Shares resulting from such consolidation or
sub-division will be thereafter included in Equity Units, resulting in a
corresponding adjustment in the Pairing Ratio.
DISTRIBUTIONS
The Articles of Association provide that, for as long as the capital stock
of Triton Cayman is divided into Class A Shares and Class B Shares or Class C
Shares, Triton Cayman will not (except for certain distributions provided for in
the Articles of Association) make any offer or distribution of any capital stock
of Triton Cayman or any option, right or warrant to subscribe for or purchase
any capital stock of Triton Cayman, or any other security convertible into or
exchangeable for capital stock of Triton Cayman to the holders of any class of
Ordinary Shares unless an offer or distribution on the same basis (in all
material respects) is made to the holders of any other class of Ordinary Shares
outstanding, subject to the Board of Directors of Triton Cayman having certain
rights to deal with shareholders in any territory (other than the Cayman Islands
or the U.S.) and fractional entitlements. Dividends to be satisfied by
distributions of property other than cash will be made or paid (as the case may
be) on the same basis (in all material respects) to holders of Ordinary Shares,
but no such distribution may be made unless at the time of declaration the
Cumulative Dividend Amount is zero.
No Class B Shares or Class C Shares, or any security convertible into or
exchangeable for any Class B Shares or Class C Shares, may be issued and no
option or right of subscription to acquire any Class B Shares or Class C Shares
may be granted, except in connection with a stock dividend of Class B Shares or
Class C Shares or, with respect to Class B Shares only, in connection with the
Merger.
STOCK DIVIDENDS
The Articles of Association provide that the Board of Directors of Triton
Cayman may declare and pay stock dividends out of certain undistributed profits
or reserves of Triton Cayman (without the need for shareholder approval),
provided that (a) stock dividends of Class B Shares may be declared only on the
Class B Shares and only if the Board of Directors simultaneously declares a
stock dividend on each Class A Share of a number of Class A Shares equal to the
number of Class B Shares being so issued on each Class B Share and (b) stock
dividends of Class A Shares may be declared only if the Board simultaneously
declares either (i) a stock dividend on each Class B Share of a number of Class
B
60
<PAGE>
Shares equal to the number of Class A Shares then being issued on each Class A
Share or (ii) a stock dividend of an equal number of Class A Shares on each
Class A Share and each Class B Share. No Class A Shares or Class B Shares may be
issued as stock dividends unless the effect would be to result in an Equity Unit
containing a whole number of Class B Shares and one-tenth of one share of Triton
Delaware Preferred Stock. All Class B Shares issued in connection with any stock
dividend will be thereafter included in Equity Units resulting in a
corresponding adjustment in the Pairing Ratio.
REDUCTION OF CAPITAL AND PURCHASE OF SHARES
Subject to the provisions of the Companies Act, Triton Cayman may by Special
Resolution reduce its share capital in any way provided that no such reduction
may be made if as a result all of the Class B Shares contained in Equity Units
will be cancelled unless prior to such reduction becoming effective the Board of
Directors of Triton Cayman is satisfied that the fraction of a share of Triton
Delaware Preferred Stock contained in such Equity Units will be cancelled and
any determination by the Board that it is so satisfied shall be conclusive and
binding.
Subject to the provisions of the Companies Act, any issued and outstanding
Ordinary Shares may be redeemed by Triton Cayman in such circumstances and on
such terms as shall be agreed by the Board of Directors of Triton Cayman and the
holder thereof, and the Board may deduct from the purchase price therefor the
aggregate amount of any outstanding debts, liabilities and engagements to or
with Triton Cayman by the holder of such shares. Triton Cayman may purchase all
or part of the Ordinary Shares of any holder whether or not it has made a
similar offer to all or any other holders. Notwithstanding the foregoing, no
purchase may be made of any Class B Shares contained in any Equity Units unless
Triton Cayman purchases the entire Equity Unit as set forth under "Purchase of
Equity Unit."
TRANSFER OF SHARES
Upon surrender to Triton Cayman or the transfer agent of Triton Cayman of a
certificate for Ordinary Shares duly endorsed or accompanied by proper evidence
of succession, assignment or authority to transfer, and otherwise meeting all
legal requirements for transfer, Triton Cayman shall issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction on its books. Triton Cayman may refuse to register the transfer of
shares of any holder which have been called for redemption unless otherwise
provided by the terms of such shares or the Board of Directors in connection
with the call of such shares.
The Board of Directors of Triton Cayman shall refuse to register the
transfer of any Class B Share contained in an Equity Unit unless there is
produced to the Board of Directors of Triton Cayman such evidence as it may in
its discretion require to ensure that on the same occasion there is being
transferred to the same person the fraction of a share of Triton Delaware
Preferred Stock and any other Class B Shares contained in the same Equity Unit.
PREFERENCE SHARES
GENERAL
Under the Articles of Association, Triton Cayman has authority to issue
20,000,000 preference shares. There are currently no preference shares
outstanding; however, Triton Cayman has authorized the issuance of up to
preference shares to be designated the 5% convertible preference shares (the
"Convertible Preference Shares"). Upon consummation of the Reorganization, each
share of Convertible Preferred Stock of Triton Delaware will be automatically
converted into one Convertible Preference Share, subject to dissenters' rights.
As of , 1996, there were shares of Convertible Preferred Stock
outstanding. Under the Articles of Association of Triton Cayman, the Board of
Directors of Triton Cayman may establish one or more additional classes or
series of preference shares having the number of shares, designations, relative
voting rights, dividend rates, liquidation and other rights, preferences, and
limitations that the Board of Directors fixes without any shareholder approval.
Such provisions could hinder an attempt to acquire control of Triton Cayman.
61
<PAGE>
CONVERTIBLE PREFERENCE SHARES
DIVIDENDS. Holders of Convertible Preference Shares will be entitled to
receive, when, as, and if declared by the Board of Directors of Triton Cayman
out of funds of Triton Cayman legally available for payment, cumulative cash
dividends at the annual rate per share equal to 5 percent of the Redemption
Price (defined below) of the shares payable semi-annually on September 30 and
March 30 in each year, except that if any such date is a Saturday, Sunday, or
legal holiday, then such dividend shall be payable on the next day that is not a
Saturday, Sunday, or legal holiday. Dividends will accrue from the date on which
the Convertible Preference Shares are issued and will be payable to holders of
record as they appear on the stock books of Triton Cayman on such record dates
as are fixed by the Board of Directors of Triton Cayman. The amount of dividends
payable for each semi-annual dividend period will be computed by dividing the
annual dividend amount by two. The amount of dividends payable for the initial
dividend period and for any period other than a full semi-annual dividend period
will be computed on the basis of a 360-day year of twelve 30-day months. No
interest will be payable in respect of any dividend payment on the Convertible
Preference Shares which may be in arrears.
If dividends on the Convertible Preference Shares shall not have been
declared and paid in full, or funds set aside for payment, by a date 15 days
after a dividend payment date (a "Calculation Date"), dividends payable on the
Convertible Preference Shares shall be increased by an amount equal to the prime
rate of Morgan Guaranty Trust Company of New York as in effect on each
Calculation Date plus 1 percent applied against the amount of dividends so due
and unpaid until such dividends shall be paid (the "Penalty Dividend").
The Convertible Preference Shares will have priority as to dividends over
Ordinary Shares and any other series or class of Triton Cayman's shares
hereafter issued which ranks junior as to dividends to the Convertible
Preference Shares ("Junior Dividend Shares"), and no dividend (other than
dividends payable solely in Junior Dividend Shares) may be paid on, and no
purchase, redemption, or other acquisition may be made by Triton Cayman of, any
Junior Dividend Shares unless all accrued and unpaid dividends on the
Convertible Preference Shares have been paid or declared and set apart for
payment. Triton Cayman may not pay dividends on any class or series of its
shares having parity with the Convertible Preference Shares as to dividends
("Parity Dividend Shares"), unless it has paid or declared and set apart for
payment or contemporaneously pays or declares and sets apart for payment all
accrued and unpaid dividends for all prior periods on the Convertible Preference
Shares and may not pay dividends on the Convertible Preference Shares unless it
has paid or declared and set apart for payment or contemporaneously pays or
declares and sets apart for payment all accrued and unpaid dividends for all
prior periods on the Parity Dividend Shares. Whenever all accrued dividends are
not paid in full on the Convertible Preference Shares or any Parity Dividend
Shares, all dividends declared on the Convertible Preference Shares and such
Parity Dividend Shares will be declared or made pro rata so that the amount of
dividends declared per share on the Convertible Preference Shares and such
Parity Dividend Shares will bear the same ratio that accrued and unpaid
dividends per share on the Convertible Preference Shares and such Parity
Dividend Shares bear to each other. The Convertible Preference Shares will be
junior as to dividends to any series or class of Triton Cayman's stock hereafter
issued which ranks senior as to dividends to the Convertible Preference Shares
("Senior Dividend Shares"), and if at any time Triton Cayman has failed to pay
or declare and set apart for payment accrued and unpaid dividends on any senior
dividend stock, Triton Cayman may not pay any dividend on the Convertible
Preference Shares.
LIQUIDATION RIGHTS. In case of the voluntary or involuntary liquidation,
dissolution, or winding up of Triton Cayman, holders of Convertible Preference
Shares are entitled to receive an amount per share equal to the Redemption
Price, plus any accrued and unpaid dividends (including Penalty Dividends) to
the payment date (the "Liquidation Price"), before any payment or distribution
is made to the holders of Ordinary Shares or any other series or class of Triton
Cayman's shares hereafter issued which ranks junior as to liquidation rights to
the Convertible Preference Shares, but the holders of Convertible Preference
Shares will not be entitled to receive the Liquidation Price of such shares
until the liquidation price of any other series or class of Triton Cayman's
shares hereafter
62
<PAGE>
issued which ranks senior as to liquidation rights to the Convertible Preference
Shares ("Senior Liquidation Shares") has been paid in full; provided, if, at
such time, any holder of Convertible Preference Shares has any outstanding
debts, liabilities or engagements to or with Triton Cayman (whether presently
payable or not), either alone or jointly with any other person, whether a
shareholder or not, (including, without any limitation, any liability associated
with the unpaid purchase price of such Convertible Preference Shares), the
liquidator appointed to oversee the liquidation of Triton Cayman shall deduct
from the fixed liquidation amount payable in respect of such Convertible
Preference Shares the aggregate amount of such debts, liabilities and
engagements and apply such amount to any of such debts, liabilities or
engagements. The holders of Convertible Preference Shares and all series or
classes of Triton Cayman's shares hereafter issued which rank on a parity as to
liquidation rights with the Convertible Preference Shares are entitled to share
ratably, in accordance with the respective preferential amounts payable on such
stock, in any distribution (after payment of the liquidation price of the Senior
Liquidation Shares) which is not sufficient to pay in full the aggregate of the
amounts payable thereon. After payment in full of the Liquidation Price of the
Convertible Preference Shares, the holders of such shares will not be entitled
to any further participation in any distribution of assets by Triton Cayman.
