As filed with the Securities and Exchange Commission on September 9, 1996
Registration No. 333-_____, 333-______
- ---------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_________________________
TRITON ENERGY LIMITED TRITON ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Cayman Islands Delaware
(State or other jurisdiction of incorporation)
None 75-1151855
(I.R.S. Employer Identification No.)
1311
(Primary Standard Industrial Classification Code Number)
Caledonian House, 6688 North Central Expressway
Mary Street, P.O. Box 1043 Suite 1400
George Town Dallas, Texas 75206-9926
Grand Cayman, Cayman Islands (214) 691-5200
(809) 949-0050
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
_________________________
Robert B. Holland, III, Esq.
Triton Energy Corporation
6688 North Central Expressway
Suite 1400
Dallas, Texas 75206-9926
(214) 691-5200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_________________________
Copies to:
Vincent Pagano, Jr., Esq. David J. Graham, Esq.
Simpson Thacher & Bartlett Andrews & Kurth L.L.P.
425 Lexington Avenue 4200 Texas Commerce Tower
New York, New York 10017-3909 Houston, Texas 77002
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box./X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered unit price registration fee
--------------------------- ------------ ------------------ ------------------ ----------------
Debt Securities, Ordinary Shares,
Preference Shares, Warrants<F1> . . . . $200,000,000<F2> 100%<F3> $200,000,000<F2><F3> $68,966<F4>
Guarantees of Triton Energy Limited of
Debt Securities and Warrants of Triton
Energy Corporation . . . . . . . . . . <F5> <F5> <F5> None
<FN>
<F1> The Debt Securities registered hereby include such additional amount as
may be necessary so that, if Debt Securities are issued with an original
issue discount, the aggregate initial offering prices of all Debt
Securities will equal $200,000,000. The Ordinary Shares registered hereby
include Preference Share Purchase Rights (the "Rights"). The Rights are
associated with and trade with the Ordinary Shares. The value, if any,
attributable to the Rights is reflected in the market price of the
Ordinary Shares. There are also being registered hereunder an
indeterminate number of Ordinary Shares as shall be issuable upon
conversion or redemption of Preference Shares or Debt Securities
registered hereby.
<F2> In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$200,000,000. Any securities registered hereunder may be sold separately
or as units with other securities registered hereunder.
<F3> Estimated solely for the purpose of calculating the registration fee.
<F4> Calculated pursuant to Section 6(b).
<F5> No separate consideration will be received for the Guarantees.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus herein also relates to the $127,799,200 of Common Stock, Preferred
Stock, Debt Securities and Warrants registered on Form S-3 (Registration No.
33-55347) of Triton Energy Corporation and $172,200,800 of Debt Securities
registered on Form S-3 (Registration No. 33-69230) of Triton Energy
Corporation. This Registration Statement also constitutes Post-Effective
Amendment No. 2 to Registration Statement No. 33-55347 and Post-Effective
Amendment No. 3 to Registration Statement No. 33-69230, and upon the
effectiveness of such Post-Effective Amendments, this Registration Statement
and Registration Statement No. 33-55347 and No. 33-69230 will relate to an
aggregate of $300,000,000 of Debt Securities of Triton Energy Corporation
guaranteed by Triton Energy Limited and Warrants guaranteed by Triton Energy
Limited to purchase such Debt Securities and an aggregate of $200,000,000 of
Ordinary Shares, Preference Shares, Warrants to purchase Ordinary Shares and
Preference Shares, Debt Securities and Warrants to purchase Debt Securities of
Triton Energy Limited.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
EXPLANATORY NOTE
This Registration Statement consists of two separate Prospectuses, covering
registration of:
(1) (A) Debt Securities, Ordinary Shares, Preference Shares and Warrants of
Triton Energy Limited, (B) Debt Securities and Warrants of Triton Energy
Corporation and (C) Guarantees of Triton Energy Limited of Debt Securities and
Warrants of Triton Energy Corporation;
(2) Ordinary Shares to be issued pursuant to the Dividend Reinvestment and
Stock Purchase Plan of Triton Energy Limited.
_______________________________________________________________________________
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.
_______________________________________________________________________________
Subject to Completion, dated September 9, 1996
PROSPECTUS
Triton Energy Limited
Preference Shares
Ordinary Shares
Warrants to Purchase Preference Shares
Warrants to Purchase Ordinary Shares
Debt Securities
Warrants to Purchase Debt Securities
Triton Energy Corporation
Guaranteed Debt Securities
Guaranteed Warrants to Purchase Debt Securities
_________________________
Triton Energy Limited ("TEL" or the "Company") may offer and sell from
time to time, in one or more series, (i) its preference shares, par value $.01
per share (the "Preference Shares"), (ii) its Ordinary Shares, par value $.01
per share (the "Ordinary Shares"), (iii) unsecured debt securities consisting
of notes, debentures or other evidences of indebtedness (the "TEL Debt
Securities") which may be senior ("TEL Senior Debt Securities"), senior
subordinated ("TEL Senior Subordinated Debt Securities") or subordinated ("TEL
Subordinated Debt Securities"),and (iv) warrants to purchase Preference Shares,
Ordinary Shares or TEL Debt Securities (the "TEL Warrants"), or any combination
of the foregoing.
Triton Energy Corporation, a wholly owned subsidiary of TEL ("TEC"), may
offer and sell from time to time, in one or more series, (i) its unsecured debt
securities consisting of notes, debentures or other evidences of indebtedness
(the "TEC Debt Securities", and together with the TEL Debt Securities, the
"Debt Securities") which may be senior ("TEC Senior Debt Securities", and
together with the TEL Senior Debt Securities, the "Senior Debt Securities") or
senior subordinated ("TEC Senior Subordinated Debt Securities", and together
with the TEL Senior Subordinated Debt Securities, the "Senior Subordinated Debt
Securities") and which will be fully and unconditionally guaranteed by TEL (the
"Debt Guarantee") and (ii) warrants, which will be fully and unconditionally
guaranteed by TEL (the "Warrant Guarantee" and, together with the Debt
Guarantee, the "Guarantee") to purchase TEC Debt Securities (the "TEC Warrants"
and, together with the TEL Warrants, the "Warrants"), or any combination of the
foregoing.
The Preference Shares, Ordinary Shares, Debt Securities, Guarantee and
Warrants are collectively referred to as the "Securities". The Preference
Shares, Ordinary Shares, TEL Debt Securities and TEL Warrants may be offered at
an aggregate initial offering price not to exceed $200,000,000 and the TEC Debt
Securities and TEC Warrants may be offered at an aggregate initial offering
price not to exceed $300,000,000, in each case at prices and on terms to be
determined at or prior to the time of sale.
Specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus Supplement
("Prospectus Supplement"), together with the terms of the offering of the
Securities and the initial price and the net proceeds to TEL or TEC, as the
case may be, from the sale thereof. The Prospectus Supplement will set forth
with regard to the particular Securities, without limitation, the following:
(i) in the case of Debt Securities, the specific designation, aggregate
principal amount, ranking as senior debt, senior subordinated debt or
subordinated debt, maturity, rate or rates (or method of determining the same)
and time or times for the payment of interest, if any, any terms for optional
or mandatory redemption or repurchase or sinking fund provisions, any
conversion or exchange rights, (ii) in the case of Preference Shares, the
designation, number of shares, liquidation preference per share, initial public
offering price, dividend rate (or method of calculation thereof), dates on
which dividends shall be payable and dates from which dividends shall accrue,
any redemption or sinking fund provisions, any conversion or exchange rights,
(iii) in the case of Ordinary Shares, the number of Ordinary Shares and the
terms of the offering and sale thereof and (iv) in the case of Warrants, the
number and terms thereof, the designation and the number of securities issuable
upon their exercise, the exercise price, the terms of the offering and sale
thereof and, where applicable, the duration and detachability thereof.
The Securities may be sold directly by TEL or TEC to investors, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution." If any agents of TEL or TEC or any underwriters
are involved in the sale of any Securities in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the Prospectus Supplement.
For a discussion of certain risk factors that should be considered by
prospective investors, see "Risk Factors," beginning on page 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_________________________
The date of this Prospectus is , 1996.
AVAILABLE INFORMATION
TEL 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 TEL 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 the web site
(http://www.sec.gov.) maintained by the Commission; 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. Such material may also be inspected and copied at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York
10005.
As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information contained in the Registration Statement on
Form S-3, as amended (the "Registration Statement"), of which this Prospectus
is a part. For further information with respect to the Company and the
Securities offered hereby, reference is made to the Registration Statement and
the exhibits thereto. Statements made in this Prospectus as to the contents of
any contract, agreement or other document are not necessarily complete; and
while the Company believes the descriptions of the material provisions of such
contracts, agreements and other documents contained in this 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following documents previously filed with the Commission pursuant to the
Exchange Act: (i) TEC 's Annual Report on Form 10-K for the year ended December
31, 1995, (ii) TEC 's Current Report on Form 8-K dated February 9, 1996, (iii)
TEL's Current Reports on Form 8-K dated May 20, 1996, July 2, 1996 and
September 9, 1996, (iv) TEL's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 and June 30, 1996, and (v) the description of the Ordinary
Shares contained in TEL's Registration Statement on Form 8-A, dated March 25,
1996, as amended by Form 8-A/A, dated August 14, 1996.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities pursuant hereto shall be
deemed to be incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained in this Prospectus or in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to
the extent that a statement contained in this Prospectus or in any subsequently
filed document that also is or is deemed to be incorporated by reference in
this 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
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents that are incorporated by reference in this
Prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Investor Relations, Triton Energy, 6688 North Central Expressway,
Suite 1400, Dallas, Texas 75206-9926, telephone (214) 691-5200.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
The Company 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 TEL 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, TEL
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, TEL's United
States agent appointed for that purpose. TEL 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 TEL that are predicated upon the
civil liability provisions of the Securities Act or (b) in original actions
brought against TEL 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.
THE COMPANY
The Company is an international oil and gas exploration company primarily
engaged in exploration and production through subsidiaries and affiliates. The
Company's principal properties and operations are located in Colombia and
Malaysia-Thailand. The Company also has oil and gas interests in other Latin
American, European and Asian countries.
TEL was formed in the Cayman Islands in 1995 and became the parent holding
company of TEC through the merger (the "Merger") of a subsidiary of TEL with
and into TEC . The Merger was consummated on March 25, 1996. In connection with
the Merger, each share of common stock, par value $1.00 per share, of TEC , was
converted into one Ordinary Share. TEL's principal executive offices are
located at Caledonian House, Mary Street, P.O. Box 1043, George Town, Grand
Cayman, Cayman Islands and its telephone number is (809) 949-0050.
TEC was incorporated in Delaware in 1995 and is the successor by merger
to Triton Energy Corporation, a Texas corporation, incorporated in 1962. TEC 's
principal executive offices are located at 6688 North Central Expressway, Suite
1400, Dallas, Texas 75206-9926 and its telephone number is (214) 691-5200. The
"Company" refers collectively to TEL and its consolidated subsidiaries,
including TEC.
RISK FACTORS
Certain statements included or incorporated by reference in this
Prospectus, such as proven oil and gas reserves, are forward-looking statements
(as such term is used in the Private Securities Litigation Reform Act of 1995),
and the factors discussed hereunder could cause actual results and developments
to be materially different from those expressed in or implied by such
statements. Accordingly, in addition to the other information set forth in or
incorporated by reference in this Prospectus and any applicable Prospectus
Supplement, potential investors in the Securities should consider the following
investment considerations.
The Oil and Gas Industry Generally. The Company's strategy is to focus its
exploration activities on what the Company believes are relatively high
potential prospects. No assurance can be given that these prospects contain
significant oil and gas reserves or that the Company will be successful in its
exploration activities thereon. The Company follows the full cost method of
accounting for exploration and development of oil and gas reserves whereby all
productive and nonproductive costs are capitalized. Costs related to
acquisition, holding and initial exploration of concessions in countries with
no proved reserves are initially capitalized, including internal costs directly
identified with acquisition, exploration and development activities. The
Company's exploration concessions are periodically assessed for impairment on a
country by country basis. If the Company's investment in exploration
concessions within a country where no proved reserves are assigned is deemed to
be impaired, the concessions are written down to estimated recoverable value.
If the Company abandons all exploration efforts in a country where no proved
reserves are assigned, all exploration costs associated with the country are
expensed. The Company's assessments of whether its investment within a country
is impaired and whether exploration activities within a country will be
abandoned are made from time to time based on its review and assessment of
drilling results, seismic data and other information it deems relevant. Due to
the unpredictable nature of exploration drilling activities, the amount and
timing of impairment expense are difficult to predict with any certainty.
Financial information concerning the Company's assets, including capitalized
costs by geographic area, is set forth in Note 21 of Notes to Consolidated
Financial Statements in TEC 's Annual Report on Form 10-K for the year ended
December 31, 1995.
The markets for oil and natural gas historically have been volatile and
are likely to continue to be volatile in the future. Oil and natural gas prices
have been subject to significant fluctuations during the past several decades
in response to relatively minor changes in the supply of and demand for oil and
natural gas, market uncertainty and a variety of additional factors that are
beyond the control of the Company. These factors include the level of consumer
product demand, weather conditions, domestic and foreign government
regulations, political conditions in the Middle East and other production
areas, the foreign supply of oil and natural gas, the price and availability of
alternative fuels, and overall economic conditions. It is impossible to predict
future oil and gas price movements with any certainty.
The Company's oil and gas business is also subject to all of the operating
risks normally associated with the exploration for and production of oil and
gas, including, without limitation, blowouts, cratering, pollution,
earthquakes, labor disruptions and fires, each of which could result in
substantial losses to the Company due to injury or loss of life and damage to
or destruction of oil and gas wells, formations, production facilities or other
properties. In accordance with customary industry practices, the Company
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 the Company.