Neither a consolidation or merger of Triton Cayman with another company nor a
sale or transfer of all or part of Triton Cayman's assets for cash, securities,
or other property will be considered a liquidation, dissolution, or winding up
of Triton Cayman.
REDEMPTION. Triton Cayman may, at its option, redeem the Convertible
Preference Shares, in whole or in part, at any time on or after March 30, 1998
or such earlier date after which at least 75 percent of the Convertible
Preference Shares initially issued shall have been converted into Class A
Shares. The redemption price payable upon such optional redemption shall be the
Redemption Price plus any accrued and unpaid dividends (including Penalty
Dividends) to the redemption date. Such Redemption Price shall be payable in
cash.
The Convertible Preference Shares shall be subject to mandatory redemption
by Triton Cayman on March 30, 2004. At the option of Triton Cayman, such
redemption may be for (i) cash at the Redemption Price plus any accrued and
unpaid dividends (including Penalty Dividends) to the redemption date; (ii) such
number of Class A Shares whose aggregate value (based on the then current market
price determined as set forth in the resolution of the Board of Directors
designating the Convertible Preference Shares) equals the Redemption Price plus
any accrued and unpaid dividends (including Penalty Dividends) to the redemption
date; or (iii) a combination of cash and Class A Shares equal to the Redemption
Price plus any accrued and unpaid dividends (including Penalty Dividends) to the
redemption date. The Redemption Price equals $34.41 per share.
VOTING RIGHTS. The holders of Convertible Preference Shares will have no
voting rights except as described below or as required by Cayman Islands law. In
exercising any such vote each outstanding Convertible Preference Share will be
entitled to one vote.
So long as any Convertible Preference Shares are outstanding, Triton Cayman
will not, without the affirmative vote or consent of the holders of at least
two-thirds of the outstanding Convertible Preference Shares, voting or
consenting separately as a class with holders of any other class of Triton
Cayman's preference shares similarly affected, issue other than wholly for cash
consideration, any shares of any class of Senior Dividend Shares or Senior
Liquidation Shares, or amend the Articles of Association in a manner adversely
affecting the rights of such shareholders.
The Articles of Association may be amended to increase the number of
authorized shares of Triton Cayman's preference shares without the vote of the
holders of the outstanding Convertible Preference Shares.
The holders of the Convertible Preference Shares have no pre-emptive rights
with respect to any shares of capital stock of Triton Cayman or any other
securities of Triton Cayman convertible into or carrying rights or options to
purchase any such shares.
63
<PAGE>
CONVERSION RIGHTS. The holders of Convertible Preference Shares will be
entitled to convert their Convertible Preference Shares into Class A Shares
subject to the qualifications described below, except that, with respect to
Convertible Preference Shares called for redemption, conversion rights will
expire at the close of business on the fifth day prior to the redemption date
(unless Triton Cayman defaults in the payment of the Redemption Price). No
payment or adjustment will be made in respect of dividends on the Convertible
Preference Shares that may be accrued or unpaid or in arrears upon conversion of
shares of Convertible Preference Shares except as set forth below. No fractional
shares will be issued and, in lieu of any fractional share, Triton Cayman will
pay a cash adjustment based on the then current market price (determined as set
forth in the resolutions of the Board of Directors designating the Convertible
Preference Shares) of the Class A Shares.
Each Convertible Preference Share shall be convertible initially into one
Class A Share. However, the number of Class A Shares issuable on conversion of
each Convertible Preference Share (the "Conversion Rate") shall be subject to
adjustment as described below.
The Conversion Rate is subject to adjustment in certain circumstances,
including in respect of any dividends not declared and paid in full in respect
of any dividend payment date occurring prior to the date of conversion and any
Penalty Dividends payable thereon, upon the issuance of Class A Shares as a
stock dividend, in connection with combinations and subdivisions of Class A
Shares, upon certain reclassifications of Class A Shares, upon the issuance to
Triton Cayman's shareholders of rights or warrants to subscribe for or purchase
Class A Shares at a price per share less than the then current market price of
Class A Shares, and in connection with certain distributions to Triton Cayman's
shareholders of evidences of indebtedness or assets. Except in the case of the
adjustment in respect of dividends, no adjustment in the Conversion Price will
be required unless it would result in at least a 1 per cent increase or decrease
in the Conversion Price; however, any adjustment not made will be carried
forward.
In case of any consolidation or merger of Triton Cayman with any other
company, or in the case of any merger of another company into Triton Cayman
(other than a merger with a company in which merger Triton Cayman is the
continuing company and which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Triton Cayman), or
in the case of a sale or conveyance of all or substantially all of the assets of
Triton Cayman to another company, Triton Cayman will be required to make proper
provisions so that the holder of each Convertible Preference Share then
outstanding will have the right thereafter to convert such Convertible
Preference Share into the kind or amount of shares of stock and other securities
and property receivable upon such consolidation, merger, sale or conveyance by a
holder of the number of Class A Shares into which such Convertible Preference
Share might have been converted immediately prior to such consolidation, merger,
sale or conveyance.
PREFERENCE SHARE PURCHASE RIGHTS
The Board of Directors of Triton Cayman has adopted a Shareholder Rights
Plan pursuant to which preference share purchase rights attach to all Ordinary
Shares at the rate of one right for each Ordinary Share. Chemical Bank is the
Rights Agent for the Preference Share Purchase Rights. Each right entitles the
registered holder to purchase from Triton Cayman one one-thousandth of a Series
A Preference Share, par value $.01 per share (the "Junior Preference Shares"),
of Triton Cayman at a price of $120 per one one-thousandth of a share of such
Junior Preference Shares, subject to adjustment.
Generally, the rights only become distributable ten days following public
announcement that a person has acquired beneficial ownership of 15% or more of
the Ordinary Shares or ten business days following commencement of a tender or
exchange offer for 15% or more of the outstanding Ordinary Shares. If, among
other events, any person becomes the beneficial owner of 15% or more of the
Ordinary Shares, each right not owned by such person generally becomes the right
to purchase such number of Class A Shares that is equal to the amount obtained
by dividing the right's exercise price (currently $120) by 50% of the market
price of the Class A Shares on the date of the first occurrence.
64
<PAGE>
In addition, if Triton Cayman is subsequently merged or certain other
extraordinary business transactions are consummated, each right generally
becomes a right to purchase such number of shares of common stock of the
acquiring person that is equal to the amount obtained by dividing the right's
exercise price by 50% of the market price of such ordinary shares on the date of
the first occurrence.
Under certain circumstances, Triton Cayman's directors may determine that a
tender offer or merger is fair to all shareholders and prevent the rights from
being exercised; provided that if an offer is made to acquire the Class A Shares
and no offer is made to acquire the Equity Units or Class B Shares (or Class C
Shares) or an offer is made for less consideration per unit or share than that
offered in respect of a Class A Share (less certain amounts due to the holders
of a Class A share in respect of the Cumulative Dividend Amount or the
Liquidation Available Amount, as the case may be), the Board of Directors of
Triton Cayman shall not be permitted to redeem the rights. At any time after any
person or group acquires 15% or more of the Ordinary Shares outstanding and
prior to the acquisition by such person or group of 50% or more of the
outstanding Ordinary Shares or the occurrence of an event described in the prior
paragraph, the Board of Directors of Triton Cayman may exchange the rights
(other than rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one Ordinary Share, or one
one-thousandth of a Junior Preference Share per right (subject to adjustment).
Triton Cayman has the ability to amend the rights (except the redemption price)
in any manner prior to the public announcement that a 15% position has been
acquired or a tender offer has been commenced.
Any Junior Preference Shares issued pursuant to the Shareholders Rights Plan
will rank junior as to dividends and liquidation to the Convertible Preference
Shares. Junior Preference Shares purchasable upon exercise of the rights will
not be redeemable. Each Junior Preference Share will be entitled, when, as and
if declared, to a minimum preferential quarterly dividend payment of $1 per
share but will be entitled to an aggregate dividend of 1,000 times the dividend
declared per Class A Share. In the event of liquidation, the holders of the
Junior Preference Shares will be entitled to a minimum preferential liquidation
payment of $100 per share (plus any accrued but unpaid dividends) but will be
entitled to an aggregate payment of 1,000 times the payment made per Class A
Share. Each Junior Preference Share will have 1,000 votes, voting together with
Ordinary Shares. Finally, in the event of any merger, consolidation or other
transaction in which Ordinary Shares are converted or exchanged, each Junior
Preference Share will be entitled to receive 1,000 times the amount received per
Ordinary Share. These rights are protected by customary antidilution provisions.
Triton Cayman will be entitled to redeem the rights at $0.01 a right at any
time until the tenth day following the public announcement that a 15% position
has been acquired or a tender offer has been commenced. The rights will expire
on , 2005.
DESCRIPTION OF TRITON DELAWARE PREFERRED STOCK
GENERAL
Pursuant to the Merger Agreement, each one-tenth of one share of Triton
Delaware Preferred Stock issued will be paired with, and will not trade
separately from, each Class B Share issued to stockholders who make an Equity
Unit Election, subject to the Equity Unit Limitation. See "The Reorganization"
and "Description of Receipts."
Under the Certificate of Incorporation, Triton Delaware has authority to
issue 5,000,000 shares of preferred stock. As of , 1996, there were
shares of Convertible Preferred Stock outstanding which will be
automatically converted on a share for share basis into Convertible Preference
Shares of Triton Cayman upon the consummation of the Merger. See "Description of
Authorized Shares of Triton Cayman -- Preference Shares -- Convertible
Preference Shares." In connection with the Merger, the certificate of
incorporation of Triton Delaware will be the certificate of incorporation (the
"Certificate of Incorporation") of the surviving corporation and will be amended
and restated as set forth in Exhibit A to the Merger Agreement. The Certificate
of Incorporation contains the same terms and provisions as Triton Delaware's
existing certificate of incorporation except that it provides
65
<PAGE>
that (i) the par value of any capital stock issued by Triton Delaware shall be
$.01 per share, as opposed to $1.00 par value in the case of Triton Delaware
Common Stock and no par value in the case of Triton Delaware's preferred stock,
(ii) stockholders having a sufficient number of votes to approve a corporate act
may act without a meeting by written consent and (iii) directors will be elected
annually.
Pursuant to the Certificate of Incorporation, the Board of Directors of
Triton Delaware will be authorized, without further stockholder action, except
as described below under "Voting Rights", to provide for the issuance of one or
more additional series of preferred stock, par value $.01 per share, with such
voting rights, designations, preferences, limitations and special rights as may
be set forth in resolutions providing for the issuance thereof adopted by the
Board of Directors of Triton Delaware.
The following description of certain provisions of the Triton Delaware
Preferred Stock is intended as a summary only and does not purport to be
complete. While Triton Delaware believes the descriptions of the material
provisions of the Certificate of Incorporation of Triton Delaware (the
"Charter") and the Certificate of Designation for the Triton Delaware Preferred
Stock (the "Designation") are accurate statements with respect to such material
provisions, such statements are subject to the detailed provisions in the
Charter and the Designation and are qualified in their entirety by reference to
the complete text of the Charter and the Designation.
Transfers of Shares of Triton Delaware Preferred Stock will not be
registered unless a number of Class B Shares equal to the Pairing Ratio is
transferred simultaneously to the same transferee.
DIVIDENDS
Holders of shares of Triton Delaware Preferred Stock will be entitled to
receive dividends, when, as and if declared by the Board of Directors of Triton
Delaware, out of funds of Triton Delaware legally available for payment thereof,
as the Board of Directors of Triton Delaware in its absolute discretion
determines, payable at such times as the Board of Directors of Triton Delaware
may determine; provided that at any time that the Board of Directors of Triton
Delaware declares a dividend on the common stock of Triton Delaware, it must
also declare a dividend on the Triton Delaware Preferred Stock. The holders of
shares of Triton Delaware Preferred Stock shall receive an amount of dividends
declared such that the aggregate amount of the dividend declared with respect to
the Triton Delaware Preferred Stock shall be a percentage of the aggregate
amount of the dividend declared on the Triton Delaware Preferred Stock and the
common stock (and any other series or class of stock that participates in
dividends with the holders of the common) equal to the product of (x) the number
determined by dividing the number of shares of Triton Delaware Preferred Stock
outstanding at such time multiplied by ten, by the total number of shares of
Triton Delaware Common Stock outstanding immediately prior to the Effective Time
multiplied by (y) 100.
Under Delaware law, Triton Delaware may declare and pay dividends on its
shares of capital stock out of its surplus and, if there is no surplus, out of
net profits for the current and for the preceding fiscal year, unless the net
assets of Triton Delaware are less than the capital represented by issued and
outstanding stock having a preference on asset distributions. Triton Delaware
currently intends is to retain earnings for use in Triton Delaware's business
and the financing of its capital requirements. The payment of any future cash
dividends is necessarily dependent upon the earnings and financial needs of
Triton Delaware, along with applicable legal and contractual restrictions.
LIQUIDATION RIGHTS
In case of the voluntary or involuntary liquidation, dissolution, or
winding-up of Triton Delaware, holders of shares of Triton Delaware Preferred
Stock are entitled to receive out of the assets of Triton Delaware available for
distribution to its stockholders an amount per share of Triton Delaware
Preferred Stock equal to the fair market value of one-tenth of one share of
Triton Delaware Preferred Stock at the Effective Time, as determined by Triton
Delaware upon the advice of its financial advisors (the "Liquidation
Preference"), before any payment or distribution is made to the holders of any
series or class of Triton Delaware's stock which ranks junior as to liquidation
rights to the Triton Delaware Preferred Stock, but the holders of the shares of
the Triton Delaware Preferred Stock will
66
<PAGE>
not be entitled to receive the Liquidation Preference until the liquidation
price of any other series or class of Triton Delaware's stock hereafter issued
which ranks senior as to liquidation rights to the Triton Delaware Preferred
Stock ("Senior Liquidation Stock") has been paid in full. The holders of Triton
Delaware Preferred Stock and all series or classes of Triton Delaware's stock
hereafter issued which rank on a parity as to liquidation rights with the Triton
Delaware Preferred Stock are entitled to share ratably, in accordance with the
respective preferential amounts payable on such stock, in any distribution
(after payment of the liquidation price of the Senior Liquidation Stock) which
is not sufficient to pay in full the aggregate of the amounts payable thereon.
After payment in full of the Liquidation Preference, the holders of such shares
of Triton Delaware Preferred Stock will be entitled to share with the holders of
common stock of Triton Delaware (and any other class or series of capital stock
of Triton Delaware entitled to share in any such distribution with the holders
of the common stock) in any distribution of assets otherwise made by Triton
Delaware to the holders of the common stock. In connection with any such
distribution, the holders of shares of Triton Delaware Preferred Stock shall be
entitled to receive a percentage of such distribution equal to the product of
(x) the number determined by dividing the number of shares of Triton Delaware
Preferred Stock outstanding at such time multiplied by ten, by the total number
of shares of Triton Delaware Common Stock outstanding immediately prior to the
Effective Time multiplied by (y) 100 receive a portion of such distribution
equal to the product of the aggregate distribution and the percentage of shares
of Triton Delaware Common Shares that receive Equity Units in the Merger, and
the holders of common stock of Triton Delaware shall receive the remainder of
such distribution. In the event that number of outstanding shares of Triton
Delaware Preferred Stock decreases, such percentage shall be decreased in
proportion to such decrease in number of shares of Triton Delaware Preferred
Stock. Neither a consolidation or merger of Triton Delaware with another
corporation nor a sale or transfer of all or part of Triton Delaware's assets
for cash, securities, or other property will be considered a liquidation,
dissolution, or winding-up of Triton Delaware.
PURCHASE OF EQUITY UNITS
Triton Cayman or Triton Delaware may, at its option, purchase Equity Units,
in whole or in part, at any time on or after , 1999. Triton Cayman
may also, at its option, purchase Equity Units, in whole or in part, immediately
prior to the date on which a sale or other disposition of the stock of Triton
Delaware is consummated. The purchase price (the "Purchase Price") per Equity
Unit may be paid in cash or, by Triton Cayman, in Ordinary Shares or a
combination thereof. To the extent that the Purchase Price is paid in cash, the
Purchase Price per Equity Unit payable upon such purchase shall be the greater
of (i) 95% of the Fair Market Value (as defined below) of one Class A Share
(less the amount due per Class A Share in respect of the Liquidation Available
Amount) and (ii) the Fair Market Value of the Equity Unit. To the extent that
the Purchase Price is paid in Ordinary Shares, the Purchase Price per Equity
Unit payable upon such purchase shall be the greater of (i) .95 of a Class A
Share and (ii) the number of Class A Shares obtained by dividing the Fair Market
Value of an Equity Unit by the Fair Market Value of a Class A Share; provided
that, if at the time of such purchase, the Cumulative Dividend Amount is
positive, the same number of Class C Shares shall be issued in lieu of Class A
Shares.
"Fair Market Value" shall equal the average of the daily Closing Prices for
the 20 consecutive Trading Days (as defined below) ending 15 days prior to the
date of such purchase (the "Purchase Date"). The Closing Price for each day
shall be the last reported sale price of the Class A Share or the Equity Unit,
as the case may be, on the principal national securities exchange on which such
security may be listed or if such security is not then so listed, the closing
price of such security as shown by the National Association of Securities
Dealers, Inc. National Market or, if no such closing price is available, at the
average of the representative last bid and asked prices of such security in the
over-the-counter market, as shown by the National Association of Securities
Dealers, Inc, Automated Quotation System Level I (or comparable system) or in
the absence of any of the foregoing, the fair market value as determined by an
investment banking firm of recognized national standing chosen by the Board of
Directors, whose determination shall be conclusive. "Trading Day" shall mean
each weekday
67
<PAGE>
other than any day on which the Class A Shares or the Equity Units, as the case
may be, are not traded on any national securities exchange or quoted in the
NASDAQ National Market or in the over-the-counter market.
Notice of an optional purchase of the Equity Unit by Triton Cayman or Triton
Delaware will be mailed at least 30 days but not more than 60 days before the
Purchase Date to each holder of record of the Equity Unit to be purchased at the
address shown on the books of the Depositary. If less than all of the
outstanding Equity Units are to be purchased, Triton Cayman or Triton Delaware,
as the case may be, will select those Equity Units to be purchased pro rata or
by lot or in such other manner as its Board of Directors determines. Shares of
Triton Delaware Preferred Stock included in Equity Units purchased by Triton
Cayman will be restored to the status of authorized but unissued shares of
preferred stock, without designation as to class, and may thereafter be issued,
but not as shares of Triton Delaware Preferred Stock.
Provided that Triton Cayman or Triton Delaware has made available at the
office of the Transfer Agent a sufficient amount of cash or, in the case of
Triton Cayman, Class A Shares (or Class C Shares), as the case may be, to effect
the purchase, on and after the Purchase Date, dividends will cease to accrue on
the Triton Delaware Preferred Stock included in such Equity Units, such shares
of Triton Delaware Preferred Stock shall no longer be deemed to be outstanding,
and all rights of the holders of such shares of Triton Delaware Preferred Stock
will cease, other than the right to receive any cash or Class A Shares (or Class
C Shares) payable upon such purchase, without interest.
Neither Triton Cayman nor Triton Delaware can exercise its option to
purchase the Equity Units (i) in the event of the bankruptcy or insolvency of
Triton Delaware, (ii) an event of default has occurred and is continuing with
respect to any indebtedness of Triton Delaware with an aggregate principal
amount outstanding in excess of $ or (iii) the fair market value of Triton
Delaware's net assets (as determined in good faith by its Board of Directors) is
less than 110% of the product of the Liquidation Preference times the number of
shares of Triton Delaware Preferred Stock outstanding at such time.
For a description of the rights of holders of Class A Shares and Class B
Shares of Triton Cayman upon any purchase by Triton Cayman or Triton Delaware of
the Equity Units, see "Description of Authorized Shares of Triton Cayman --
Purchase of Equity Unit."
VOTING RIGHTS
The holder of each share of Triton Delaware Preferred Stock will be entitled
to two votes per share, voting together with holders of common stock of Triton
Delaware on any matter submitted to a vote of the stockholders of Triton
Delaware, except matters on which holders of Triton Delaware Preferred Stock are
entitled to a class vote under Delaware law. Each one-tenth of one share of
Triton Delaware Preferred Stock shall therefore be entitled to 1/5 of one vote
per share.