There can be no assurance that any insurance will be adequate to cover losses
or liabilities. The Company cannot predict the continued availability of
insurance, or its availability at premium levels that justify its purchase.
The Company's oil and gas business is also subject to laws, rules and
regulations in the countries in which the Company operates, which generally
pertain to production control, taxation, environmental and pricing concerns and
other matters relating to the petroleum industry. Many jurisdictions have at
various times imposed limitations on the production of oil and natural gas by
restricting the rate of flow for oil and natural gas wells below their actual
capacity. There can be no assurance that present or future regulation will not
adversely affect the operations of the Company.
Moreover, because the Company 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 was the operator or owner of a majority interest. Any
inability of the Company to meet its obligations in these and other contract
areas could have a material adverse effect on its interests in these contract
areas.
Financial Position. The Company reported income from continuing operations of
$24 million for the six months ended June 30, 1996 and $6.5 million for the
year ended December 31, 1995, but losses from continuing operations in the
seven month transition period ended December 31, 1994 and in each of the last
four fiscal years in the period ended May 31, 1994. To date, working capital
(amounting to $30.3 million as of June 30, 1996), external sources of funding,
asset sales and net cash flow from operations have been sufficient to service
the Company's existing debt obligations and capital spending programs. The
Company expects to pursue external financing alternatives and may from time to
time consider dispositions 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 the Company 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 the Company could realize therefrom. Moreover, the
Company's ability to pursue additional debt financing is limited by covenants
in the Company's credit facility as well as covenants in the indenture pursuant
to which $240 million principal amount of TEC 's 12 1/2% 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 TEC 's 9 3/4%
Senior Subordinated Discount Notes due 2000 (the "2000 Notes") were issued in
1993.
For information regarding the Company's financial position and results of
operations, including the amounts of previous losses, the Company's net working
capital from time to time, and the Company's ratios of earnings to fixed
charges and earnings to combined fixed charges and preference dividends, see
"Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and
Preference Dividends" herein and TEC 's Consolidated Statements of Operations,
Consolidated Balance Sheets and Consolidated Statements of Cash Flows in TEC 's
Annual Report on Form 10-K and other documents incorporated herein by
reference, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in TEC 's Annual Report on Form
10-K for the year ended December 31, 1995 and in TEL's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996.
Environmental Matters. The Company 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 the Company to remove or
mitigate the environmental effects of the disposal or release of such materials
at various sites. The Company 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 the Company's
consolidated results of operations, cash flows or financial position. Pollution
and similar environmental risks generally are not fully insurable.
Risks of International Operations. The Company derives substantially all of its
consolidated revenues from international operations. Risks inherent in
international operations include loss of revenue, property and equipment from
such hazards as expropriation, nationalization, war, insurrection and other
political risks; trade protection measures; risks of increases in taxes and
governmental royalties; and renegotiation of contracts with governmental
entities; as well as changes in laws and policies governing operations of other
companies. Other risks inherent in international operations are the possibility
of realizing economic currency exchange losses when transactions are completed
in currencies other than United States dollars and the Company's ability to
freely repatriate its earnings under existing exchange control laws.
Certain Factors Relating to Colombia. The Company 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. The Company owns interests in three contiguous
areas known as the Santiago de las Atalayas ("SDLA"), Tauramena and Rio
Chitamena contract areas. Well results to date indicate that significant oil
and gas deposits lie across the SDLA, Tauramena and Rio Chitamena 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. The Company 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, the Company 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 the Company is not the operator of these contract areas,
the Company does not control the timing or manner of these operations.
Full development of reserves in the Cusiana and Cupiagua fields will take
more than one year 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 and expanded
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, the Company 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.
Numerous Colombian government officials, including the President of
Colombia, are the subjects of investigations and allegations that claim they
have accepted illegal campaign contributions. These circumstances have led to
speculation as to whether these officials will remain in office. The President
of Colombia has stated that any such illicit contributions were made without
his knowledge. In response to the allegations, the leadership of the opposition
Conservative Party withdrew its support of the Government and certain cabinet
ministers and ambassadors and a high ranking military officer resigned. Any
changes in the holders of significant government offices could have adverse
consequences on the Company's relationship with the Colombian national oil
company and the Colombian government's ability to control guerilla activities,
and could exacerbate the factors relating to foreign operations discussed
above. Colombia is also among 31 nations whose progress in stemming the
production and transit of illegal drugs is subject to annual certification by
the President of the United States. In March 1996, the President of the United
States announced that Colombia would neither be certified nor granted a
national interest waiver. The consequences of the failure to receive
certification generally include the following: all bilateral aid, except anti-
narcotics and humanitarian aid, has been or will be suspended; the Export-
Import Bank of the United States ("EXIM") and the Overseas Private Investment
Corporation will not approve financing for new projects in Colombia, although
currently approved EXIM financings are not expected to be affected; U.S.
representatives at multilateral lending institutions will be required to vote
against all loan requests from Colombia, although such votes will not
constitute vetoes; and the President of the United States and Congress retain
the right to apply future trade sanctions. Each of these consequences of the
failure to receive such certification could result in adverse economic
consequences in Colombia and could further heighten the political and economic
risks associated with the Company's operations in Colombia.
Certain Factors Relating to Malaysia-Thailand. The Company is a partner in a
significant gas exploration project located in the upper Malay Basin in the
Gulf of Thailand approximately 450 kilometers northeast of Kuala Lumpur and 750
kilometers south of Bangkok. The Company is a contractor under a production
sharing contract covering Block A-18 of the Malaysia-Thailand Joint Development
Area. Test results for the initial exploratory wells indicate that significant
gas deposits lie under the block.
Development of gas production is in the early planning stages but is
expected to take several years and require the drilling of additional wells and
the installation of production facilities, which will require significant
additional capital expenditures, the ultimate amount of which cannot be
predicted. Pipelines will also be required to be connected between Block A-18
and ultimate markets. The terms on which any gas produced from the Company's
contract area in Malaysia-Thailand may be sold may be adversely affected by the
present monopoly gas purchase and transportation conditions in both Thailand
and Malaysia, including the Thai national oil company's monopoly in
transportation within Thailand and its territorial waters.
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the net
proceeds from the sale of the particular Securities offered by this Prospectus
and each Prospectus Supplement (the "Offered Securities") will be used
principally to continue funding the Company's obligations relating to the
development of its operations in Colombia and Malaysia-Thailand.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS
For purposes of computing the ratios of earnings to fixed charges and
earnings to combined fixed charges and preference dividends, earnings consist
of earnings (loss) from continuing operations before income taxes, minority
interest, extraordinary items and cumulative effect of accounting changes,
plus fixed charges (interest charges and preference share dividend requirements
of subsidiaries, adjusted to a pretax basis), less interest capitalized, less
preference share dividend requirements of subsidiaries adjusted to a pretax
basis and less undistributed earnings of affiliates whose debt is not
guaranteed by the Company.
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preference dividends for the Company for
the periods indicated:
Seven
Six Months Months
Ended Year Ended Ended
June 30, December 31, December 31, Years Ended May 31,
1996 1995 1995 1994 1994 1993 1992 1991
Ratio of earnings
to fixed
charges . . . . . 1.7x 1.1x 1.1x <F1> <F1> <F1> <F1> 1.3x
Ratio of earnings
to combined
fixed charges
and preference
dividends . . . . 1.6x 1.1x 1.0x <F2> <F2> <F2> <F2> 1.1x
____________________
<FN>
<F1> Earnings were inadequate to cover fixed charges for the seven months
ended December 31, 1994 by $30,565,000 and for the years ended May 31,
1994, 1993 and 1992 by $40,976,000, $152,391,000 and $92,875,000,
respectively. Without nonrecurring items, earnings would have been
inadequate to cover fixed charges for the six months ended June 30, 1995
by $8,195,000, for the year ended December 31, 1995 by $9,921,000, the
seven months ended December 31, 1994 by $29,581,000 and for the years
ended May 31, 1994, 1993, 1992 and 1991 by $51,415,000, $45,183,000,
$32,301,000 and $11,906,000, respectively.
<F2> Earnings were inadequate to cover fixed charges and preference dividends
for the seven months ended December 31, 1994 by $31,014,000 and for the
years ended May 31, 1994, 1993 and 1992 by $40,976,000, $152,391,000 and
$94,261,000, respectively. Without nonrecurring items, earnings would
have been inadequate to cover fixed charges and preference dividends for
the six months ended June 30, 1995 by $8,644,000, for the year ended
December 31, 1995 by $10,723,000, for the seven months ended December
31, 1994 by $30,030,000, and for the years ended May 31, 1994, 1993,
1992 and 1991 by $51,415,000, $45,183,000, $33,687,000 and $17,452,000,
respectively.
DESCRIPTION OF DEBT SECURITIES
The TEC Debt Securities will be unsecured senior or senior subordinated
debt of TEC and will be issued, in the case of TEC Senior Debt Securities,
under a Senior Indenture (the "TEC Senior Debt Indenture") among TEC, TEL, as
guarantor, and The Chase Manhattan Bank, as trustee, and in the case of TEC
Senior Subordinated Debt Securities, under a Senior Subordinated Indenture (the
"TEC Senior Subordinated Debt Indenture") among TEC, TEL, as guarantor, and
United States Trust Company of New York, as trustee. The TEC Senior Debt
Indenture and the TEC Senior Subordinated Debt Indenture are sometimes
hereinafter referred to individually as a "TEC Indenture" and collectively as
the "TEC Indentures." The TEL Debt Securities will be unsecured senior, senior
subordinated or subordinated debt of TEL and will be issued, in the case of TEL
Senior Debt Securities, under a Senior Indenture (the "TEL Senior Debt
Indenture") between TEL and The Chase Manhattan Bank, as trustee, in the case
of TEL Senior Subordinated Debt Securities, under a Senior Subordinated
Indenture (the "TEL Senior Subordinated Debt Indenture") between TEL and United
States Trust Company of New York, as trustee, and in the case of TEL
Subordinated Debt Securities, under a Subordinated Indenture (the "TEL
Subordinated Debt Indenture") between TEL and The Chase Manhattan Bank, as
Trustee. The TEL Senior Debt Indenture, the TEL Senior Subordinated Debt
Indenture and the TEL Subordinated Debt Indenture are sometimes hereinafter
referred to individually as a "TEL Indenture" and collectively as the "TEL
Indentures." The TEC Senior Indenture and the TEL Senior Indenture are
sometimes collectively referred to individually as a "Senior Debt Indenture"
and collectively as the "Senior Debt Indentures." The TEC Senior Subordinated
Debt Indenture and the TEL Senior Subordinated Debt Indenture are sometimes
referred to individually as a "Senior Subordinated Debt Indenture" and
collectively as the "Senior Subordinated Debt Indentures". The TEC Indentures
and the TEL Indentures are sometimes referred to individually as an "Indenture"
and collectively as the "Indentures". None of the Indentures limits the
amount of Debt Securities that may be issued thereunder and the Indentures
provide that the Debt Securities may be issued from time to time in one or more
series. The Indentures permit the appointment of a different trustee for each
series of Debt Securities. As used herein, the term "Trustee" means The Chase
Manhattan Bank or United States Trust Company of New York, as the case may be.
If there is at any time more than one trustee under any Indenture, the term
"Trustee" as used in this Prospectus will mean each such trustee and will apply
to each such trustee only with respect to those series of Debt Securities with
respect to which it is serving as trustee. The Indentures are filed as exhibits
to the Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Indentures and the Debt Securities do
not purport to be complete and, while TEL and TEC believe the descriptions of
the material provisions of the Indentures and Debt Securities contained in this
Prospectus are accurate summaries of such material provisions, such summaries
are subject to the detailed provisions of the applicable Indenture to which
reference is hereby made for a full description of such provisions, including
the definition of certain terms used herein. Section references in parentheses
below are to sections in each Indenture unless otherwise indicated. Wherever
particular sections or defined terms of the applicable Indenture are referred
to, such sections or defined terms are incorporated herein by reference as part
of the statement made, and the statement is qualified in its entirety by such
reference. The Indentures are substantially identical, except for provisions
relating to the Guarantee and to subordination. For purposes of the summaries
set forth below, the term "Issuer" shall refer to TEC in the case of the TEC
Debt Securities and the TEC Indentures, and to TEL in the case of the TEL Debt
Securities and the TEL Indentures. The term "Obligors" shall refer to TEL, in
the case of the TEL Debt Securities and the TEL Indentures, and TEC and TEL,
as guarantor (the "Guarantor"), in the case of the TEC Debt Securities and
the TEC Indentures.