The holders of the Triton Delaware Preferred Stock will have the right,
voting separately as a class, to elect one director to the Board of Directors of
Triton Delaware at the annual meeting of the stockholders of Triton Delaware
held in 1997 and each annual meeting of the stockholders of Triton Delaware
thereafter; provided that holders of not less than a majority of the shares of
Triton Delaware Preferred Stock then outstanding are present at such meeting in
person or by proxy. Such director will be elected from candidates nominated by a
majority of the Board of Directors of Triton Delaware or by any one or more
holders of Triton Delaware Preferred Stock holding at least 10% of the
outstanding shares; provided that in order for any nomination by any holder to
be valid, any holder desiring to make any such nomination is required to give
written notice specifying certain information including the name of any such
nominee to Triton Delaware within the time period set forth in Triton Delaware's
By-Laws for nominations of directors by stockholders which is presently 90 days
prior to an annual meeting of stockholders and seven days following the date
notice of any special meeting is given to stockholders.
68
<PAGE>
Except to the extent a class vote is required under Delaware law, each share
of Triton Delaware Preferred Stock will entitle the holder thereof to two votes
per share, voting with the holders of the Triton Delaware common stock on any
matter submitted to a vote of the stockholders of Triton Delaware in connection
with certain mergers, consolidations, combinations or similar transactions
involving Triton Delaware (other than transactions contemplated by the Merger
Agreement). Immediately after the Effective Time, Triton Cayman, as the holder
of all of the Triton Delaware common stock, will be able to approve or reject
all matters submitted for the vote or consent of stockholders of Triton
Delaware, without the affirmative vote or consent of any holder of Triton
Delaware Preferred Stock, except on matters on which the holders of the Triton
Delaware Preferred Stock are entitled to vote as a class.
PREEMPTIVE RIGHTS
The holders of the Triton Delaware Preferred Stock will have no preemptive
rights.
DESCRIPTION OF RECEIPTS
The following is a summary of certain provisions of the Deposit Agreement
(the "Unit Deposit Agreement") pursuant to which Receipts representing Unit
Depositary Shares are to be issued. The Unit Deposit Agreement will be among
Triton Cayman, Triton Delaware, Chemical Bank, as Depositary (the "Depositary"),
and all holders from time to time of Receipts. While Triton Delaware believes
the descriptions of the material provisions of the Unit Deposit Agreement are
accurate statements with respect to such material provisions, such statements
are qualified in their entirety by reference to the Unit Deposit Agreement, a
copy of which has been filed as an Exhibit to the Registration Statement of
which this Proxy Statement/Prospectus is a part. For further information as to
how this and other Exhibits to the Registration Statement may be obtained, see
"Available Information."
RECEIPTS
Receipts evidencing Unit Depositary Shares are issuable by the Depositary
pursuant to the Unit Deposit Agreement. See "The Reorganization -- Equity Unit
Election." Each Unit Depositary Share evidenced by a Receipt will represent one
Equity Unit, initially consisting of one Class B Share of Triton Cayman and
one-tenth of one share of Triton Delaware Preferred Stock, each deposited with
the Depositary. A Receipt may evidence any number of Unit Depositary Shares.
Unit Depositary Shares evidenced by the Receipts represent proportional rights
to the Equity Units deposited with the Depositary pursuant to the terms of the
Unit Deposit Agreement and any and all Class B Shares, other securities,
property and cash received at any time by the Depositary in respect or in lieu
of any Equity Units, other securities, property or cash which have previously
been deposited with the Depositary (collectively, the "Deposited Securities").
DEPOSIT AND WITHDRAWAL OF DEPOSITED SECURITIES
Upon deposit of Equity Units with the Depositary, subject to the terms of
the Unit Deposit Agreement, the Depositary will execute and deliver at its
office, which is presently located at , to the person or
persons specified by the depositor upon payment of the fees, charges and taxes
provided in the Unit Deposit Agreement, a Receipt or Receipts registered in the
name of such person or persons for the number of Unit Depositary Shares issuable
in respect of such deposit.
Receipt holders will not be entitled to delivery of the Deposited Securities
represented by Receipts unless Triton Cayman or Triton Delaware otherwise notify
the Depositary.
The initial deposit of Equity Units in connection with the Reorganization
will be made in the manner described under "The Reorganization -- Equity Unit
Election."
69
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND RIGHTS
The Depositary is required to distribute any amounts received as cash
dividends or other distributions, as described in the following paragraphs, in
respect of Class B Shares, Triton Delaware Preferred Stock or other Deposited
Securities to holders of Receipts in proportion to the number of Unit Depositary
Shares representing such Deposited Securities held by each of them. The amounts
distributed will be reduced by any amounts required to be withheld on account of
taxes or otherwise.
If a distribution by Triton Cayman consists of a dividend in or free
distribution of Class B Shares, each Unit Depositary Share shall thenceforth
also represent its proportionate interest in the additional Class B Shares so
distributed.
If Triton Cayman offers or causes to be offered to the holders of any of its
securities constituting a part of the Deposited Securities any rights to
subscribe for or acquire additional Class A Shares or any other securities of
Triton Cayman or any other rights of any nature which it is required to offer or
cause to be offered to the holders of such securities pursuant to the Articles
of Association of Triton Cayman or the Companies Act, the Depositary will, after
consultation with Triton Cayman, either (a) distribute the warrants or other
instruments evidencing such rights to holders of Receipts or (b) employ such
other method (after consultation with Triton Cayman) as it may deem feasible to
facilitate the exercise, sale or transfer of such rights by holders of Receipts.
If such rights or warrants are not exercised and appear to be about to lapse,
the Depositary may, in its discretion, sell such rights or warrants at public or
private sale, at such place or places and upon such terms as the Depositary may
deem proper, allocate the proceeds of such sales for the account of the holders
of Unit Depositary Shares otherwise entitled thereto upon an averaged or other
practicable basis without regard to any distinctions among such holders because
of exchange restrictions, or the date of delivery of any Receipt or Receipts, or
otherwise and distribute the net proceeds so allocated to such holders as in the
case of a distribution received in cash.
If Triton Cayman makes a distribution other than cash, Class B Shares or
rights of any nature to holders of any of its securities constituting a part of
the Deposited Securities, Triton Cayman will make such distribution to the
Depositary and the Depositary will cause the securities or other property it
receives as a result of such distribution to be distributed to the holders of
Unit Depositary Shares in proportion to the number of Unit Depositary Shares
representing Deposited Securities held by each of them respectively. If such
distribution consists of securities, the Depositary may, with the consent of
Triton Cayman, deposit such securities in a depositary facility and distribute
depositary shares for such securities in lieu of the securities so deposited to
the holders of Receipts. If the Depositary determines (after consultation with
Triton Cayman) that any such distribution (other than a distribution of
securities having an aggregate fair market value of $5 million or more) cannot
be made proportionately among the holders of the Unit Depositary Shares entitled
thereto, or if for any other reason (including any tax withholding requirement)
the Depositary deems such distribution not to be feasible, the Depositary may
(after consultation with Triton Cayman) adopt such method as it may deem
equitable for the purpose of effecting such distribution, including the sale (at
public or private sale) of the securities or property thus received, or any part
thereof, and the distribution of the net proceeds of any such sale as in the
case of a distribution received in cash.
Triton Cayman has agreed to take all necessary action and to comply in all
material respects with all applicable United States and Cayman Islands laws and
regulations in order to permit the rights and other property referred to in the
three preceding paragraphs to be offered or distributed to the holders of Unit
Depositary Shares except in circumstances where such offer or distribution is of
rights and property (other than Class B Shares) having an aggregate fair market
value of less than $5 million in which case Triton Cayman will not be required
to so comply and the Depositary (after consultation with Triton Cayman) will in
lieu of making such rights or property available to the holders of Unit
Depositary Shares, sell or otherwise dispose of such rights or property and
distribute the net proceeds thereof as in the case of a cash distribution
described above.
70
<PAGE>
If the Depositary determines that any distribution in property other than
cash (including rights) on Deposited Securities is subject to any tax that the
Depositary is obligated to withhold, the Depositary may (after consultation with
Triton Cayman if practicable) dispose of all or a portion of such property in
such amounts and in such manner as the Depositary deems necessary and
practicable to pay such taxes, by public or private sale, and the Depositary
shall distribute the net proceeds of any such sale or the balance of any such
property after deduction of such taxes to the holders of Receipts entitled
thereto.
RECORD DATES
Whenever any distribution shall be made upon Class B Shares, Triton Delaware
Preferred Stock or any other Deposited Securities, or whenever the Depositary
shall receive notice of any meeting of holders of Class B Shares, Triton
Delaware Preferred Stock or any other Deposited Securities, or whenever the
Depositary shall find it necessary or convenient in connection with the giving
of any notice, solicitation or any consent or any other matter, the Depositary
will fix a record date for the determination of the holders of Unit Depositary
Shares who are entitled to receive such distribution or net proceeds of the sale
thereof, to give instructions for the exercise of voting rights at any such
meeting, to receive such notice or solicitation, or to act in respect of such
other matter, subject to the provisions of the Unit Deposit Agreement. Such
record date shall be identical to that fixed by Triton Cayman or Triton Delaware
with respect to Class B Shares, Triton Delaware Preferred Stock or any other
Deposited Securities, unless otherwise agreed by Triton Cayman or Triton
Delaware, as the case may be.
VOTING OF THE UNDERLYING DEPOSITED SECURITIES
As soon as practicable after receipt of notice of any meeting or
solicitation of consents or proxies of holders of Class B Shares, Triton
Delaware Preferred Stock or any other Deposited Securities, the Depositary will
mail to the record holders of Unit Depositary Shares a notice which shall
include such information as is contained in such notice of meeting or
solicitation and, if applicable, will inform such holders of the procedures to
be followed to permit such holders to attend the meeting in person as permitted
under Triton Cayman's Articles of Association or Triton Delaware's Certificate
of Incorporation. See "Description of Authorized Shares of Triton Cayman --
Voting Rights." The record holders of Unit Depositary Shares at the close of
business on the date specified by the Depositary will be entitled, subject to
any applicable provisions of law and the provisions of or governing the
Deposited Securities, to instruct the Depositary as to the exercise of the
voting rights, if any, pertaining to such Class B Shares, Triton Delaware
Preferred Stock or other Deposited Securities represented by their respective
Unit Depositary Shares. The Depositary has agreed that it will endeavor, insofar
as practicable and permitted by applicable provisions of law and the provisions
of or governing the Class B Shares, Triton Delaware Preferred Stock or other
Deposited Securities, to vote the Deposited Securities so represented in
accordance with any such written instructions of record holders of Unit
Depositary Shares. The Depositary will not vote such Class B Shares, Triton
Delaware Preferred Stock or other Deposited Securities, except in accordance
with nondiscretionary instructions from such record holder.