Provisions Applicable to Senior, Senior Subordinated and TEL Subordinated Debt
Securities
General. TEL Debt Securities will be unsecured senior, senior subordinated
or subordinated obligations of TEL, and TEC Debt Securities will be unsecured
senior or senior subordinated obligations of TEC, except that, under certain
circumstances, TEC may be released from such obligations. See "--Condition
for Release of TEC ." Except to the extent set forth in the applicable
Prospectus Supplement, none of the Indentures limits the payment of dividends
by or the acquisition of stock of TEL or TEC. Except to the extent set forth
in any Prospectus Supplement, the Indentures do not, and the Debt Securities
will not, contain any covenants or other provisions that are intended to afford
holders of the Debt Securities special protection in the event of either a
change of control of TEL or a highly leveraged transaction by TEL.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Debt Securities being offered (the "Offered
Debt Securities") (to the extent such terms are applicable to such Offered Debt
Securities): (i) the title of the Offered Debt Securities; (ii) classification
as TEC Senior Debt Securities, TEC Senior Subordinated Debt Securities, TEL
Senior Debt Securities, TEL Senior Subordinated Debt Securities or TEL
Subordinated Debt Securities, aggregate principal amount, purchase price and
denomination; (iii) the date or dates on which the Offered Debt Securities will
mature; (iv) the method by which amounts payable in respect of principal,
premium, if any, or interest, if any, on or upon the redemption of such Offered
Debt Securities may be calculated; (v) the interest rate or rates (or the
method by which such will be determined), and the date or dates from which such
interest, if any, will accrue; (vi) the date or dates on which such interest,
if any, will be payable; (vii) the place or places where and the manner in
which the principal of, premium, if any, and interest, if any, on the Offered
Debt Securities will be payable and the place or places where the Offered Debt
Securities may be presented for transfer; (viii) the right, if any, or
obligation, if any, of the Issuer to redeem, repay or purchase the Offered Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a holder thereof, and the period or periods within which, the price
or prices (or the method by which such price or prices will be determined, or
both) at which, the form or method of payment therefor if other than in cash
and the terms and conditions upon which the Offered Debt Securities will be
redeemed, repaid or purchased pursuant to any such obligation; (ix) the terms
for conversion or exchange, if any, of the Offered Debt Securities; (x) any
provision relating to the issuance of the Offered Debt Securities at an
original issue discount; (xi) if the amounts of payments of principal of,
premium, if any, and interest, if any, on the Debt Securities are to be
determined with reference to an index, the manner in which such amounts shall
be determined; (xii) any applicable United States federal income tax
consequences; (xiii) the currency or currencies for which the Offered Debt
Securities may be purchased and the currency or currencies in which principal,
premium, if any, and interest, if any, may be payable; (xiv) if a trustee other
than The Chase Manhattan Bank with respect to any series of Senior Debt
Securities or TEL Subordinated Debt Securities or United States Trust Company
of New York with respect to any series of Senior Subordinated Debt Securities
is named for such series of Offered Debt Securities, the name of such Trustee;
and (xv) any other specific terms of the Offered Debt Securities, including any
deleted, modified or additional events of default or remedies or additional
covenants provided with respect to such Offered Debt Securities, and any terms
that may be required by or advisable under applicable laws or regulations.
Unless otherwise specified in any Prospectus Supplement, the Debt
Securities will be issuable in registered form and in denominations of $1,000
and any integral multiple thereof (Section 2.7). No service charge will be made
for any transfer or exchange of any Debt Securities but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith (Section 2.8).
Debt Securities may bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par that are treated as having been issued at a
discount for United States federal income tax purposes will be described in the
applicable Prospectus Supplement.
In determining whether the holders of the requisite aggregate principal
amount of outstanding Debt Securities of any series have given any request,
demand, authorization, direction, notice, consent or waiver under the
Indentures, the principal amount of any series of Debt Securities originally
issued at a discount from their stated principal amount that will be deemed to
be outstanding for such purposes will be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof.
Description of Guarantee. TEL will fully and unconditionally guarantee,
pursuant to the TEC Indentures, the due and prompt payment of the principal of
(and premium, if any) and interest on the TEC Debt Securities when and as the
same shall become due and payable, whether at the Stated Maturity, by
declaration of acceleration, call for redemption or otherwise.
Payments with respect to the Guarantee of the TEC Senior Subordinated Debt
Securities will be subordinated in right of payment to the prior payment in
full of all Senior Indebtedness of the Guarantor to the same extent and manner
that payments with respect to the TEC Senior Subordinated Debt Securities are
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness of the Issuer as described under "Provisions Applicable Solely to
Senior Subordinated Debt Securities and TEL Subordinated Debt Securities"
below.
TEL will also agree that, if any deduction or withholding of any present
or future withholding taxes, levies, imposts or charges whatsoever imposed by
or for the account of the Cayman Islands or any political subdivision or taxing
authority thereof or therein shall be required, TEL will (subject to compliance
by the holders of the TEC Debt Securities with any relevant administrative
requirements) pay such additional amount in respect of principal (and premium,
if any) and interest as may be necessary in order that the net amounts paid to
such holders pursuant to the Guarantee after such deduction or withholding
shall equal the respective amounts of principal (and premium, if any) and
interest specified in the TEC Debt Securities; provided, however, that the
foregoing shall not apply to any such tax, levy, impost or charge which would
not be payable but for the fact that (i) the holder of the TEC Debt Securities
is a domiciliary, national or resident of, or engaging in business or
maintaining a permanent establishment or being physically present in, the
Cayman Islands or such political subdivision or otherwise having some
connection with the Cayman Islands other than the holding or ownership of such
TEC Debt Security or the collection of principal of (and premium, if any) and
interest on such TEC Debt Security or the enforcement of such TEC Debt Security
or of the Guarantee endorsed thereon or (ii) where presentation is required,
such TEC Debt Security was presented more than 30 days after the date such
payment became due or was provided for, whichever is later.
In the opinion of W.S. Walker & Company, under Cayman Islands law as
applied and interpreted on the date of this Prospectus no taxes, levies,
imposts or charges of the Cayman Islands or any political subdivisions or
taxing authority therefor therein would be required to be deducted or withheld
from any payment by TEL to a resident of the U.S. (who is not also a resident
of the Cayman Islands) pursuant to a guarantee in the form provided for by the
TEC Indentures.
Global Securities. The Debt Securities of a series may be issued in whole
or in part in the form of one or more global securities ("Global Securities")
that will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a Global Security (i) may not
be transferred except as a whole and (ii) may only be transferred (A) by the
Depositary for such Global Security to its nominee, (B) by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or (C) by
such Depositary or any such nominee to a successor Depositary or nominee of
such successor Depositary (Section 2.8).
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. TEL and TEC anticipate that the following provisions will
generally apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary. Such accounts shall be designated by the
dealers, underwriters or agents with respect to such Debt Securities or by the
Issuer if such Debt Securities are offered and sold directly by the Issuer.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the applicable Depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities of the series represented by such Global Security for all purposes
under the Indenture governing such Debt Securities. Except as provided below,
owners of beneficial interests in a Global Security will not be entitled to
have any of the individual Debt Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Debt Securities in definitive form and
will not be considered the owners or holders thereof under the Indenture
governing such Debt Securities.
Payment of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. TEL and TEC expect that the Depositary for a
series of Debt Securities or its nominee, upon receipt of any payment of
principal of, premium, if any, and interest, if any, in respect of a Global
Security representing any such Debt Securities, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
for such Securities as shown on the records of such Depositary or its nominee.
TEL and TEC also expect that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name." Such payments will be the responsibility of such
participants. Neither TEL, TEC, the Trustee for such Debt Securities, any
paying agent nor the registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by an Issuer within 90 days, such Issuer will issue
individual Debt Securities of such series in exchange for the Global Security
representing such series of Debt Securities. In addition, an Issuer may at any
time and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Debt Securities, determine not to have
any Debt Securities of a series represented by a Global Security and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security representing such series of Debt Securities. Further, if an
Issuer so specifies with respect to the Debt Securities of a series, an owner
of a beneficial interest in a Global Security representing Debt Securities of
such series may, on terms acceptable to such Issuer, the Trustee and the
Depositary for such Global Security, receive individual Debt Securities of such
series in exchange for such beneficial interests, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities. In any
such instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of individual Debt Securities of the series
represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in
registered form and in denominations, unless otherwise specified in the
applicable Prospectus Supplement relating to such series of Debt Securities, of
$1,000 and integral multiples thereof.
Events of Default. Unless otherwise specified in the applicable Prospectus
Supplement, an Event of Default is defined under each Indenture with respect to
the Debt Securities of any series issued under such Indenture as being: (a)
default in the payment of principal of or premium, if any, with respect to Debt
Securities of such series when due; (b) default in the payment of any
installment of interest upon any of the Debt Securities of such series when
due, continued for 30 days; (c) default in the payment or satisfaction of any
sinking fund or other purchase obligation with respect to Debt Securities of
such series when due; (d) default in the performance of any other covenant of
any of the Obligors applicable to Debt Securities of such series, continued for
90 days after written notice to the Obligors by the Trustee or to the Obligors
and the Trustee, by the holders of at least 25% in aggregate principal amount
of the Debt Securities of such series then outstanding requiring the same to be
remedied; (e) certain events of bankruptcy, insolvency or reorganization of any
of the Obligors; and (f) default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by any of the Obligors or under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed of any of
the Obligors resulting in the acceleration of such indebtedness, or any default
in payment of such indebtedness (after expiration of any applicable grace
periods and presentation of any debt instruments, if required), if the
aggregate amount of all such indebtedness that has been so accelerated and with
respect to which there has been such a default in payment shall exceed
$20,000,000 and there has been a failure to obtain rescission or annulment of
all such accelerations or to discharge all such defaulted indebtedness within
20 days after written notice of the type specified in the foregoing clause (d)
(Section 5.1).
If any Event of Default shall occur and be continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding, by notice in writing to the
Obligors (and to the Trustee, if given by the holders), may declare the
principal (or, in the case of any series of Debt Securities originally issued
at a discount from their stated principal amount, such portion of the principal
amount as may be specified in the terms of such series) of all of the Debt
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately; provided, however, that the holders of a majority in
aggregate principal amount of the Debt Securities of such series then
outstanding, by notice in writing to the Obligors and the Trustee, may rescind
and annul such declaration and its consequences if all defaults under such
Indenture are cured or waived (Section 5.1).
Each Indenture provides that no holder of any series of Debt Securities
then outstanding may institute any suit, action or proceeding with respect to,
or otherwise attempt to enforce, such Indenture, unless (i) such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, (ii) the holders of not less than 25% in aggregate
principal amount of such series of Debt Securities then outstanding shall have
made written request to the Trustee to institute such suit, action or
proceeding and shall have offered to the Trustee such reasonable indemnity as
it may require with respect thereto and (iii) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; provided that,
subject to the subordination provisions applicable to the Senior Subordinated
Debt Securities and the TEL Subordinated Debt Securities, the right of any
holder of any Debt Security to receive payment of the principal of, premium, if
any, or interest, if any, on such Debt Security, on or after the respective due
dates, or to institute suit for the enforcement of any such payment shall not
be impaired or affected without the consent of such holder (Section 5.4). The
holders of a majority in aggregate principal amount of the Debt Securities of
such series then outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Debt Securities
of such series, provided that the Trustee may decline to follow such direction
if the Trustee determines that such action or proceeding is unlawful or would
involve the Trustee in personal liability (Section 5.7).
The Obligors are required to furnish to the Trustee annually a certificate
as to compliance by the Obligors with all conditions and covenants under each
Indenture (Section 4.3).
Discharge and Defeasance. Unless otherwise specified in the applicable
Prospectus Supplement, the Obligors can discharge or defease their respective
obligations with respect to any series of Debt Securities as set forth below
(Article Ten).
The Obligors may discharge all of their obligations (except those set
forth below) to holders of any series of Debt Securities issued under any
Indenture that have not already been delivered to the Trustee for cancellation
and that have either become due and payable, or are by their terms due and
payable within one year (or scheduled for redemption within one year), by
irrevocably depositing with the Trustee cash or U.S. Government Obligations (as
defined in such Indenture), or a combination thereof, as trust funds in an
amount certified to be sufficient to pay when due the principal of, premium, if
any, and interest, if any, on all outstanding Debt Securities of such series
and to make any mandatory sinking fund payments, if any, thereon when due.
Unless otherwise provided in the applicable Prospectus Supplement, the
Obligors may also elect at any time to (a) defease and be discharged from all
of their obligations (except those set forth below) to holders of any series of
Debt Securities issued under each Indenture ("defeasance") or (b) be released
from all of their obligations with respect to certain covenants applicable to
any series of Debt Securities issued under each Indenture ("covenant
defeasance"), if, among other things: (i) the Obligors irrevocably deposit with
the Trustee cash or U.S. Government Obligations, or a combination thereof, as
trust funds in an amount certified to be sufficient to pay when due the
principal of, premium, if any, and interest, if any, on all outstanding Debt
Securities of such series and to make any mandatory sinking fund payments, if
any, thereon when due and such funds have been so deposited for 91 days; (ii)
such deposit will not result in a breach or violation of, or cause a default
under, any agreement or instrument to which any of the Obligors is a party or
by which it is bound; and (iii) the Obligors deliver to the Trustee an opinion
of counsel to the effect that the holders of such series of Debt Securities
will not recognize income, gain or loss for United States federal income tax
purposes as a result of such defeasance or covenant defeasance and that
defeasance or covenant defeasance will not otherwise alter the United States
federal income tax treatment of such holders' principal and interest payments,
if any, on such series of Debt Securities. Such opinion in the case of
defeasance under clause (a) above must be based on a ruling of the Internal
Revenue Service or a change in United States federal income tax law occurring
after the date of the Indenture relating to the Debt Securities of such series,
since such a result would not occur under current tax law (Section 10.1).
Notwithstanding the foregoing, no discharge, defeasance or covenant
defeasance described above shall affect the following obligations to or rights
of the holders of any series of Debt Securities: (i) rights of registration of
transfer and exchange of Debt Securities of such series, (ii) rights of
substitution of mutilated, defaced, destroyed, lost or stolen Debt Securities
of such series, (iii) rights of holders of Debt Securities of such series to
receive payments of principal thereof and premium, if any, and interest, if
any, thereon, upon the original due dates therefor (but not upon acceleration),
and to receive mandatory sinking fund payments thereon when due, if any, (iv)
rights, obligations, duties and immunities of the Trustee, (v) rights of
holders of Debt Securities of such series as beneficiaries with respect to
property so deposited with the Trustee payable to all or any of them and (vi)
obligations of the Obligors to maintain an office or agency in respect of Debt
Securities of such series (Section 10.1).
The Obligors may exercise the defeasance option with respect to any series
of Debt Securities notwithstanding the prior exercise of the covenant
defeasance option with respect to any series of Debt Securities. If the
Obligors exercise the defeasance option with respect to any series of Debt
Securities, payment of such series of Debt Securities may not be accelerated
because of an Event of Default with respect to such series of Debt Securities.