INSPECTION OF TRANSFER BOOKS
The Depositary will keep, at its transfer office in New York City, a
register for the registration of Receipts and their transfer that at all
reasonable times will be open for inspection by the holders of Unit Depositary
Shares, Triton Cayman and Triton Delaware, provided that such inspection shall
not be for the purpose of communicating with holders of Unit Depositary Shares
in the interest of a business or object other than the business of Triton Cayman
and Triton Delaware or a matter related to the Unit Deposit Agreement or the
Unit Depositary Shares.
REPORTS AND NOTICES
The Depositary will make available for inspection by Unit Depositary Share
holders at its office any reports and communications received from Triton Cayman
or Triton Delaware that are both (a) received by the Depositary as the holder of
Class B Shares or Triton Delaware Preferred Stock or
71
<PAGE>
any other Deposited Securities which are a part of the Equity Units and (b) made
generally available to the holders of such Class B Shares or Triton Delaware
Preferred Stock or other Deposited Securities which are a part of the Equity
Units by Triton Cayman or Triton Delaware, as the case may be. The Depositary
will also send to Unit Depositary Share holders copies of such reports when
furnished by Triton Cayman or Triton Delaware as provided in the Deposit
Agreement. See "Available Information" for a description of the reports to be
furnished.
On or before the first date on which Triton Cayman or Triton Delaware gives
notice, by publication or otherwise, of any meeting of holders of Class B Shares
or Triton Delaware Preferred Stock which are a part of the Equity Units or other
Deposited Securities or of any adjourned meeting of such holders, or of the
taking of any action by such holders other than at a meeting, Triton Cayman or
Triton Delaware, as the case may be, shall transmit to the Custodian a copy of
the notice thereof in the form given or to be given to holders of Deposited
Securities. The Depositary will, at the expense of Triton Cayman or Triton
Delaware, as the case may be, arrange for the prompt mailing of copies thereof
to all Unit Depositary Share holders and will make such notices available to
holders of Unit Depositary Shares on a basis similar to that for holders of
Deposited Securities.
CHANGES AFFECTING DEPOSITED CLASS B SHARES
Upon any split-up, division, subdivision, consolidation, cancellation or any
other reclassification of Class B Shares or any other Deposited Securities, or
upon any recapitalization, reorganization, merger or consolidation or sale of
assets affecting Triton Cayman or to which it is a party, any securities that
shall be received by the Depositary in exchange for, or in conversion,
replacement, or otherwise in respect of, Class B Shares or any other Deposited
Securities shall be treated as Deposited Securities under the Unit Deposit
Agreement, and the Unit Depositary Shares shall thenceforth represent the right
to receive the Deposited Securities including the securities so received. In any
such case the Depositary may with Triton Cayman's approval, and shall if Triton
Cayman shall so request, subject to the Unit Deposit Agreement, call for the
surrender of outstanding Receipts to be exchanged for new Receipts specifically
describing such newly received Deposited Securities.
Upon any consolidation, cancellation or any other reclassification of Triton
Delaware Preferred Stock, or upon any recapitalization, reorganization, merger
or consolidation or sale of assets affecting Triton Delaware or to which it is a
party, or in connection with the liquidation, dissolution or winding up of
Triton Delaware, any securities that shall be received by the Depositary in
exchange for or in conversion, replacement, or otherwise in respect of, Triton
Delaware Preferred Stock shall be distributed to the holders of Unit Depositary
Shares as in the case of a distribution received in cash, and thereafter an
Equity Unit shall consist only of Class B Shares.
PURCHASE OF EQUITY UNITS
As soon as practicable after receipt of notice that Triton Cayman or Triton
Delaware is purchasing all or part of the Equity Units, the Depositary shall
mail to the holders of Unit Depositary Shares a notice containing (a) such
information as is contained in such notice of purchase and (b) a statement that,
on and after a date specified by the Depositary in such notice, each holder of
the Equity Units to be purchased shall be entitled to receive upon presentation
of the Receipts held by such holder the purchase price for such Equity Units
represented by Unit Depositary Shares less any amount required to be withheld by
Triton Cayman, Triton Delaware or the Depositary from any such payment in
respect of taxes. Upon payment of such purchase price in cash, Class A Shares or
Class C Shares, the Receipts evidencing the Unit Depositary Shares which are so
purchased will thereafter represent the right to receive all Deposited
Securities other than the Class B Shares and the shares of Triton Delaware
Preferred Stock. If the purchase price is paid in Class C Shares, at Triton
Cayman's request, the Depositary will distribute the cash portion of the
purchase price, if any, as in the case of a distribution received in cash and
the Unit Depositary Shares which are so purchased will thereafter represent the
right to receive such Class C Shares and all Deposited Securities other than the
Class B Shares and the shares of Triton Delaware Preferred Stock. In any such
case, the Depositary may with
72
<PAGE>
Triton Cayman's approval, and shall if Triton Cayman shall so request, subject
to the Unit Deposit Agreement, call for the presentation of outstanding Receipts
and distribute Class C Shares, if applicable, and the remaining Deposited
Securities, if any, to the holders of the Unit Depositary Shares in proportion
to the number of Unit Depositary Shares representing Deposited Securities held
by each of them respectively.
To the extent that Equity Units are purchased for Class A Shares (or Class C
Shares) and all of such Class A Shares (or Class C Shares) cannot be distributed
to the record holders of Receipts without creating fractional interests in such
Class A Shares (or Class C Shares), the Depositary may, with the consent of
Triton Cayman, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including the public or private sale of
such Class A Shares (or Class C Shares), the proceeds which shall be distributed
or made available for distribution to such record holders of Receipts, net of
any taxes required to be withheld.
EXCHANGE OF RECEIPTS UPON CONVERSION OF CLASS B SHARES OR CLASS C SHARES
In the event that the Board of Directors of Triton Cayman determines
pursuant to the Articles of Association (whether as a result of the redemption
of Triton Delaware Preferred Stock, the liquidation, dissolution or winding up
of Triton Delaware or otherwise) to cause the Class B Shares (or Class C Shares)
to be converted into Class A Shares, then, if so directed by Triton Cayman, the
Depositary is required to call for the surrender of outstanding Receipts for
exchange into Class A Shares.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may at any time resign as Depositary under the Unit Deposit
Agreement by written notice of its election so to do delivered to Triton Cayman
and Triton Delaware or be removed as Depositary by the joint action of Triton
Cayman and Triton Delaware by written notice of such removal delivered to the
Depositary, such resignation or removal to take effect upon the appointment of
and acceptance by a successor depositary. If the Depositary resigns or is
removed, Triton Cayman and Triton Delaware are required, within 45 days after
delivery of the notice of resignation or removal, as the case may be, to use
their best efforts to appoint a successor depositary. If a successor depositary
shall not have been appointed in 45 days, the resigning Depositary may petition
a court of competent jurisdiction to appoint a successor depositary.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The Receipts and the Unit Deposit Agreement may at any time be amended by
agreement among Triton Cayman, Triton Delaware and the Depositary. Any amendment
that imposes or increases any fees, taxes or charges (other than charges
referred to in clauses (i) through (iii) under "Charges of Depositary" below),
or that otherwise prejudices any substantial existing right of Unit Depositary
Share holders, will not take effect as to outstanding Receipts until the
expiration of thirty days after notice of such amendment has been given to the
record holders of outstanding Unit Depositary Shares. Every holder of a Unit
Depositary Share at the expiration of such thirty day period will be deemed by
continuing to hold such Unit Depositary Share to consent and agree to such
amendment and to be bound by the Unit Deposit Agreement or the Unit Depositary
Share as amended thereby. In no event may any amendment impair the right of any
Unit Depositary Share holder to surrender his Receipt and receive therefor the
Deposited Securities represented thereby.
Whenever so directed by Triton Cayman and Triton Delaware, the Depositary
will terminate the Unit Deposit Agreement by mailing notice of such termination
to the record holders of all Unit Depositary Shares then outstanding at least 30
days prior to the date fixed in such notice for such termination. After the date
of termination, the Depositary will perform no further acts under the Unit
Deposit Agreement, except to advise holders of Receipts of such termination, to
receive and hold distributions on Deposited Securities (or sell property or
rights or convert Deposited Securities into cash) and, subject to the Unit
Deposit Agreement, deliver Deposited Securities being withdrawn in exchange for
Receipts. As soon as practicable after the expiration of six months from the
date of
73
<PAGE>
termination, the Depositary shall sell the Deposited Securities and may
thereafter hold the net proceeds, together with any other cash then held,
without liability for interest, for the pro rata benefit of the holders of
Receipts that have not theretofore been surrendered.
CHARGES OF DEPOSITARY
Triton Cayman and Triton Delaware will pay all charges and expenses of the
Depositary and those of any registrar or co-registrar under the Unit Deposit
Agreement in accordance with agreements between the Depositary, Triton Cayman
and Triton Delaware from time to time, but will not pay (i) stock transfer or
other taxes and other governmental charges (which are payable by holders of
Receipts or persons depositing Equity Units) or (ii) any applicable share
transfer or registration fees on deposits or withdrawals of Equity Units.
GENERAL
Neither the Depositary, its agents, Triton Cayman nor Triton Delaware will
incur any liability if they do not perform their obligations under the Unit
Deposit Agreement by reason of any present or future law, the provisions of or
governing any Deposited Securities or circumstances beyond their control. The
obligations of each of Triton Cayman, Triton Delaware and the Depositary under
the Unit Deposit Agreement are expressly limited to performing without
negligence or bad faith their respective duties specifically set forth and
undertaken by it to perform in the Unit Deposit Agreement.
If any Unit Depositary Shares are listed on one or more stock exchanges in
the United States, the Depositary will act as registrar or, with the approval of
Triton Cayman, appoint a registrar or one or more co-registrars, for registry of
the Receipts evidencing such Unit Depositary Shares in accordance with any
requirements of such exchanges. Such registrars or co-registrars may be removed
and a substitute or substitutes appointed by the Depositary upon the request or
with the approval of Triton Cayman.
The Receipts are transferrable on the register maintained by the Depositary;
provided, however, that the Depositary may close the register at any time or
from time to time when deemed expedient by it in connection with the performance
of its duties or at the request of Triton Cayman or Triton Delaware. As a
condition precedent to the execution and delivery, registration, registration of
transfer, split-up or combination of any Receipt, the delivery of any
distribution thereon (including any distributions on Class B Shares or Triton
Delaware Preferred Stock) or the withdrawal of Deposited Securities, the
Depositary, Triton Cayman or Triton Delaware may require (a) payment of (i) any
stock transfer or other tax or other governmental charge with respect to Class B
Shares, Triton Delaware Preferred Stock or other Deposited Securities and (ii)
any stock transfer or registration fee with respect thereto; (b) the production
of proof satisfactory to it of the identity and genuineness of any signature and
of such other information (including, without limitation, information as to
citizenship, residence, exchange control approval, legal or beneficial
ownership) as it may deem necessary or proper or as Triton Cayman or Triton
Delaware may require; and (c) compliance with such additional regulations as the
Depositary may establish. The delivery of Receipts against deposits of Equity
Units may be suspended, deposits of Equity Units may be refused, or the
registration of transfer of Receipts, their split-up or combination or the
withdrawal of Deposited Securities may be suspended during any period, generally
or in any particular case, when the transfer books of the Depositary are closed,
or when any such action is deemed necessary or advisable by the Depositary,
Triton Cayman or Triton Delaware for any reason.
Holders of Receipts are subject to certain provisions of Triton Cayman's
Articles of Association relating to the exercise of voting rights in connection
with Class B Shares. See "Description of Authorized Shares of Triton Cayman --
Voting Rights."
COMPARISON OF RIGHTS OF STOCKHOLDERS
The rights of stockholders of Triton Delaware are governed by Delaware law
and Triton Delaware's Certificate of Incorporation and By-Laws. After the
Reorganization, the stockholders of Triton
74
<PAGE>
Delaware will become shareholders of Triton Cayman, a Cayman Islands company,
and their rights will be governed by the Companies Law (1995 Revision) of the
Cayman Islands (the "Companies Law"), Triton Cayman's Articles of Association
and Triton Cayman's Memorandum of Association.
The principal attributes of the Triton Delaware Common Stock and the
Ordinary Shares will be similar; however, there are certain differences between
the rights of stockholders under Delaware law and Cayman Islands law, which is
modeled after that of the United Kingdom. In addition, there are certain
differences between Triton Delaware's Certificate of Incorporation and By-laws
and Triton Cayman's Articles of Association and Memorandum of Association. The
following discussion is a summary of certain changes in the rights of
stockholders resulting from the Reorganization described in this Proxy
Statement/Prospectus. This summary does not purport to be complete or to cover
all of the respects in which Cayman Islands law may differ from laws generally
applicable to Delaware corporations and their stockholders and, while Triton
Cayman and Triton Delaware believe that this summary is accurate, this summary
is subject to the complete text of the relevant provisions of the Companies Law,
the Delaware General Corporation Law ("DGCL"), Triton Delaware's Certificate of
Incorporation and By-Laws and Triton Cayman's Articles of Association and
Memorandum of Association.
STOCKHOLDER APPROVAL OF BUSINESS COMBINATIONS
Under the DGCL, there is no statutory restriction on a Delaware
corporation's ability to acquire the business of another corporation. However, a
merger or consolidation, sale, lease, exchange or other disposition of all or
substantially all of the property of the corporation (a "Disposition") not in
the usual and regular course of the corporation's business, or a dissolution of
the corporation, is required under the DGCL to be approved by the holders of a
majority of the shares entitled to vote thereon unless the charter provides
otherwise. In addition, under the DGCL, class voting rights exist with respect
to amendments to the charter that adversely affect the terms of the shares of a
class. See "Amendment of Charter" below. Such class voting rights do not exist
as to other extraordinary matters, unless the charter provides otherwise; the
Certificate of Incorporation of Triton Delaware does not provide otherwise. In
addition, the Certificate of Incorporation of Triton Delaware provides that
Delaware's statute providing for a supermajority vote in connection with certain
"business combinations" does not apply to Triton Delaware.
The Companies Law requires, the approval of the holders of at least 75
percent of the votes cast at a general meeting called for such purpose for
Triton Cayman to (i) merge, consolidate or amalgamate with another company or
(ii) reorganize or reconstruct itself pursuant to a plan sanctioned by the
Cayman Islands courts. In addition, the Articles of Association of Triton Cayman
provide that, subject to any approval required by the Companies Law or any other
law of the Cayman Islands, the approval of the holders of at least a majority of
the outstanding shares is required for Triton Cayman to (i) merge, consolidate
or amalgamate with another company, (ii) reorganize or reconstruct itself
pursuant to a plan sanctioned by the Cayman Islands courts or (iii) sell, lease
or exchange all or substantially all of its assets. An "amalgamation" is
substantially equivalent to a consolidation.
ABSENCE OF REQUIRED VOTE FOR CERTAIN MERGERS
Under the DGCL, no vote of the stockholders of a corporation surviving a
merger is required to approve a merger if (i) the agreement of merger does not
amend the charter of such corporation, (ii) each share of stock of such
corporation outstanding immediately before the merger is to be an identical
outstanding or treasury share of the surviving corporation thereafter and (iii)
the number of shares of common stock of such corporation to be issued in the
merger, if any, does not exceed 20 percent of the number of shares outstanding
immediately before the merger.
There is no equivalent provision in the Companies Law and therefore the
shareholders of the surviving company in such a situation would be entitled to
vote on the merger as described above. See " -- Stockholder Approval of Business
Combinations."
75
<PAGE>
APPRAISAL RIGHTS
Under the DGCL, a stockholder of a corporation does not have appraisal
rights in connection with a merger or consolidation or, in the case of a
Disposition, if (i) the shares of such corporation are listed on a national
securities exchange or held of record by more than 2,000 stockholders, as is
presently the case with Triton Delaware, or (ii) such corporation will be the
surviving corporation of the merger and no vote of the stockholders of the
surviving corporation is required to approve such merger, provided, however,
that a stockholder is entitled to appraisal rights in the case of a merger or
consolidation if such stockholder is required by the terms of an agreement of
merger or consolidation to accept in exchange for the shares of such stockholder
anything other than (a) shares of stock of the corporation surviving or
resulting from such merger or consolidation, (b) shares of any other corporation
that on the effective date of the merger on consolidation will be either listed
on a national securities exchange or held of record by more than 2,000
stockholders, (c) cash in lieu of fractional shares of the corporation described
in the foregoing clauses (a) and (b), or (d) any combination of the foregoing.
Triton Delaware's Common Stock is presently listed on the NYSE and Triton
Cayman's Ordinary Shares will be listed or authorized for listing upon official
notice of issuance by the NYSE.
The Companies Law does not provide for appraisal rights. However, in the
case of a court sanctioned reorganization of a Cayman Islands company as
described in "Stockholder Approval of Business Combinations", above, a
dissenting shareholder has the right to express to the court such shareholder's
view that the transaction sought to be approved would not provide the
shareholders with the fair value of their shares but (i) Triton Cayman believes
the court ordinarily would not disapprove the transaction on that ground absent
other evidence of fraud or bad faith, and (ii) if the transaction were approved
and consummated, the dissenting shareholder would have no rights comparable to
the appraisal rights (as here defined, rights to receive payments in cash for
the judicially determined value of their shares) available to dissenting
stockholders of Delaware corporations.
In addition, the Companies Law provides that where an offer is made by a
Cayman Islands company for shares of another Cayman Islands company and, within
four months of the offer, the holders of not less than 90 percent of the shares
which are the subject of the offer accept, the offeror may by notice require the
dissenting shareholders to transfer their shares on the terms of the offer. A
dissenting shareholder may apply to the court within one month of the notice
objecting to the transfer. The burden is on the dissenting shareholders to show
that the court should exercise its discretion to prevent the requirement of such
transfer, which it will be unlikely to do unless there is evidence of fraud or
bad faith or collusion as between the offeror and the holders of the shares who
have accepted the offer as a means of unfairly forcing out minority
stockholders.
STOCKHOLDER CONSENT TO ACTION WITHOUT MEETING
Under the DGCL, unless otherwise provided in the charter, any action that
can be taken at a meeting of the stockholders may be taken without a meeting if
written consent thereto is signed by the holders of outstanding stock having the
minimum number of votes necessary to authorize or take such action at a meeting
of the stockholders. Triton Delaware's Certificate of Incorporation provides
that stockholders cannot, by less than unanimous written consent, take action
without a meeting of stockholders, although after the Merger this provision will
be deleted.
The Companies Law provides that shareholders may take action requiring a
Special Resolution without a meeting only by unanimous written consent. The
Articles of Association provide that shareholders cannot, by less than unanimous
written consent, take action without a meeting of shareholders.
SPECIAL MEETINGS OF STOCKHOLDERS
Under the DGCL, a special meeting of stockholders may be called only by the
Board of Directors or by persons authorized in the charter or the bylaws. The
Bylaws of Triton Delaware provide for the call of a special meeting of
stockholders only by the President or the Secretary at the request in writing of
the majority of the Board of Directors of Triton Delaware.
76
<PAGE>
Under the Articles of Association, an extraordinary meeting may be called
only by the President or the Board of Directors of Triton Cayman.
DISTRIBUTIONS AND DIVIDENDS; REPURCHASES AND REDEMPTIONS
Under the DGCL, a corporation may pay dividends out of surplus and, if there
is no surplus, out of net profits for the current and/or the preceding fiscal
year, unless the net assets of the corporation are less than the capital
represented by issued and outstanding stock having a preference on asset
distributions. Surplus is defined in the DGCL as the excess of the net assets
over capital, as such capital may be adjusted by the board. A Delaware
corporation may purchase or redeem shares of any class except when its capital
is impaired or would be impaired by such purchase or redemption. A corporation
may, however, purchase or redeem out of capital shares that are entitled upon
any distribution of its assets to a preference over another class or series of
its stock if such shares are to be retired and the capital reduced.
Under the Companies Law, the directors may pay to the shareholders such
dividends as appear to the directors to be justified by the profits of Triton
Cayman out of the "share premium account" (similar to the concept of additional
paid in capital) if Triton Cayman has the ability to pay its debts as they
become due.