If the Obligors exercise the covenant defeasance option with respect to any
series of Debt Securities, payment of such series of Debt Securities may not be
accelerated by reason of an Event of Default with respect to the covenants to
which such covenant defeasance is applicable. However, if such acceleration
were to occur by reason of another Event of Default, the realizable value at
the acceleration date of the cash and U.S. Government Obligations in the
defeasance trust could be less than the principal of, premium, if any, and
interest, if any, and any mandatory sinking fund payments, if any, then due on
such series of Debt Securities, in that the required deposit in the defeasance
trust is based upon scheduled cash flow rather than market value, which will
vary depending upon interest rates and other factors.
Modification of the Indenture. Each Indenture provides that the Obligors
and the Trustee may enter into supplemental indentures without the consent of
the holders of the Debt Securities to (a) evidence the assumption by a
successor entity of the obligations of any of the Obligors under such
Indenture, (b) add covenants or new events of default for the protection of the
holders of such Debt Securities, (c) cure any ambiguity or correct any
inconsistency in the Indenture, (d) establish the form and terms of Debt
Securities of any series, (e) evidence the acceptance of appointment by a
successor trustee, (f) in the case of Senior Debt Securities, secure such Debt
Securities, (g) designate a bank or trust company other than The Chase
Manhattan Bank to act as Trustee for a series of Senior Debt Securities or TEL
Subordinated Debt Securities and United States Trust Company of New York to act
as Trustee for a series of Senior Subordinated Debt Securities and (h) modify
the existing covenants and events of default solely in respect of, or add new
covenants and events of default that apply solely to, Debt Securities not yet
issued and outstanding on the date of such supplemental indenture (Section
8.1).
Each Indenture also contains provisions permitting the Obligors and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of each series then outstanding
and affected, to add any provisions to, or change in any manner or eliminate
any of the provisions of, such Indenture or of any supplemental indenture or
modify in any manner the rights of the holders of the Debt Securities of such
series; provided that the Obligors and the Trustee may not, without the consent
of the holder of each outstanding Debt Security affected thereby, (a) extend
the stated final maturity of any Debt Security, reduce the principal amount
thereof, reduce the rate or extend the time of payment of interest, if any,
thereon, reduce or alter the method of computation of any amount payable on
redemption, repayment or purchase by the Issuer, change the coin or currency
in which principal, premium, if any, and interest, if any, are payable, reduce
the amount of the principal of any original issue discount security payable
upon acceleration or provable in bankruptcy, impair or affect the right to
institute suit for the enforcement of any payment or repayment thereof or, if
applicable, adversely affect any right of prepayment at the option of the
holder or, in the case of the TEC Indentures, make any change adverse to the
interest of the holders in the terms and conditions of the Guarantee or (b)
reduce the aforesaid percentage in aggregate principal amount of Debt
Securities of any series issued under such Indenture (Section 8.2).
Consolidation, Merger, Sale or Conveyance. Except as otherwise provided in
the applicable Prospectus Supplement, the TEC Indentures provide that TEC or
the Guarantor may, and the TEL Indentures provide that TEL may, without the
consent of the holders of Debt Securities, consolidate with, merge into or
transfer, exchange or dispose of all of its properties to, any other
corporation or partnership organized under the laws of the United States or any
political subdivision thereof or therein or under the laws of the Cayman
Islands or any political subdivision thereof, provided that (i) the successor
corporation assumes all obligations of TEC or TEL, as the case may be, by
supplemental indenture satisfactory in form to the applicable Trustee executed
and delivered to such Trustee, under the Indentures and the Debt Securities,
(ii) immediately after giving effect to such consolidation, merger, exchange or
other disposition, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred
and be continuing and (iii) certain other conditions are met.
Condition for Release of TEC . Except as otherwise provided in the
applicable Prospectus Supplement, each TEC Indenture provides that TEC may be
released from its obligations under such TEC Indenture and the TEC Debt
Securities, without the consent of the holders of the TEC Debt Securities of
any series, if the 1997 Notes and the 2000 Notes issued by TEC are no longer
outstanding and if TEL or any successor to TEL has assumed the obligations of
TEC under such Debt Securities. In the event of such release, a taxable
sale or exchange of a Debt Security for a new Debt Security will be deemed to
occur. As a result, a holder of a Debt Security may recognize gain or loss on
the sale or exchange and may be required to include in income different amounts
during the remaining term of the Debt Security than would have been included
absent such release.
Certain Definitions. Except as otherwise provided in the applicable
Prospectus Supplement, the following definitions are applicable to the
discussions of the Indentures (Article One).
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of TEL and
its Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities
and (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all in accordance with
generally accepted accounting principles consistently applied.
"Indebtedness," with respect to any person, means, without duplication:
(a)(i) the principal of, premium, if any, and interest, if any,
on indebtedness for money borrowed of such person, indebtedness of
such person evidenced by bonds, notes, debentures or similar
obligations, and any guaranty by such person of any indebtedness for
money borrowed or indebtedness evidenced by bonds, notes, debentures
or similar obligations of any other person, whether any such
indebtedness or guaranty is outstanding on the date of the Indenture
or is thereafter created, assumed or incurred, (ii) obligations of
such person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction, (iii) the
principal of and premium, if any, and interest, if any, on
indebtedness incurred, assumed or guaranteed by such person in
connection with the acquisition by it or any of its subsidiaries of
any other businesses, properties or other assets, (iv) lease
obligations that such person capitalized in accordance with Statement
of Financial Accounting Standards No. 13 promulgated by the Financial
Accounting Standards Board or such other generally accepted
accounting principles as may be from time to time in effect, (v) any
indebtedness of such person representing the balance deferred and
unpaid of the purchase price of any property or interest therein
(except any such balance that constitutes an accrued expense or trade
payable) and any guaranty, endorsement or other contingent obligation
of such person in respect of any indebtedness of another that is
outstanding on the date of the Indenture or is thereafter created,
assumed or incurred by such person and (vi) obligations of such
person under interest rate, commodity or currency swaps, caps,
collars, options and similar arrangements if and to the extent that
any of the foregoing indebtedness in (i) through (vi) would appear as
a liability on the balance sheet of such person in accordance with
generally accepted accounting principles; and
(b) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Restricted Subsidiary" means (a) any Subsidiary of TEL other than an
Unrestricted Subsidiary, and (b) any Subsidiary of TEL which was an
Unrestricted Subsidiary but which, subsequent to the date of the
Indentures, is designated by the Board of Directors of TEL to be a
Restricted Subsidiary; provided, however, that TEL may not designate any
such Subsidiary to be a Restricted Subsidiary if TEL would thereby breach
any covenant or agreement contained in the Indentures (on the assumptions
that any outstanding Indebtedness of such Subsidiary was incurred at the
time of such designation).
"Subsidiary" of any specified Person means any corporation of which
such Person, or such Person and one or more Subsidiaries of such Person,
or any one or more Subsidiaries of such Person, directly or indirectly own
voting securities entitling any one or more of such Person and its
Subsidiaries to elect a majority of the directors, either at all times, or
so long as there is no default or contingency which permits the holders of
any other class or classes of securities to vote for the election of one
or more directors.
"Unrestricted Subsidiary" means (a) any Subsidiary of TEL acquired or
organized after the date of the Indentures, provided, however, that such
Subsidiary shall not be a successor, directly or indirectly, to any
Restricted Subsidiary and (b) any Subsidiary of TEL substantially all the
assets of which consist of stock or other securities of a Subsidiary or
Subsidiaries of the character described in clause (a) above, unless and
until such Subsidiary shall have been designated to be a Restricted
Subsidiary.
Provisions Applicable Solely to Senior Debt Securities
General. Senior Debt Securities will be issued under a Senior Debt
Indenture and will rank pari passu with all other unsecured and unsubordinated
debt of the Issuer of such Senior Debt Securities.
Limitations on Liens. The Senior Debt Indentures provide that, so long as
any Senior Debt Securities are outstanding, TEL will not, and will not permit
any Restricted Subsidiary to, pledge, mortgage, hypothecate or grant a security
interest in, or permit any mortgage, pledge, security interest or other lien
upon, any property or assets owned by TEL or any Restricted Subsidiary to
secure any Indebtedness, without making effective provision whereby outstanding
Senior Debt Securities shall be equally and ratably secured.
Under the terms of the Senior Debt Indentures, the foregoing limitation
does not apply to (a) any mortgage, pledge, security interest, lien or
encumbrance upon any property or assets created at the time of the acquisition
of such property or assets by TEL or any Restricted Subsidiary or within one
year after such time to secure all or a portion of the purchase price for such
property or assets; (b) any mortgage, pledge, security interest, lien or
encumbrance upon any property or assets existing thereon at the time of the
acquisition thereof by TEL or any Restricted Subsidiary (whether or not the
obligations secured thereby are assumed by TEL or any Restricted Subsidiary);
(c) any mortgage, pledge, security interest, lien or encumbrance upon any
property or assets, whenever acquired, of any corporation or other entity that
becomes a Restricted Subsidiary after the date of the Senior Debt Indenture,
provided that (i) the instrument creating such mortgage, pledge, security
interest, lien or encumbrance shall be in effect prior to the time such
corporation or other entity becomes a Restricted Subsidiary and (ii) such
mortgage, pledge, security interest, lien or encumbrance shall only apply to
properties or assets owned by such corporation or other entity at the time it
becomes a Restricted Subsidiary or thereafter acquired by it from sources other
than TEL or another Restricted Subsidiary; (d) any mortgage, pledge, security
interest, lien or encumbrance arising from or in connection with a conveyance
by TEL or a Restricted Subsidiary of any production payment with respect to
oil, gas, natural gas, carbon dioxide, sulphur, helium, coal, metals, minerals,
steam, timber or other natural resources; (e) any mortgage, pledge, security
interest, lien or encumbrance with respect to, or other transfer of, crude oil,
natural gas or other petroleum hydrocarbons in place for a period of time
until, or in an amount such that, the transferee will realize therefrom a
specified amount (however determined) of money or of such crude oil, natural
gas or other petroleum hydrocarbons; (f) any mortgage, pledge, security
interest, lien or encumbrance required by any contract or statute in order to
permit TEL or any Restricted Subsidiary to perform any contract or subcontract
made by it with or at the request of the United States or any State thereof or
any foreign government or any department, agency, organization or
instrumentality thereof, or to secure partial, progress, advance or other
payments to TEL or any Restricted Subsidiary by such governmental unit pursuant
to the provisions of any contract or statute; (g) any mortgage, pledge,
security interest, lien or encumbrance in favor of TEL or any wholly-owned
Subsidiary of TEL; (h) any mortgage, pledge, security interest, lien or
encumbrance created or assumed by TEL or a Restricted Subsidiary in connection
with the issuance of debt securities the interest on which is excludable from
gross income of the holder of such security pursuant to the Internal Revenue
Code of 1986, as amended, for the purpose of financing, in whole or in part,
the acquisition or construction of property or assets to be used by TEL or a
Subsidiary; (i) any extension, renewal or refunding of any mortgage, pledge,
security interest, lien or encumbrance described in the foregoing subparagraphs
(a) through (h) on substantially the same property or assets theretofore
subject thereto; or (j) any mortgage, pledge, security interest, lien or
encumbrance securing any Indebtedness in an amount which, together with all
other Indebtedness secured by a mortgage, pledge, security interest, lien or
encumbrance that is not otherwise permitted by the foregoing provisions, does
not at the time of the incurrence of the Indebtedness so secured exceed 20% of
Consolidated Net Tangible Assets. For the purpose of this provision, "security
interest" will include the interest of the lessor under a lease with a term of
three years or more that should be, in accordance with generally accepted
accounting principles, recorded as a capital lease, and any such lease of
property or assets not acquired from TEL or any Restricted Subsidiary in
contemplation of such lease shall be treated as though the lessee had purchased
such property or assets from the lessor. (Section 3.6 of the Senior Debt
Indentures).
Provisions Applicable Solely to Senior Subordinated Debt Securities and TEL
Subordinated Debt Securities
Subordination. The TEL Subordinated Debt Securities will be subordinate
and junior in right of payment, to the extent set forth in the TEL Subordinated
Debt Indenture, to all Senior Indebtedness of TEL. The Senior Subordinated Debt
Securities will be subordinate and junior in right of payment, to the extent
set forth in the Senior Subordinated Debt Indentures, to all Senior
Indebtedness of the Issuer. The Senior Subordinated Debt Securities will rank
senior to all existing and future Indebtedness of the Issuer that is neither
Senior Indebtedness of the Issuer nor Senior Subordinated Indebtedness, and
only Indebtedness of the Issuer that is Senior Indebtedness of the Issuer will
rank senior to the Senior Subordinated Debt Securities in accordance with the
subordination provisions of the Senior Subordinated Debt Indentures.
"Senior Indebtedness" of the Issuer is defined in the TEL Subordinated
Debt Indenture and the Senior Subordinated Debt Indentures as Indebtedness of
the Issuer outstanding at any time (other than the Indebtedness evidenced by
the Debt Securities of any series) except (a) any Indebtedness as to which, by
the terms of the instrument creating or evidencing the same, it is provided
that such Indebtedness is not senior or prior in right of payment to the Debt
Securities or is pari passu or subordinate by its terms in right of payment to
the Debt Securities, (b) renewals, extensions and modifications of any such
Indebtedness, (c) any Indebtedness of the Issuer to a wholly-owned Subsidiary
of the Issuer, (d) interest accruing after the filing of a petition initiating
certain events of bankruptcy or insolvency unless such interest is an allowed
claim enforceable against the Issuer in a proceeding under federal or state
bankruptcy laws and (e) trade payables.
"Senior Indebtedness" of the Guarantor is defined in the TEC Senior
Subordinated Debt Indenture as Indebtedness of the Guarantor outstanding at any
time (other than the Indebtedness evidenced by the Guarantee of any series)
except (a) any Indebtedness as to which, by the terms of the instrument
creating or evidencing the same, it is provided that such Indebtedness is not
senior or prior in right of payment to the Guarantee or is pari passu or
subordinate by its terms in right of payment to the Guarantee, (b) renewals,
extensions and modifications of any such Indebtedness, (c) any Indebtedness of
the Guarantor to a wholly-owned Subsidiary of the Guarantor, (d) interest
accruing after the filing of a petition initiating certain events of bankruptcy
or insolvency unless such interest is an allowed claim enforceable against the
Guarantor in a proceeding under federal or state bankruptcy laws and (e) trade
payables.
"Senior Subordinated Indebtedness" is defined in the TEL Senior
Subordinated Debt Indenture as the TEL Senior Subordinated Debt Securities
and any other Indebtedness of TEL that ranks pari passu with the TEL Senior
Subordinated Debt Securities (including the Guarantees of the 1997 Notes and
the 2000 Notes). Any Indebtedness of TEL that is subordinate or junior by
its terms in right of payment to any other Indebtedness of TEL shall be
subordinate to Senior Subordinated Indebtedness of TEL unless the instrument
creating or evidencing the same or pursuant to which the same is outstanding
specifically provides that such Indebtedness (i) is to rank pari passu with
other Senior Subordinated Indebtedness of TEL and (ii) is not subordinated by
its terms to any Indebtedness of TEL which is not Senior Indebtedness of TEL.
"Senior Subordinated Indebtedness" is defined in the TEC Senior
Subordinated Debt Indenture as the TEC Senior Subordinated Debt Securities, the
Guarantee and any other Indebtedness of TEC or the Guarantor that ranks pari
passu with the TEC Senior Subordinated Debt Securities (including the 1997
Notes, the 2000 Notes and the Guarantees thereof). Any Indebtedness of TEC or
the Guarantor that is subordinate or junior by its terms in right of payment to
any other Indebtedness of TEC or the Guarantor shall be subordinate to Senior
Subordinated Indebtedness unless the instrument creating or evidencing the same
or pursuant to which the same is outstanding specifically provides that such
Indebtedness (i) is to rank pari passu with other Senior Subordinated
Indebtedness and (ii) is not subordinated by its terms to any Indebtedness of
TEC or the Guarantor which is not Senior Indebtedness of TEC or Senior
Indebtedness of the Guarantor.
"Subordinated Indebtedness" of any of the Obligors means the Senior
Subordinated Debt Securities, the Guarantees, any other Senior Subordinated
Indebtedness of such Obligor and any other Indebtedness that is subordinate or
junior in right of payment to Senior Indebtedness of such Obligor.
If (i) the Issuer should default in the payment of any principal of,
premium, if any, or interest, if any, on any Senior Indebtedness of the Issuer
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration of acceleration or otherwise or (ii) any other
default with respect to Senior Indebtedness of the Issuer shall occur and the
maturity of such Senior Indebtedness has been accelerated in accordance with
its terms, then, upon written notice of such default to the Issuer by the
holders of such Senior Indebtedness or any trustee therefor, unless and until
such default shall have been cured or waived or shall have ceased to exist or
such acceleration shall have been rescinded, no direct or indirect payment (in
cash, property, securities, by set-off or otherwise) will be made or agreed to
be made for principal of, premium, if any, or interest, if any, on any of the
Senior Subordinated Debt Securities or the TEL Subordinated Debt Securities, or
in respect of any redemption, retirement, purchase or other acquisition of the
Senior Subordinated Debt Securities or the TEL Subordinated Debt Securities
other than those made in capital stock of TEL (or cash in lieu of fractional
shares thereof) (Sections 13.1 and 13.4 of the Senior Subordinated Debt
Indentures and Sections 13.1 and 13.4 of the TEL Subordinated Debt Indenture).
If any default (other than a default described in the preceding paragraph)
under the Senior Indebtedness of the Issuer, pursuant to which the maturity
thereof may be accelerated immediately or the expiration of any applicable
grace periods occurs (a "Senior Nonmonetary Default"), then, upon the receipt
by the Issuer and the Trustee of written notice thereof (a "Payment Notice")
from or on behalf of holders of such Senior Indebtedness specifying an election
to prohibit such payment and other action by the Issuer in accordance with the
following provisions of this paragraph, the Issuer may not make any payment or
take any other action that would be prohibited by the immediately preceding
paragraph during the period (the "Payment Blockage Period") commencing on the
date of receipt of such Payment Notice and ending on the earlier of (i) the
date, if any, on which the holders of such Senior Indebtedness or their
representative notify the Trustee that such Senior Nonmonetary Default is cured
or waived or ceases to exist or the Senior Indebtedness to which such Senior
Nonmonetary Default relates is discharged or (ii) the 179th day after the date
of receipt of such Payment Notice. Notwithstanding the provisions described in
the immediately preceding sentence, the Issuer may resume payments on the
Senior Subordinated Debt Securities and the TEL Subordinated Debt Securities
after such Payment Blockage Period.
If (i) (A) without the consent of the Issuer, a receiver, conservator,
liquidator or trustee of the Issuer or of any of its property is appointed by
the order or decree of any court or agency or supervisory authority having
jurisdiction, and such decree or order remains in effect for more than 60 days
or (B) the Issuer is adjudicated bankrupt or insolvent or (C) any of its
property is sequestered by court order and such order remains in effect for
more than 60 days or (D) a petition is filed against the Issuer under any state
or federal bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or receivership law of any jurisdiction whether
now or hereafter in effect, and is not dismissed within 60 days after such
filing; (ii) the Issuer (A) commences a voluntary case or other proceeding
seeking liquidation, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or other relief with respect to itself or its
debt or other liabilities under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or (B) consents to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or (C) fails generally to, or cannot, pay its
debts generally as they become due or (D) takes any corporate action to
authorize or effect any of the foregoing; or (iii) any Subsidiary of the Issuer
takes, suffers or permits to exist any of the events or conditions referred to
in the foregoing clause (i) or (ii), then all Senior Indebtedness of the Issuer
(including any interest thereon accruing after the commencement of any such
proceedings) will first be paid in full before any payment or distribution,
whether in cash, securities or other property, is made by the Issuer to any
holder of Senior Subordinated Debt Securities or TEL Subordinated Debt
Securities on account of the principal of, premium, if any, or interest, if
any, on such Senior Subordinated Debt Securities or TEL Subordinated Debt
Securities, as the case may be. Any payment or distribution, whether in cash,
securities or other property (other than securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the indebtedness evidenced by the
Senior Subordinated Debt Securities or the TEL Subordinated Debt Securities, to
the payment of all Senior Indebtedness of the Issuer then outstanding and to
any securities issued in respect thereof under any such plan of reorganization
or readjustment) that would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Senior Subordinated Debt Securities or
the TEL Subordinated Debt Securities of any series will be paid or delivered
directly to the holders of Senior Indebtedness of the Issuer in accordance with
the priorities then existing among such holders until all Senior Indebtedness
of the Issuer (including any interest thereon accruing after the commencement
of any such proceedings) has been paid in full. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness of the Issuer, the holders of Senior Subordinated Debt Securities,
together with the holders of any obligations of the Issuer ranking on a parity
with the Senior Subordinated Debt Securities, will be entitled to be repaid
from the remaining assets of the Issuer the amounts at that time due and owing
on account of unpaid principal of, premium, if any, or interest, if any, on the
Senior Subordinated Debt Securities and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any capital stock or obligations of the Issuer ranking
junior to the Senior Subordinated Debt Securities (including the TEL
Subordinated Debt Securities) and such other obligations (Section 13.1 of the
Senior Subordinated Debt Indentures and Section 13.1 of the TEL Subordinated
Debt Indenture).
If any payment or distribution of any character, whether in cash,
securities or other property (other than securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the Senior Subordinated Debt
Securities or the TEL Subordinated Debt Securities, to the payment of all
Senior Indebtedness of the Issuer then outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment),
shall be received by the Trustee, or any holder of any Senior Subordinated Debt
Securities or TEL Subordinated Debt Securities in contravention of any of the
terms of the Senior Subordinated Debt Indentures or the TEL Subordinated Debt
Indenture, as the case may be, such payment or distribution of securities will
be received in trust for the benefit of, and will be paid over or delivered and
transferred to, the holders of the Senior Indebtedness of the Issuer then
outstanding in accordance with the priorities then existing among such holders
for application to the payment of all Senior Indebtedness of the Issuer
remaining unpaid to the extent necessary to pay all such Senior Indebtedness of
the Issuer in full (Section 13.1 of the Senior Subordinated Debt Indentures and
Section 13.1 of the TEL Subordinated Debt Indenture).
By reason of such subordination, in the event of the insolvency of the
Issuer, holders of Senior Indebtedness of the Issuer may receive more, ratably,
than holders of the Senior Subordinated Debt Securities or TEL Subordinated
Debt Securities. Such subordination will not prevent the occurrence of any
Event of Default (as defined in the Indentures) or limit the right of
acceleration in respect of the Senior Subordinated Debt Securities or TEL
Subordinated Debt Securities.
Concerning the Trustee
The Chase Manhattan Bank, the Trustee under the Senior Debt Indentures and
the TEL Subordinated Debt Indenture, may make loans to TEC or TEL in the
normal course of business. The Chase Manhattan Bank serves as trustee with
respect to TEC 's 12 1/2% Senior Subordinated Discount Notes due 1997. United
States Trust Company of New York, the Trustee under the Senior Subordinated
Debt Indentures, serves as trustee with respect to TEC 's 9-3/4% Senior
Subordinated Discount Notes due 2000. If a bank or trust company other than The
Chase Manhattan Bank or United States Trust Company of New York is to act as
Trustee for a series of Debt Securities, information concerning such other
Trustee will be set forth in the Prospectus Supplement relating to such series
of Debt Securities.
DESCRIPTION OF SHARE CAPITAL OF TEL
The following statements with respect to TEL's share capital are subject
to the detailed provisions of the Company's Articles of Association (the
"Articles of Association"), its Memorandum of Association (the "Memorandum of
Association"), the resolutions with respect to the Convertible Preference
Shares (the "Resolutions"), and the Preference Share Purchase Rights created
pursuant to the Rights Agreement entered into between the Company and Chemical
Bank, as Rights Agent (the "Rights Agreement"). These statements do not purport
to be complete and, while the Company believes the descriptions of the material
provisions of the Articles of Association, Memorandum of Association,
Resolutions and Rights Agreement contained in this 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.
Preference Shares
Under the Articles of Association, the Company has authority to issue
20,000,000 preference shares, par value $.01 per share. There were 253,030
shares of 5% convertible preference shares, par value $.01 per share (the
"Convertible Preference Shares") outstanding at September 5, 1996. No other
preference shares are currently outstanding.
The Preference Shares may be issued by resolutions of the Company's Board
of Directors from time to time without any action of the shareholders. Such
resolutions may authorize issuances in one or more classes or series of the
preference shares and may fix and determine dividend and liquidation
preferences, voting rights, conversion privileges, redemption terms, and other
privileges and rights of the shareholders of each class or series so
authorized.
The specific terms of a particular series of Preference Shares offered
hereby will be described in a Prospectus Supplement relating to such series and
will include the following:
(i) The maximum number of shares to constitute the series and the
distinctive designation thereof;
(ii) The annual dividend rate, if any, on shares of the series, the
date or dates from which dividends will begin to accrue or accumulate and
the dates upon which such dividends shall be payable and whether dividends
will be cumulative;
(iii) Whether the shares of the series will be redeemable and, if so,
the price at and the terms and conditions on which the shares of the
series may be redeemed, including the time during which shares of the
series may be redeemed and any accumulated dividends thereon that the
holders of shares of the series shall be entitled to receive upon the
redemption thereof;
(iv) The liquidation preference, if any, applicable to shares of the
series;
(v) Whether the shares of the series will be subject to operation of
a retirement or sinking fund and, if so, the extent and manner in which
any such fund shall be applied to the purchase or redemption of the shares
of the series for retirement or for other corporate purposes, and the
terms and provisions relating to the operation of such fund;
(vi) The terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, shares of any other
class or series of share capital of TEL or another corporation or any
series of any other class or classes, or of any other series of the same
class, including the price or prices or the rates of conversion or
exchange and the method, if any, of adjusting the same;
(vii) The voting rights, if any, on the shares of the series; and
(viii) Any other preferences and relative, participating, optional or
other special rights or qualifications, limitations or restrictions
thereof.
Outstanding 5% Convertible Preference Shares
Pursuant to the Merger, each outstanding share of 5% convertible preferred
stock, no par value, of TEC was converted into one Convertible Preference
Share of the Company.
Dividends. Holders of Convertible Preference Shares are entitled to
receive, when, as, and if declared by the Board of Directors of the Company out
of funds of the Company 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 accrue from the date on which
the Convertible Preference Shares were issued and are payable to holders of
record as they appear on the stock books of the Company on such record dates as
are fixed by the Board of Directors of the Company. The amount of dividends
payable for each semi-annual dividend period is computed by dividing the annual
dividend amount by two. The amount of dividends payable for any period other
than a full semi-annual dividend period is 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 have priority as to dividends over
Ordinary Shares and any other series or class of the Company'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 the Company 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. The Company 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. Notwithstanding the preceding sentence, 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 TEL's shares
hereafter issued which ranks senior as to dividends to the Convertible
Preference Shares ("Senior Dividend Shares"), and if at any time TEL has failed
to pay or declare and set apart for payment accrued and unpaid dividends on any
Senior Dividend Shares, TEL 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 the Company, 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 the
Company'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 the Company's
shares hereafter 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 the Company
(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 the
Company may 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 the Company'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
shares, 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 the
Company. Neither a consolidation or merger of the Company with another company
nor a sale or transfer of all or part of the Company's assets for cash,
securities, or other property will be considered a liquidation, dissolution, or
winding up of the Company.
Redemption. The Company may, at its option, redeem the Convertible
Preference Shares, in whole or in part, at any time on or after March 30, 1998
or at any time when there are fewer than 133,005 Convertible Preference Shares
outstanding. 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 the Company on March 30, 2004. At the option of the Company, 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 Ordinary 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 Ordinary 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 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 is
entitled to one vote.