VACANCIES ON BOARD OF DIRECTORS
Under the DGCL, a vacancy and a newly created directorship may be filled by
a majority of the remaining directors, although less than a quorum, unless
otherwise provided in the charter or bylaws. Neither the Certificate of
Incorporation nor the Bylaws of Triton Delaware otherwise so provides.
The Articles of Association of Triton Cayman provide that a vacancy and a
newly created directorship may be filled by a majority of the remaining
directors, although less than a quorum.
REMOVAL OF DIRECTORS; STAGGERED TERM OF DIRECTORS
Under the DGCL, except in the case of a corporation with a classified board,
any director or the entire board may be removed, with or without cause, by the
holders of a majority of the shares entitled to vote at an election of
directors. The Certificate of Incorporation of Triton Delaware provides that the
Board of Directors will consist of three classes of directors, with each class
to consist of as nearly an equal number of directors as possible and with each
class of directors coming up for election by the stockholders every three years.
Under the DGCL, because Triton Delaware has a classified board, directors of
Triton Delaware may only be removed for cause. The Certificate of Incorporation
does not provide for a supermajority vote for removal of directors, but provides
that the provision for the staggered board may not be amended except by a
two-thirds vote of the stockholders. After the Merger, the Board of Directors
will no longer be divided into classes.
The Companies Law does not provide for classified boards of directors.
However, the Articles of Association of Triton Cayman provide that the Board of
Directors of Triton Cayman consists of three classes of directors, with each
class to consist of approximately equal numbers of directors and with each class
coming up for election by the shareholders of Triton Cayman every three years.
In addition, the Articles of Association of Triton Cayman provide that directors
may be removed only for cause by the affirmative vote of the holders of at least
a majority of the outstanding shares entitled to vote.
INSPECTION OF BOOKS AND RECORDS
Under the DGCL, any stockholder may inspect the corporation's books and
records for a proper purpose.
Shareholders of a Cayman Islands company have no general rights to inspect
or obtain copies of the list of shareholders or corporate records of a company.
However, Triton Cayman's Articles of Association provide that any shareholder
may inspect Triton Cayman's books and records for a proper purpose.
77
<PAGE>
AMENDMENT OF CHARTER
Under the DGCL, the certificate of incorporation may be amended if (i) the
board of directors sets forth the proposed amendment in a resolution, declares
the advisability of the amendment and directs that it be submitted to a vote at
the meeting of stockholders and (ii) the holders of at least a majority of
shares of stock entitled to vote thereon approve the amendment, unless the
charter requires the vote of a greater number of shares. If the holders of the
outstanding shares of a class are entitled to vote as a class upon a proposed
amendment, the holders of a majority of the outstanding shares of such class
must also vote in favor of the amendment.
Under the Companies Law, the Memorandum of Association may only be amended
by a Special Resolution of the shareholders.
AMENDMENT OF BYLAWS
Under the DGCL, the board of directors may amend bylaws if so authorized in
the charter. The stockholders of a Delaware corporation also have the power to
amend bylaws. The Certificate of Incorporation of Triton Delaware authorizes the
Board of Directors to alter, amend, repeal or adopt its bylaws.
Under the Companies Law, the Articles of Association may only be amended by
a Special Resolution of the shareholders.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Companies Law and the DGCL have different provisions and limitations
regarding indemnification by a corporation of its officers, directors, employees
and agents. If the Reorganization is approved, the Companies Law indemnification
provisions will not apply to any act or omission that occurs before the
Effective Time. The following is a summary comparison of Companies Law and DGCL
indemnification provisions:
Under the DGCL, indemnification rights are expressly non-exclusive. A
corporation is permitted to provide indemnification or advancement of expenses,
by bylaw provision, agreement or otherwise, against judgments, fines, expenses
and amounts paid in settlement actually and reasonably incurred by the person in
connection with such proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation.
The Certificate of Incorporation of Triton Delaware makes indemnification
mandatory on the part of Triton Delaware to the fullest extent permitted by law.
Cayman Islands law does not limit the extent to which a company's Articles
of Association may provide for the indemnification of officers and directors,
except to the extent that such provision may be held by the Cayman Islands
courts to be contrary to public policy (for instance, for purporting to provide
indemnification against the consequences of committing a crime). In addition, an
officer or director may not be indemnified for his own dishonesty or wilful
neglect or default.
The Articles of Association of Triton Cayman contain provisions providing
for the indemnity by Triton Cayman of an officer, director, employee or agent of
Triton Cayman to the same extent as permitted under the Certificate of
Incorporation of Triton Delaware.
LIMITED LIABILITY OF DIRECTORS
Section 102(b)(7) ("Section 102") of the DGCL permits the adoption of a
charter provision limiting or eliminating the monetary liability of a director
to a corporation or its stockholders by reason of a director's breach of the
fiduciary duty of care. Section 102 does not permit any limitation of the
liability of a director for (i) breaching the duty of loyalty to the corporation
or its stockholders, (ii) failing to act in good faith, (iii) engaging in
intentional misconduct or a known violation of law, (iv) obtaining an improper
personal benefit from the corporation or (v) paying a dividend or approving a
stock repurchase that was illegal under the DGCL. The Certificate of
Incorporation of Triton Delaware eliminates the monetary liability of a director
to the fullest extent permitted by the DGCL.
78
<PAGE>
There is no equivalent provision under the Companies Law. However, the
Articles of Association of Triton Cayman state that the directors of Triton
Cayman shall have no personal liability to Triton Cayman or its shareholders for
monetary damages for breach of fiduciary or other duties as a director, except
(i) for any breach of a director's duty of loyalty to Triton Cayman or its
shareholders, (ii) for acts or omissions not in good faith which involve
intentional misconduct or a knowing violation of law, (iii) a payment of a
dividend on stock of Triton Cayman or a purchase or redemption of stock of
Triton Cayman in violation of law, or (iv) for any transaction from which a
director derived an improper personal benefit.
STOCKHOLDERS' SUITS
Section 327 of the DGCL requires only that the stockholder bringing a
derivative suit must have been a stockholder at the time of the wrong complained
of or that the stock devolved to him by operation of law from a person who was
such a stockholder. In addition, the stockholder must remain a stockholder
throughout the litigation.
The Cayman Islands courts have recognized derivative suits by shareholders,
however, the consideration of such suits has been limited. In this regard, the
Cayman Islands courts ordinarily would be expected to follow English precedent,
which would permit a minority stockholder to commence an action against or a
derivative action in the name of the company only (i) where the act complained
of is alleged to be beyond the corporate power of the company or illegal, (ii)
where the act complained of is alleged to constitute a fraud against the
minority perpetrated by those in control of the company, (iii) where the act
requires approval by a greater percentage of the company's shareholders than
actually approved it or (iv) where there is a an absolute necessity to waive the
general rule that a stockholder may not bring such an action in order that there
not be a denial of justice or a violation of the company's memorandum of
association.
MANAGEMENT OF TRITON CAYMAN
The Board of Directors of Triton Cayman, upon the effectiveness of the
Reorganization, is to consist of those persons who, at the Effective Time, are
serving as directors of Triton Delaware, each to have the term of office for
which he or she was elected or appointed. Triton Cayman's executive officers are
now, and upon the effectiveness of the Reorganization are expected to be, the
same as those persons who are presently employed as executive officers of Triton
Delaware.
COMMITTEES OF THE BOARD OF DIRECTORS
Triton Cayman has established committees of the Board of Directors which
committees have identical members and functions as the committees of the Board
of Directors of Triton Delaware immediately prior to the Effective Time.
EXECUTIVE COMPENSATION
Triton Cayman has not paid compensation to any person before the date of
this Proxy Statement/ Prospectus and is not expected to do so prior to the
Effective Time.
LEGAL MATTERS
Certain legal matters in connection with Class A Shares and Class B Shares
to be issued in the Reorganization have been passed upon for Triton Cayman by
W.S. Walker & Company, Cayman Islands. W.S. Walker & Company has also rendered
an opinion regarding the Cayman Islands tax consequences of the Reorganization
referred to in "Certain Tax Considerations." Certain legal matters in connection
with the Triton Delaware Preferred Stock to be issued in the Reorganization have
been passed upon for Triton Delaware by Simpson Thacher & Bartlett (a
partnership which includes professional corporations) New York, New York. The
opinions regarding the United States federal tax consequences of the
Reorganization referred to in "Certain Tax Considerations" were rendered by
Simpson Thacher & Bartlett and Weil, Gotshal & Manges LLP (a partnership which
includes professional corporations), New York, New York.
79
<PAGE>
EXPERTS
The financial statement of Triton Cayman as of December 31, 1995 included in
this Proxy Statement/Prospectus has been so included in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
The restated consolidated financial statements of Triton Delaware as of and
for the seven months ended December 31, 1994 and the years ended May 31, 1994
and 1993, incorporated herein by reference to Triton Delaware's Current Report
on Form 8-K dated August 24, 1995 appearing on pages F-1 through F-54, have been
so incorporated in reliance upon the report (which included an audit of the
adjustments that were applied to restate the 1992 financial statements for
discontinued aviation sales and services operations and wholesale fuel products
operations as described in Notes 1 and 4 of the financial statements) of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
With respect to the unaudited consolidated condensed financial information
of Triton Delaware and its subsidiaries (i) for the three month periods ended
March 31, 1995 and 1994, which include financial statements that have not been
restated to reflect the aviation sales and services segment as discontinued
operations, (ii) for the three and six month periods ended June 30, 1995 and
1994, and (iii) for the three and nine month periods ended September 30, 1995
and 1994 incorporated by reference in this Proxy Statement/Prospectus, Price
Waterhouse LLP reported that they have applied limited procedures in accordance
with professional standards for a review of such information. However, their
separate reports dated May 2, 1995, August 1, 1995 and October 31, 1995 included
in Triton Delaware's quarterly reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995, and September 30, 1995, respectively, and incorporated
by reference herein, state that they did not audit and they did not express an
opinion on the referenced unaudited consolidated condensed financial
information. Price Waterhouse LLP did not carry out any significant or
additional tests beyond those which would have been necessary if their reports
had not been included. Accordingly, the degree of reliance on their reports on
such information should be restricted in light of the limited nature of their
review procedures applied. Price Waterhouse LLP is not subject to the liability
provisions of section 11 of the Securities Act of 1933, as amended, for their
reports on the unaudited consolidated condensed financial information because
such reports are not a "report" or a "part" of the Registration Statement
prepared or certified by Price Waterhouse LLP within the meaning of sections 7
and 11 of the 1933 Act.