So long as any Convertible Preference Shares are outstanding, the Company
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 the
Company'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 the Company'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 the Company or any other securities of TEL
convertible into or carrying rights or options to purchase any such shares.
Conversion Rights. The holders of Convertible Preference Shares are
entitled to convert their Convertible Preference Shares into Ordinary 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 the Company 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, the
Company 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 Ordinary Shares.
Each Convertible Preference Share is convertible initially into one
Ordinary Share. However, the number of Ordinary Shares issuable on conversion
of each Convertible Preference Share (the "Conversion Rate") is 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 Ordinary Shares as a
stock dividend, in connection with combinations and subdivisions of Ordinary
Shares, upon certain reclassifications of Ordinary Shares, upon the issuance to
the Company's shareholders of rights or warrants to subscribe for or purchase
Ordinary Shares at a price per share less than the then current market price of
Ordinary Shares, and in connection with certain distributions to the Company'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 the Company with any other
company, or in the case of any merger of another company into the Company
(other than a merger with a company in which merger the Company is the
continuing company and which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of the Company), or
in the case of a sale or conveyance of all or substantially all of the assets
of the Company to another company, the Company 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 Ordinary 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 TEL 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 the Company one one-thousandth of a Series A
Junior Participating Preference Share, par value $.01 per share (the "Junior
Preference Shares"), of the Company 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; provided
that, pursuant to the terms of the Shareholder Rights Plan, Oppenheimer Group,
Inc. may increase its level of beneficial ownership to 19.9% without triggering
the rights. 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 Ordinary 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 Ordinary Shares on the date of the
first occurrence. In addition, if the Company 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, the Company's directors may determine that a
tender offer or merger is fair to all shareholders and prevent the rights from
being exercised. 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 the Company
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). The Company 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 Ordinary Share. In the event of liquidation, the
holders of the Junior Preference Shares will be entitled to a minimum
preferential liquidation payment of $1000 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 1,000 times
the payment made per Ordinary 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.
The Company will be entitled to redeem the rights at $0.01 a right at any
time prior to the time that a 15% position has been acquired. The rights will
expire on May 22, 2005.
Ordinary Shares
General. Under the Articles of Association, the Company has authority to
issue 200,000,000 Ordinary Shares. There were 36, 335, 113 Ordinary Shares
outstanding as of September 5, 1996.
Voting and Other Rights. Under the Articles of Association, the holders of
Ordinary Shares are entitled to one vote for each share held on all matters
submitted to shareholders' meetings, including the election and removal of
directors, and vote together as a single class with any voting preference
shares unless the terms of any voting preference shares or the Articles of
Association otherwise provide. The Articles of Association 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). A
change of corporate name, the voluntary dissolution, liquidation or winding-up
of the affairs of the Company, a reduction of paid-up share capital, and any
amendment to the Company's Articles of Association or Memorandum of Association
require approval by a Special Resolution by the shareholders of the Company. 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 the Company. The Company 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 TEL. The Articles of
Association 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.
The Articles of Association provide that whenever the share capital of TEL
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 the holders of such class
or pursuant to a Special Resolution adopted at a meeting with such holders
voting separately as a class. 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 Ordinary Shares or
different classes of shares with preferential rights as to dividends or
capital.
There are no limitations on the right of nonresident shareholders to hold
or vote their Ordinary Shares imposed by Cayman Islands law or the Articles of
Association.
Dividend Rights. The holders of Ordinary Shares are entitled at any time
to receive such dividends as are declared by the Board of Directors. The
ability of the Company to pay dividends on capital stock is restricted by
covenants in the indentures relating to the 1997 Notes and the 2000 Notes. The
Company currently intends to retain earnings for use in its 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 the Company,
along with applicable legal and contractual restrictions.
Liquidation of the Company. If, at the time of any liquidation,
dissolution or winding-up of the Company the holder of Ordinary Shares has any
outstanding debts, liabilities or engagements to or with the Company (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 Ordinary Shares), the
liquidator appointed to oversee the liquidation of the Company may deduct from
the amount payable in respect of such Ordinary 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 TEL (whether presently
payable or not). The liquidator may distribute, in kind, to the holders of the
Ordinary Shares remaining assets of TEL 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 Ordinary Shares
in accordance with the procedures set forth above. The liquidator may, with the
like sanction, vest the whole or any part of such assets in trustees upon such
trusts for the benefit of the contributories as the liquidator, with the like
sanction shall think fit, but so that no shareholder shall be compelled to
accept any shares or other securities whereon there is any liability.
Convertible Debentures
The Company has a convertible debenture plan under which key management
personnel may purchase debentures that are convertible into Ordinary Shares.
All debentures issuable under the plan have been issued. The aggregate number
of Ordinary Shares issuable upon the conversion of the debentures cannot exceed
1,000,000 shares, subject to adjustment in certain events. Of such shares,
458,000 are issuable upon conversion of outstanding debentures and 4,000 shares
are available for issuance upon conversion of debentures issuable in the
future.
DESCRIPTION OF WARRANTS
TEC may issue Warrants to purchase TEC Debt Securities and TEL may issue
TEL Warrants, including Warrants to purchase Ordinary Shares or Preference
Shares and Warrants to purchase TEL Debt Securities. All obligations of TEC
under the Warrants to purchase TEC Debt Securities will be fully and
unconditionally guaranteed by TEL. Warrants may be issued independently of or
together with any other Securities and may be attached to or separate from such
Securities. Each series of Warrants will be issued under a separate Warrant
Agreement (each a "Warrant Agreement") to be entered into between TEC and/or
TEL and a Warrant Agent ("Warrant Agent"). The Warrant Agent will act solely as
an agent of TEC and/or TEL in connection with the Warrants of such series and
will not assume any obligation or relationship of agency or trust for or with
holders or beneficial owners of Warrants. The following sets forth certain
general terms and provisions of the Warrants offered hereby. Further terms of
the Warrants and the applicable Warrant Agreement will be set forth in the
applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Warrants in respect of which this Prospectus is being
delivered: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued; (iv)
the designation, aggregate principal amount and terms of the securities
purchasable upon exercise of such Warrants; (v) the designation and terms of
the Securities with which such Warrants are issued and the number of such
Warrants issued with each such security; (vi) if applicable, the date on and
after which such Warrants and the related securities will be separately
transferable; (vii) the price at which the securities purchasable upon exercise
of such Warrants may be purchased; (viii) the date on which the right to
exercise such Warrants shall commence and the date on which such right shall
expire; (ix) the minimum or maximum amount of such Warrants which may be
exercised at any one time; (x) information with respect to book-entry
procedures, if any; (xi) a discussion of certain Federal income tax
considerations; and (xii) any other terms of such Warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
Warrants.
PLAN OF DISTRIBUTION
TEL and TEC may sell the Securities to or through underwriters or
dealers, and also may sell the Securities directly to one or more other
purchasers or through agents. The applicable Prospectus Supplement will set
forth the names of any underwriters or agents involved in the sale of the
Offered Securities and any applicable commissions or discounts.
Underwriters, dealers or agents may offer and sell the Offered Securities
at a fixed price or prices, which may be changed, or from time to time at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. In connection with the sale
of the Securities, underwriters or agents may be deemed to have received
compensation from TEC or TEL in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of the Securities
for whom they may act as agent. Underwriters or agents may sell the Securities
to or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they may act as agent.
The Securities, when first issued, will have no established trading
market. Any underwriters or agents to or through whom Securities are sold by
TEC or TEL for public offering and sale may make a market in such Securities,
but such underwriters or agents will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Securities.
Any underwriters, dealers or agents participating in the distribution of
the Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Securities may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended (the "1933 Act"). Underwriters, dealers or
agents may be entitled, under agreements entered into with TEC or TEL, to
indemnification against or contribution toward certain civil liabilities,
including liabilities under the 1933 Act.
If so indicated in the Prospectus Supplement, TEC or TEL will authorize
underwriters or other persons acting as its agents to solicit offers by certain
institutions to purchase Securities from it pursuant to contracts providing for
payment and delivery on a future date. Institutions with which such contracts
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and
others, but in all cases will be subject to the condition that the purchase of
the Securities shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject. The underwriters and
such agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Securities will
be passed upon for TEC by Simpson Thacher & Bartlett (a partnership which
includes professional corporations), New York, New York and for TEL by W.S.
Walker & Company, Grand Cayman, Cayman Islands. Certain legal matters with
respect to the Securities will be passed upon for the underwriters or agents,
if any, named in the Prospectus Supplement by Andrews & Kurth L.L.P., Houston,
Texas.
EXPERTS
The consolidated financial statements of Triton Energy Corporation as of
and for the year ended December 31, 1995, the seven months ended December 31,
1994 and the years ended May 31, 1994 and 1993, incorporated herein by
reference to TEC 's Annual Report on Form 10-K for the year ended December 31,
1995, have been so incorporated in reliance upon the report of Price Waterhouse
LLP, 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
Energy Corporation 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.
_______________________________________________________________________________
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.
_______________________________________________________________________________
Subject to Completion, dated September 9, 1996
PROSPECTUS
Triton Energy Limited
Dividend Reinvestment and Stock Purchase Plan
_________________________
Triton Energy Limited ("TEL" or the "Company") hereby offers participation
in its Dividend Reinvestment and Stock Purchase Plan (the "Plan"). The Plan is
designed to provide holders of TEL's ordinary shares, $.01 par value per share
("Ordinary Shares"), and 5% Convertible Preference Shares, $.01 par value per
share ("5% Preference Shares" and, together with any other class of TEL's
preference shares that may be outstanding, "Preference Shares") and other
interested investors with a convenient and economical method to purchase
Ordinary Shares from the Company at a price that initially will be equal to a
3% discount from the market price (as determined in accordance with the Plan)
by making optional cash investments and reinvesting all or a portion of any
cash dividends in Ordinary Shares. The Plan is also intended to provide the
Company with a cost-efficient and flexible mechanism to raise equity capital
because shares issuable under the Plan will be newly issued Ordinary Shares.
Holders of shares in broker or nominee names may participate in the Plan, in
which case, brokers or nominees will make optional cash investments and
reinvest dividends on behalf of beneficial owners. Some of the significant
features of the Plan are as follows:
-- Participants may purchase Ordinary Shares by making optional cash
investments of $100 to $10,000 in a given month or, for persons who
are not then shareholders, by making an initial optional cash
investment of $5,000 to $10,000. Optional cash investments in excess
of $10,000 may be made only with permission of the Company.
-- Holders of 5% Preference Shares and holders of Ordinary Shares, if
the Company begins to pay dividends on Ordinary Shares, may purchase
Ordinary Shares by automatically reinvesting all or a portion of
their cash dividends.
Participation in the Plan is entirely voluntary, and participants may
terminate their participation at any time.
The Company has never declared or paid a cash dividend on its Ordinary
Shares and the Company expects to retain any earnings for use in its business.
The ability of the Company to pay dividends on its capital stock, other than
the 5% Preference Shares, is restricted by covenants in indentures to which it
is a party. The Plan, however, is designed to accommodate the reinvestment of
dividends in the event that the Company should pay dividends on the Ordinary
Shares in the future. Holders of Ordinary Shares are cautioned that the
existence of the Plan in no way implies that the Company will modify its
current policy of not paying dividends. The payment of dividends at any time is
dependent upon the Company's earnings and financial needs, along with
applicable legal and contractual restrictions.
For a discussion of certain risk factors that should be considered by
prospective investors, see "Risk Factors," beginning on page 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_________________________
The date of this Prospectus is , 1996.
AVAILABLE INFORMATION
TEL 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 TEL 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 the Web site
(http://www.sec.gov.) maintained by the Commission; 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. Such material may also be inspected and copied at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York
10005.
As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information contained in the Registration Statement on
Form S-3, as amended (the "Registration Statement"), of which this Prospectus
is a part. For further information with respect to the Company and the
Securities offered hereby, reference is made to the Registration Statement and
the exhibits thereto. Statements made in this Prospectus as to the contents of
any contract, agreement or other document are not necessarily complete; and
while the Company believes the descriptions of the material provisions of such
contracts, agreements and other documents contained in this 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following documents previously filed with the Commission pursuant to the
Exchange Act: (i) Annual Report on Form 10-K of Triton Energy Corporation, a
Delaware corporation and a wholly owned subsidiary of TEL ("TEC "), for the
year ended December 31, 1995, (ii) TEC 's Current Report on Form 8-K dated
February 9, 1996, (iii) TEL's Current Reports on Form 8-K dated May 20, 1996,
July 2, 1996 and September 9, 1996, (iv) TEL's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996 and June 30, 1996, and (v) the
description of the Ordinary Shares contained in TEL's Registration Statement on
Form 8-A, dated March 25, 1996, as amended by Form 8-A/A, dated August 14,
1996.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities pursuant hereto shall be
deemed to be incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained in this Prospectus or in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to
the extent that a statement contained in this Prospectus or in any subsequently
filed document that also is or is deemed to be incorporated by reference in
this 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
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents that are incorporated by reference in this
Prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Investor Relations, Triton Energy, 6688 North Central Expressway,
Suite 1400, Dallas, Texas 75206-9926, telephone (214) 691-5200.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
The Company 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 TEL 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, TEL
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, TEL's United
States agent appointed for that purpose. TEL 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 TEL that are predicated upon the
civil liability provisions of the Securities Act or (b) in original actions
brought against TEL 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.
THE COMPANY
The Company is an international oil and gas exploration company primarily
engaged in exploration and production through subsidiaries and affiliates. The
Company's principal properties and operations are located in Colombia and
Malaysia-Thailand. The Company also has oil and gas interests in other Latin
American, European and Asian countries.
TEL was formed in the Cayman Islands in 1995 and became the parent holding
company of TEC through the merger (the "Merger") of a subsidiary of TEL with
and into TEC . The Merger was consummated on March 25, 1996. In connection with
the Merger, each share of common stock, par value $1.00 per share, of TEC , was
converted into one Ordinary Share. TEL's principal executive offices are
located at Caledonian House, Mary Street, P.O. Box 1043, George Town, Grand
Cayman, Cayman Islands and its telephone number is (809) 949-0050. The
"Company" refers to TEL and its consolidated subsidiaries.
RISK FACTORS
Certain statements included or incorporated by reference in this
Prospectus, such as proven oil and gas reserves, are forward-looking statements
(as such term is used in the Private Securities Litigation Reform Act of 1995),
and the factors discussed hereunder could cause actual results and developments
to be materially different from those expressed in or implied by such
statements. Accordingly, in addition to the other information set forth in or
incorporated by reference in this Prospectus, potential investors in the
Ordinary Shares should consider the following investment considerations.
The Oil and Gas Industry Generally. The Company's strategy is to focus its
exploration activities on what the Company believes are relatively high
potential prospects. No assurance can be given that these prospects contain
significant oil and gas reserves or that the Company will be successful in its
exploration activities thereon. The Company follows the full cost method of
accounting for exploration and development of oil and gas reserves whereby all
productive and nonproductive costs are capitalized. Costs related to
acquisition, holding and initial exploration of concessions in countries with
no proved reserves are initially capitalized, including internal costs directly
identified with acquisition, exploration and development activities. The
Company's exploration concessions are periodically assessed for impairment on a
country by country basis. If the Company's investment in exploration
concessions within a country where no proved reserves are assigned is deemed to
be impaired, the concessions are written down to estimated recoverable value.
If the Company abandons all exploration efforts in a country where no proved
reserves are assigned, all exploration costs associated with the country are
expensed. The Company's assessments of whether its investment within a country
is impaired and whether exploration activities within a country will be
abandoned are made from time to time based on its review and assessment of
drilling results, seismic data and other information it deems relevant. Due to
the unpredictable nature of exploration drilling activities, the amount and
timing of impairment expense are difficult to predict with any certainty.
Financial information concerning the Company's assets, including capitalized
costs by geographic area, is set forth in Note 21 of Notes to Consolidated
Financial Statements in TEC 's Annual Report on Form 10-K for the year ended
December 31, 1995.
The markets for oil and natural gas historically have been volatile and
are likely to continue to be volatile in the future. Oil and natural gas prices
have been subject to significant fluctuations during the past several decades
in response to relatively minor changes in the supply of and demand for oil and
natural gas, market uncertainty and a variety of additional factors that are
beyond the control of the Company. These factors include the level of consumer
product demand, weather conditions, domestic and foreign government
regulations, political conditions in the Middle East and other production
areas, the foreign supply of oil and natural gas, the price and availability of
alternative fuels, and overall economic conditions. It is impossible to predict
future oil and gas price movements with any certainty.
The Company's oil and gas business is also subject to all of the operating
risks normally associated with the exploration for and production of oil and
gas, including, without limitation, blowouts, cratering, pollution,
earthquakes, labor disruptions and fires, each of which could result in
substantial losses to the Company due to injury or loss of life and damage to
or destruction of oil and gas wells, formations, production facilities or other
properties. In accordance with customary industry practices, the Company
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 the Company.
There can be no assurance that any insurance will be adequate to cover losses
or liabilities. The Company cannot predict the continued availability of
insurance, or its availability at premium levels that justify its purchase.
The Company's oil and gas business is also subject to laws, rules and
regulations in the countries in which the Company operates, which generally
pertain to production control, taxation, environmental and pricing concerns and
other matters relating to the petroleum industry. Many jurisdictions have at
various times imposed limitations on the production of oil and natural gas by
restricting the rate of flow for oil and natural gas wells below their actual
capacity. There can be no assurance that present or future regulation will not
adversely affect the operations of the Company.
Moreover, because the Company 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 was the operator or owner of a majority interest. Any
inability of the Company to meet its obligations in these and other contract
areas could have a material adverse effect on its interests in these contract
areas.
Financial Position. The Company reported income from continuing operations of
$24 million for the six months ended June 30, 1996 and $6.5 million for the
year ended December 31, 1995, but losses from continuing operations in the
seven month transition period ended December 31, 1994 and in each of the last
four fiscal years in the period ended May 31, 1994. To date, working capital
(amounting to $30.3 million as of June 30, 1996), external sources of funding,
asset sales and net cash flow from operations have been sufficient to service
the Company's existing debt obligations and capital spending programs. The
Company expects to pursue external financing alternatives and may from time to
time consider dispositions 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 the Company 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 the Company could realize therefrom. Moreover, the
Company's ability to pursue additional debt financing is limited by covenants
in the Company's credit facility as well as covenants in the indenture pursuant
to which $240 million principal amount of TEC 's 12 1/2% 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 TEC 's 9 3/4%
Senior Subordinated Discount Notes due 2000 (the "2000 Notes") were issued
in 1993.
For information regarding the Company's financial position and results of
operations, including the amounts of previous losses, the Company's net working
capital from time to time, and the Company's ratios of earnings to fixed
charges and earnings to combined fixed charges and preference dividends, see
"Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and
Preference Dividends" herein and TEC 's Consolidated Statements of Operations,
Consolidated Balance Sheets and Consolidated Statements of Cash Flows in TEC 's
Annual Report on Form 10-K and other documents incorporated herein by
reference, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in TEC 's Annual Report on Form
10-K for the year ended December 31, 1995 and in TEL's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996.
Environmental Matters. The Company 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 the Company to remove or
mitigate the environmental effects of the disposal or release of such materials
at various sites. The Company 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 the Company's
consolidated results of operations, cash flows or financial position. Pollution
and similar environmental risks generally are not fully insurable.
Risks of International Operations. The Company derives substantially all of its
consolidated revenues from international operations. Risks inherent in
international operations include loss of revenue, property and equipment from
such hazards as expropriation, nationalization, war, insurrection and other
political risks; trade protection measures; risks of increases in taxes and
governmental royalties; and renegotiation of contracts with governmental
entities; as well as changes in laws and policies governing operations of other
companies. Other risks inherent in international operations are the possibility
of realizing economic currency exchange losses when transactions are completed
in currencies other than United States dollars and the Company's ability to
freely repatriate its earnings under existing exchange control laws.
Certain Factors Relating to Colombia. The Company 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. The Company owns interests in three contiguous
areas known as the Santiago de las Atalayas ("SDLA"), Tauramena and Rio
Chitamena contract areas. Well results to date indicate that significant oil
and gas deposits lie across the SDLA, Tauramena and Rio Chitamena 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. The Company 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, the Company 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 the Company is not the operator of these contract areas,
the Company does not control the timing or manner of these operations.
Full development of reserves in the Cusiana and Cupiagua fields will more
than a year 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 and expanded
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, the Company 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.
Numerous Colombian government officials, including the President of
Colombia, are the subjects of investigations and allegations that claim they
have accepted illegal campaign contributions. These circumstances have led to
speculation as to whether these officials will remain in office. The President
of Colombia has stated that any such illicit contributions were made without
his knowledge. In response to the allegations, the leadership of the opposition
Conservative Party withdrew its support of the Government and certain cabinet
ministers and ambassadors and a high ranking military officer resigned. Any
changes in the holders of significant government offices could have adverse
consequences on the Company's relationship with the Colombian national oil
company and the Colombian government's ability to control guerilla activities,
and could exacerbate the factors relating to foreign operations discussed
above. Colombia is also among 31 nations whose progress in stemming the
production and transit of illegal drugs is subject to annual certification by
the President of the United States. In March 1996, the President of the United
States announced that Colombia would neither be certified nor granted a
national interest waiver. The consequences of the failure to receive
certification generally include the following: all bilateral aid, except anti-
narcotics and humanitarian aid, has been or will be suspended; the Export-
Import Bank of the United States ("EXIM") and the Overseas Private Investment
Corporation will not approve financing for new projects in Colombia, although
currently approved EXIM financings are not expected to be affected; U.S.
representatives at multilateral lending institutions will be required to vote
against all loan requests from Colombia, although such votes will not
constitute vetoes; and the President of the United States and Congress retain
the right to apply future trade sanctions. Each of these consequences of the
failure to receive such certification could result in adverse economic
consequences in Colombia and could further heighten the political and economic
risks associated with the Company's operations in Colombia.
Certain Factors Relating to Malaysia-Thailand. The Company is a partner in a
significant gas exploration project located in the upper Malay Basin in the
Gulf of Thailand approximately 450 kilometers northeast of Kuala Lumpur and 750
kilometers south of Bangkok. The Company is a contractor under a production
sharing contract covering Block A-18 of the Malaysia-Thailand Joint Development
Area. Test results for the initial exploratory wells indicate that significant
gas deposits lie under the block.
Development of gas production is in the early planning stages but is
expected to take several years and require the drilling of additional wells and
the installation of production facilities, which will require significant
additional capital expenditures, the ultimate amount of which cannot be
predicted. Pipelines will also be required to be connected between Block A-18
and ultimate markets. The terms on which any gas produced from the Company's
contract area in Malaysia-Thailand may be sold may be adversely affected by the
present monopoly gas purchase and transportation conditions in both Thailand
and Malaysia, including the Thai national oil company's monopoly in
transportation within Thailand and its territorial waters.
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the net
proceeds from the sale of the particular Securities offered by this Prospectus
and each Prospectus Supplement (the "Offered Securities") will be used
principally to continue funding the Company's obligations relating to the
development of its operations in Colombia and Malaysia-Thailand.
THE PLAN
The following questions and answers explain and constitute the Triton
Energy Limited Dividend Reinvestment and Stock Purchase Plan.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of TEL's Ordinary
Shares and Preference Shares and other interested investors with a
convenient and economical method to purchase Ordinary Shares and to
reinvest all or a portion of their cash dividends in Ordinary Shares,
although the Company does not expect to pay dividends on its Ordinary
Shares. In addition, the Plan will provide the Company with a cost-
efficient and flexible mechanism to raise equity capital for the
purposes outlined in the section of this Prospectus entitled "Use of
Proceeds" through sales of Ordinary Shares under the Plan. Whether
significant additional capital is raised may be affected, in part, by
the Company's decision to waive the limitations applicable to optional
cash investments. See Question 13 regarding the Company's criteria for
granting a Request for Waiver.
HOLDERS OF ORDINARY SHARES ARE CAUTIONED THAT THE EXISTENCE OF THE PLAN IN
NO WAY IMPLIES THAT THE COMPANY WILL MODIFY ITS CURRENT POLICY OF NOT PAYING
DIVIDENDS.
PARTICIPATION OPTIONS
2. What options are available under the Plan?
Registered holders or beneficial owners of Ordinary Shares or
Preference Shares (including the holders of 5% Preference Shares) of
TEL (each a "Participant") and other interested investors may elect to
participate in the Plan. Participants may make optional cash
investments to purchase Ordinary Shares, subject to a minimum
investment of $100 and a maximum investment of $10,000 per month.
Interested investors that are not shareholders of the Company may make
an initial optional cash investment in Ordinary Shares of not less than
$5,000 and not more than $10,000. In certain instances, however, TEL
may permit greater optional cash investments. See Question 12 regarding
optional cash investments and Question 13 regarding a Request for
Waiver. Participants may also have cash dividends, if any, on all or a
portion of their shares which are registered and are held by the Plan
automatically reinvested in Ordinary Shares.
3. What are the benefits and restrictions of the Plan?
Benefits
-- Eligible shareholders may purchase Ordinary Shares pursuant to
optional cash investments of not less than $100 and not more than
$10,000 (except with the consent of the Company) in any month.
Optional cash investments may be made occasionally or at regular
intervals, as each Participant desires. The Plan provides
Participants the opportunity to automatically reinvest cash
dividends, if any, on all or a portion of their Ordinary Shares or
Preference Shares in Ordinary Shares. Participants may make
optional cash investments even if dividends on their shares, if
any, are not being reinvested under the Plan.
-- Persons not presently shareholders of the Company may become
Participants by making an initial cash investment of not less than
$5,000 and not more than $10,000 (except with the consent of the
Company) to purchase Ordinary Shares under the Plan.
-- Ordinary Shares purchased directly from the Company under the Plan
will be issued initially at a 3% discount to the market price
without payment of brokerage commissions; such discount may be
decreased at the sole discretion of the Company at any time.
-- Participants will avoid the need for safekeeping of certificates
for Ordinary Shares credited to their Plan accounts and may submit
for safekeeping certificates held by them and registered in their
name. See Questions 15 and 16.
-- Participants that are registered holders may direct the
Administrator to sell or transfer all or a portion of their shares
held in the Plan. See Question 17.
-- Periodic statements reflecting all current activity in Plan
accounts, including purchases, sales and latest balances, will
simplify recordkeeping for registered holders. See Question 18.
Restrictions
-- Participants may not be able to depend on the availability of a
market discount regarding shares acquired under the Plan and
optional investments may be subject to the trading price for the
Ordinary Shares satisfying a minimum price condition. Initially, a
3% discount will be established for the purchase of shares
directly from the Company, and the establishment of such discount
will not insure the availability of a discount or the same
discount in future months. Each month, the Company may lower or
eliminate the discount or set any minimum price condition without
prior notice to Participants. In addition, although the Company
intends to issue shares directly in connection with the Plan, the
Company may also, without prior notice to Participants, change its
determination as to whether Ordinary Shares will be purchased by
the Administrator directly from the Company or in the open market
or in privately negotiated transactions from third parties
(although the Company may not effect such a change more than once
in any three month period). See Question 13.
-- Participants will not know the actual number of shares purchased
under the Plan until after the Investment Date. See Question 11
regarding the timing of the purchase of shares.
-- The purchase price per share will be an average price and,
therefore, may exceed the price at which shares are trading on the
Investment Date when the shares are issued. See Questions 11 and
12 regarding the purchase price of the shares and Question 13
regarding the establishment of a minimum price condition.