The consolidated statements of operations, shareholders' equity and cash
flows of Triton Delaware for the year ended May 31, 1992 (before restatement for
discontinued aviation sales and services operations and wholesale fuel products
operations), incorporated herein by reference to Triton Delaware's Current
Report on Form 8-K dated August 24, 1995, have been so incorporated in reliance
upon the report of KPMG Peat Marwick LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated statements of earnings, shareholders' equity and cash flows
of Crusader Limited for the year ended May 31, 1992, incorporated herein by
reference to Triton Delaware's Transition Report on Form 10-K for the seven
months ended December 31, 1994, have been so incorporated in reliance upon the
report of KPMG, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
Certain information with respect to the gas and oil reserves of Triton
Delaware and its subsidiaries derived from the report of DeGolyer and
MacNaughton, independent petroleum engineers, has been incorporated by reference
herein in reliance upon such firm as experts with respect to the matters
contained therein.
80
<PAGE>
Certain information with respect to the gas and oil reserves of Triton
Delaware and its subsidiaries derived from the report of McDaniel & Associates
Consultants, Ltd., independent petroleum engineers, has been incorporated by
reference herein in reliance upon such firm as experts with respect to the
matters contained therein.
FORWARD LOOKING INFORMATION
Triton Cayman and Triton Delaware desire to take advantage of the new "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995. This
Act only became law in late December 1995 and, except for the Conference Report,
no official interpretations of the Act's provisions have been published.
Statements included or incorporated by reference in this Proxy Statement/
Prospectus looking forward in time involve risks and uncertainties, including
fluctuations in oil prices; certain other risks normally associated with the
exploration for and production of oil and gas, including blowouts, cratering,
pollution, earthquakes, labor disruptions and fires; risks inherent in foreign
operations, including loss of revenue, property and equipment from such hazards
as expropriation, nationalization, war, insurrection and other political risks,
as well as risks of increase in taxes and governmental royalties, renegotiation
of contracts with governmental entities, as well as changes in laws and policies
governing operations of foreign based companies; and other risk factors detailed
under "Risk Factors."
81
<PAGE>
GLOSSARY OF DEFINED TERMS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Articles of Association................................................................................... 54
CFC....................................................................................................... 53
Calculation Date.......................................................................................... 62
Certificate of Incorporation.............................................................................. 65
Charter................................................................................................... 66
Class A Shares............................................................................................ 1
Class B Shares............................................................................................ 1
Class C Shares............................................................................................ 55
Closing Price............................................................................................. 67
Code...................................................................................................... 48
Commission................................................................................................ 3
Companies Law............................................................................................. 74
Conversion Rate........................................................................................... 64
Convertible Preference Shares............................................................................. 11
Convertible Preferred Stock............................................................................... 11
Cumulative Dividend Amount................................................................................ 57
Depositary................................................................................................ 1
Deposited Securities...................................................................................... 69
Designation............................................................................................... 66
Disposition............................................................................................... 75
Dividend Provision........................................................................................ 57
DGCL...................................................................................................... 19
Effective Time............................................................................................ 12
Electing Shares........................................................................................... 11
Election Date............................................................................................. 12
Equity Unit............................................................................................... 1
Equity Unit Election...................................................................................... 1
Equity Unit Limitation.................................................................................... 1
Exchange Act.............................................................................................. 2
Exchange Agent............................................................................................ 17
Fair Market Value......................................................................................... 67
Form of Election.......................................................................................... 12
J.P. Morgan............................................................................................... 11
Junior Dividend Shares.................................................................................... 62
Junior Dividend Stock.....................................................................................
Junior Preference Shares.................................................................................. 64
IRS....................................................................................................... 5
Lehman.................................................................................................... 11
Liquidation Available Amount.............................................................................. 58
Liquidation Preference.................................................................................... 66
Liquidation Price......................................................................................... 62
Mailing Date.............................................................................................. 46
Maximum Election Number................................................................................... 6
Memorandum of Association................................................................................. 54
Merger.................................................................................................... 1
Merger Agreement.......................................................................................... 1
Minimum Election Number................................................................................... 6
1997 Notes................................................................................................ 24
NYSE...................................................................................................... 1
</TABLE>
82
<PAGE>
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Offerer................................................................................................... 57
Ordinary Shares........................................................................................... 13
PFICs..................................................................................................... 53
Pairing Ratio.............................................................................................
Parity Dividend Shares.................................................................................... 62
Penalty Dividend.......................................................................................... 62
Proration Factor.......................................................................................... 6
Proxy Card................................................................................................ 15
Proxy Statement/Prospectus................................................................................ 1
Purchase Date............................................................................................. 67
Purchase Price............................................................................................ 67
Rights....................................................................................................
Receipts..................................................................................................
Registration Statement.................................................................................... 3
Receipts.................................................................................................. 1
Reorganization............................................................................................ 1
Resolutions............................................................................................... 54
Rights Agreement.......................................................................................... 54
Senior Dividend Shares.................................................................................... 62
SDLA...................................................................................................... 25
Section 102............................................................................................... 79
Securities Act............................................................................................ 3
Senior Liquidation Shares................................................................................. 63
Senior Liquidation Stock.................................................................................. 67
Shareholder Rights Plan................................................................................... 47
Special Meeting........................................................................................... 1
Special Tax Counsel....................................................................................... 47
Specified Amount.......................................................................................... 59
Sub....................................................................................................... 1
TIN....................................................................................................... 53
Trading Day............................................................................................... 67
Triton Cayman............................................................................................. 1
Triton Delaware........................................................................................... 1
Triton Delaware Common Stock.............................................................................. 1
Triton Delaware Preferred Stock........................................................................... 1
Triton France............................................................................................. 40
2000 Notes................................................................................................ 24
Unit Deposit Agreement.................................................................................... 69
Unit Depositary Shares.................................................................................... 1
U.S. Holder............................................................................................... 47
U.S. Shareholder.......................................................................................... 53
</TABLE>
83
<PAGE>
TRITON ENERGY LIMITED
INDEX TO FINANCIAL STATEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Triton Energy Limited:
Report of Independent Accountants.......................................................................... F-2
Balance Sheet as of December 31, 1995...................................................................... F-3
Notes to Balance Sheet..................................................................................... F-4
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and
Shareholder of Triton Energy Limited
In our opinion, the accompanying balance sheet presents fairly, in all material
respects, the financial position of Triton Energy Limited at December 31, 1995
in conformity with generally accepted accounting principles. This financial
statement is the responsibility of the Company's management; our responsibility
is to express an opinion on this financial statement based on our audit. We
conducted our audit of this statement in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Dallas, Texas
February 8, 1996
F-2
<PAGE>
TRITON ENERGY LIMITED
BALANCE SHEET
DECEMBER 31, 1995
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<S> <C>
SHAREHOLDER'S EQUITY
Preferred stock, par value $1, authorized 5,000,000 shares......................... $ --
Common stock, par value $1, authorized 200,000,000 shares; issued 1,000............ 1,000
Subscription receivable.......................................................... (1,000)
---------
Total shareholder's equity..................................................... $ --
---------
---------
</TABLE>
See accompanying notes to balance sheet.
F-3
<PAGE>
TRITON ENERGY LIMITED
NOTES TO BALANCE SHEET
1. GENERAL
Triton Energy Limited (formerly named TC Holdings Limited, "Triton Cayman"),
a wholly-owned subsidiary of Triton Energy Corporation ("Triton Delaware"), a
Delaware Corporation, was incorporated on August 23, 1995 under the laws of the
Cayman Islands. Triton Cayman was formed to become the ultimate holding company
of Triton Delaware if the Board of Directors of Triton Delaware and the
stockholders of Triton Delaware approve such transaction. Triton Delaware is an
international oil and gas exploration company primarily engaged in exploration
and production through subsidiaries and affiliates. Triton Delaware's principal
properties and operations are located in Colombia and Malaysia-Thailand. Triton
Delaware also has oil and gas interests in other Latin American and Asian
countries, Europe, Australia and North America.
Triton Cayman had no operations from the date of incorporation on August 23,
1995 to December 31, 1995.
2. TAXATION
Under current Cayman Islands law, Triton Cayman is not required to pay any
Cayman Islands taxes on either income or capital gains. Triton Cayman has
applied for and expects to receive an Undertaking as to Tax Concessions
Certificate to be issued by the Governor-in-Council pursuant to the provisions
of the Tax Concessions Law which would provide that Triton Cayman would not be
subject to any future income or capital gains taxes which may be imposed for a
period of twenty years beginning on the date of the Undertaking.
F-4
<PAGE>
PRELIMINARY COPY
TRITON ENERGY CORPORATION
PROXY -- SPECIAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Thomas G. Finck and Robert B. Holland, III,
each with power to act without the other and with full power of substitution, as
Proxies to represent and to vote, as designated on the reverse side, all stock
of Triton Energy Corporation owned by the undersigned at the Special Meeting of
Stockholders to be held at the offices of Triton Energy Corporation, 6688 North
Central Expressway, 12th Floor, Dallas, Texas 75206, on , ,
1996, a.m., local time, upon such business as may properly come before
the meeting or any adjournment thereof including the following as set forth on
the reverse side.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO SPECIFIC DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR THE ADOPTION OF THE AGREEMENT AND PLAN OF MERGER (AS
DESCRIBED ON THE REVERSE SIDE) AND AT THE DISCRETION OF THE PROXY HOLDERS WITH
REGARD TO ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
(Continued, and to be signed and dated, on reverse side)
<PAGE>
<TABLE>
<S> <C>
Please mark
your copies
X like this.
</TABLE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
<TABLE>
<S> <C>
1. Adoption of the Agreement and Plan of 2. In their discretion on any other matter
Merger among Triton Energy Corporation that may properly come before the meeting or
("Triton"), Triton Energy Limited and any adjournment thereof.
TEL Merger Corp. ("Sub") providing for the
merger of Sub with and into Triton, as
more fully described in the accompanying
Proxy Statement/Joint Prospectus.
</TABLE>
FOR / / AGAINST / / ABSTAIN / /
Please date, sign exactly as shown
hereon and mail promptly this proxy in
the enclosed envelope. When there is
more than one owner, each should sign.
When signing as an attorney,
administrator, executor, guardian or
trustee, please add your title as such.
If executed by a corporation, the proxy
should be signed by a duly authorized
officer. If executed by a partnership,
please sign in the partnership name by
an authorized person.
Signature___________________ Date_______
Signature___________________ Date_______