-- Execution of sales of shares held in the Plan may be subject to
delay. See Questions 12 and 17.
-- No interest will be paid on funds held by the Company pending
reinvestment or investment. See Questions 12 and 14.
-- Shares deposited in a Plan account may not be pledged until the
shares are withdrawn from the Plan. See Question 26.
4. Who will administer the Plan?
The Plan will be administered by ______________ (the
"Administrator"), or such successor administrator as TEL may designate
(the "Administrator"). The Administrator acts as agent for
Participants, keeps records of the accounts of Participants, sends
regular account statements to Participants, and performs other duties
relating to the Plan. Shares purchased for each Participant under the
Plan will be held by the Administrator and will be registered in the
name of such Participant, unless and until a Participant requests that
a stock certificate for all or part of such shares be issued, as more
fully described in Question 15. Correspondence with the Administrator
should be sent to:
________________________________
________________________________
________________________________
________________________________
or call: _________________________
PARTICIPATION
5. Who is eligible to participate?
A "registered holder" (which means a shareholder whose Ordinary
Shares or Preference Shares are registered in the stock transfer books
of TEL in his or her name) or a "beneficial owner" (which means a
shareholder whose Ordinary Shares or Preference Shares, as the case may
be, are registered in a name other than his or her name, for example,
in the name of a broker, bank, or other nominee), may participate in
the Plan. A registered holder may participate in the Plan directly; a
beneficial owner must either become a registered holder by having such
shares transferred into his or her name or by making arrangements with
his or her broker, bank or other nominee to participate in the Plan on
the Participant's behalf. In addition, an interested investor that is
not a shareholder may participate in the Plan by making an initial
optional cash investment in Ordinary Shares of not less than $5,000 or
more than $10,000 unless granted a Request for Waiver (in which case
such initial investment may exceed $10,000). See Question 6 regarding
enrollment.
The right to participate in the Plan is not transferable to another
person apart from a transfer of the underlying shares. TEL reserves the
right to exclude from participation in the Plan persons who utilize the
Plan to engage in short-term trading activities that cause aberrations
in the trading volume of the Ordinary Shares.
Participants residing in jurisdictions in which their participation
in the Plan would be unlawful will not be eligible to participate in
the Plan.
ENROLLMENT
6. How does an eligible holder of Ordinary Shares, Preference Shares or
any other interested investor enroll in the Plan and become a
Participant?
Each eligible registered holder may enroll in the Plan and become a
Participant by completing and signing an Authorization Card (enclosed
herein) and returning it to the Administrator at the address set forth
in Question 4. An Authorization Card may also be obtained at any time
upon request from the Administrator at the same address. If shares are
registered in more than one name (e.g., joint tenants, trustees), all
registered holders of such shares must sign the Authorization Card
exactly as their names appear on the account registration.
Eligible beneficial owners must instruct their brokers, banks or
other nominees in whose name their shares are held to participate in
the Plan on their behalf. If a broker, bank or other nominee holds
shares of beneficial owners through a securities depository, such
broker, bank or other nominee may also be required to provide a Broker
and Nominee Form (a "B/N Form") to the Administrator in order to
participate in the optional cash investment portion of the Plan. See
Question 12.
An interested investor who is not presently a shareholder of the
Company, but desires to become a Participant by making an initial
investment in Ordinary Shares, may join the Plan by signing an
Authorization Card and forwarding it, together with such initial
investment, to the Administrator at the address set forth in Question
4. See Question 12 regarding initial optional cash investments.
7. What does the Authorization Card provide?
During those times when the Company is not paying a dividend, the
Authorization Card will relate solely to optional cash investments to
be made for purchase of additional shares and will be called
"Authorization Card for Optional Cash Investments". Such Authorization
Card will appoint the Administrator as agent for the Participant and
direct the Administrator to apply the optional cash investment
transmitted therewith as well as optional cash investments subsequently
submitted to the purchase on such Participant's behalf of full and
fractional Ordinary Shares in accordance with the Plan.
During those times when the Company is paying a dividend, the
Authorization Card, which will be called "Authorization Card for
Reinvestment of Dividends and for Optional Cash Investments", will
appoint the Administrator as agent for the Participant and direct the
Company to pay to the Administrator the Participant's cash dividends on
all or a specified number of the Preference Shares and Ordinary Shares
owned by the Participant on the applicable record date and designated
by the Participant to be included in the Plan; and to reinvest, at the
Participant's discretion, cash dividends on whole and fractional
Ordinary Shares that have been credited to the Participant's account
pursuant to dividend reinvestment or optional cash investment that have
been designated to be included in the Plan ("Plan Shares"). The
Authorization Card will also direct the Administrator to purchase
Ordinary Shares with any optional cash investments that the Participant
may elect to make. Cash dividends will continue to be reinvested with
respect to the number of Preference Shares and Ordinary Shares
designated on the Authorization Card and all Plan Shares until the
Participant specified otherwise in writing or terminates participation
in the Plan and until the Plan is terminated.
The Authorization Card for the Reinvestment of Dividends and for
Optional Cash Investments provides for the purchase of Ordinary Shares
through the following investment options:
(1) "Full Dividend Reinvestment"
This option directs the Administrator to invest in accordance with
the Plan all cash dividends on all whole or fractional Preference
Shares and Ordinary Shares then or subsequently registered in the
Participant's name. This option also permits the Participant to
make optional cash investments and directs the Administrator to
apply such investments towards the purchase of Ordinary Shares in
accordance with the Plan.
(2) "Partial Dividend Reinvestment"
This option directs the Administrator to invest in accordance with
the Plan all cash dividends on the specified number of whole or
fractional Preference Shares and Ordinary Shares then registered
in the Participant's name and so designated in the appropriate
space on the Authorization Card. If this option is selected, the
Participant will continue to receive cash dividends in the usual
manner on all Preference Shares and Ordinary Shares that have not
been designated for participation in the Plan. This option also
permits the Participant to make optional cash investments and
directs the Administrator to apply such investments towards the
purchase of Ordinary Shares in accordance with the Plan.
(3) "Optional Cash Investments Only"
This option permits a Participant to make optional cash
investments and directs the Administrator to apply such
investments towards the purchase of Ordinary Shares in accordance
with the Plan. If this option is selected, unless the Participant
designates that such additional shares for participation in the
Plan, the Participant will continue to receive cash dividends on
all Preference Shares and Ordinary Shares registered in his or her
name in the usual manner, and the Administrator will apply only
optional cash investments received from the Participant towards
the purchase of Ordinary Shares.
Any one of the above three options may be selected. In each case,
cash dividends will be reinvested on all shares designated for
participation in the Plan until the Participant specifies otherwise or
withdraws from the Plan altogether, or until the Plan is terminated.
Any Participant who returns a properly executed Authorization Card to
the Administrator without electing an investment option will be
enrolled as having selected Full Dividend Reinvestment.
The Authorization Card is designed to be used by a shareholder whose
shares are registered in his or her name for the investment of optional
cash payments or for the reinvestment of cash dividends, if any, or
both. In addition, the Authorization Card is designed to be used by a
broker, bank or other nominee as owner of record on behalf of a
beneficial owner for the investment of optional cash payments or for
the reinvestment of dividends, if any, or both.
8. When will participation in the Plan begin?
A Participant who has properly completed and submitted an
Authorization Card may submit an optional cash investment to purchase
shares under the Plan with such Authorization Card at any time.
Thereafter, optional cash investments may be made at any time, but not
more frequently than once each month, through the use of the
appropriate forms sent to Participants with each periodic statement.
Payments received by the Administrator prior to the first day of a
Pricing Period (as defined in Question 11) will be used to purchase
shares on the Investment Date (as defined below) immediately following
such Pricing Period.
If a properly completed Authorization Card requesting reinvestment of
dividends is received by the Administrator on or before the record date
established by the Company's Board of Directors for a particular
Preference Share or Ordinary Share cash dividend, that dividend will be
used to purchase Ordinary Shares for the Participant on the applicable
dividend payment date established by the Company's Board of Directors.
If an Authorization Card is received from a Participant after the
record date established for a particular dividend, the reinvestment of
dividends will begin on the dividend payment date following the next
dividend record date. For a discussion of the price to Participants of
the Ordinary Shares purchased under the Plan and the limitations on
optional cash investments, see Questions 11 and 13, respectively.
The dates on which optional cash investments are to be invested and
any Preference Share or Ordinary Share dividend payment dates are
herein collectively referred to as the "Investment Dates". For
optional cash investments, the Investment Date will be the first
Trading Day (as defined below) subsequent to the Pricing Period. A
"Trading Day" means a day on which trades in Ordinary Shares are
reported on the New York Stock Exchange (the "NYSE").
The record date for optional cash purchases is the business day
immediately preceding the first day of the Pricing Period to which the
Investment Date relates.
No interest will be paid on optional cash investments or cash
dividends pending investment in Ordinary Shares.
Eligible shareholders and other interested investors may enroll in
the Plan at any time. Once enrolled, a Participant will remain enrolled
until the Participant discontinues participation or until the Company
terminates the Plan. See Question 19 regarding withdrawal from the Plan
and Question 26 regarding termination of the Plan.
PURCHASES
9. When will shares be acquired under the Plan?
If shares are being acquired for the Plan directly from the Company,
dividends and optional cash investments will be reinvested or invested,
as the case may be, on the Investment Date.
If shares are being acquired for the Plan through open market or
privately negotiated transactions, all dividends and all optional cash
investments will be applied to the purchase of Ordinary Shares pursuant
to the Plan as soon as practicable on or after the applicable
Investment Date.
10. What is the source of shares to be purchased under the Plan?
The Company anticipates that optional cash investments and dividends
reinvested through the Plan will be used to purchase shares directly
from TEL, either from treasury or authorized but unissued Ordinary
Shares. The Company may, however, determine instead to purchase shares
on the open market or in privately negotiated transactions from third
parties, or both purchase shares from third parties and issue shares
directly.
11. What will be the price to the Participant of Ordinary Shares purchased
under the Plan?
The price to Participants of Ordinary Shares purchased directly from
the Company with optional cash payments or with cash dividends will
initially be 97% of the average of the Daily Prices (defined below) of
the Ordinary Shares for the twelve Trading Days ending immediately
preceding the applicable Investment Date, excluding from the average,
in the case of purchases with optional cash investments in excess of
$10,000 in a given month, any Daily Price which does not equal or
exceed any applicable Threshold Price (defined below). The period
encompassing the first twelve Trading Days of each month constitutes
the relevant "Pricing Period" for that particular month. The Daily
Price for a Trading Day shall be the average of the high and low
trading prices of the Ordinary Shares on that day on the NYSE, rounded
to three decimal places.
The Company may, in its sole discretion, establish for any given
Pricing Period a minimum price for the investment of optional cash
payments in excess of $10,000 pursuant to a Request for Waiver (the
"Threshold Price"). Any such Threshold Price will be a stated dollar
amount established by the Company at least three Trading Days prior to
the commencement of each Pricing Period. In addition, the Company may,
at any time in its sole discretion, decrease the discount applicable to
purchasers of Ordinary Shares from the Company. See Question 13.
If the Company exercises its option to purchase Ordinary Shares from
third parties, all shares so purchased by the Administrator will be
acquired as soon as practicable on or after the applicable Investment
Date at a price to the Participant of the weighted average purchase
price for such shares, including brokerage fees and commissions,
computed up to three decimal places, if necessary, paid by the
Administrator for the Ordinary Shares.
12. How are optional cash investments made?
All registered holders, including brokers, banks and nominees with
respect to shares registered in their name on behalf of beneficial
owners that have submitted signed Authorization Cards, are eligible to
make optional cash investments at any time.
A broker, bank or nominee, as holder on behalf of a beneficial owner,
may utilize an Authorization Card for optional cash investments unless
it holds the shares in the name of a securities depository. In that
event, the optional cash investment must be accompanied by a broker and
Nominee Form ("B/N Form").
The B/N Form provides the sole means whereby a broker, bank or other
nominee holding shares on behalf of beneficial owners in the name of a
securities depository may make optional cash investments on behalf of
such beneficial owners. In such case, the broker, bank or other nominee
must use a B/N Form for transmitting optional cash investments on
behalf of the beneficial owners. A B/N Form must be delivered to the
Administrator at the address specified in Question 4 each time that
such broker, bank or other nominee transmits optional cash investments
on behalf of the beneficial owners. B/N Forms will be furnished by the
Administrator upon request.
Other interested investors that are not shareholders of the Company,
but have submitted Authorization Cards and funds representing their
desired initial investment, are also eligible to make such an initial
investment in Ordinary Shares through an optional cash investment.
The Administrator will apply all optional cash investments for which
good funds are received on or before the first business day before the
Pricing Period to the purchase of Ordinary Shares on the next following
Investment Date, or if shares are acquired on the open market or in
privately negotiated transactions, as soon as practicable on or after
such Investment Date.
No interest will be earned on optional cash investments held pending
investment. The Company suggests therefore that any optional cash
investment a Participant wishes to make be sent so as to reach the
Administrator as close as possible to the first business day preceding
the Pricing Period for the next following Investment Date. Any
questions regarding these dates should be directed to the Administrator
at the address or telephone number set forth in Question 4.
All optional cash investments received by the Administrator after the
close of business on the last business day immediately preceding the
first day of the Pricing Period and before the next succeeding
Investment Date will promptly be returned to the Participant without
interest.
Participants should be aware that since investments under the Plan
are made as of specified dates, one may lose any advantage that
otherwise might be available from being able to select the timing of an
investment. Neither the Company nor the Administrator can assure a
profit or protect against a loss on Ordinary Shares purchased under the
Plan.
All optional cash investments made by check should be made payable to
________ and mailed to the Administrator at the address listed in
Question 4. Other forms of payment, such as wire transfers, may be
made, but only if approved in advance by the Administrator. Inquires
regarding other forms of payments and all other written inquires should
be directed to the Administrator at the address listed in Question 4.
13. What limitations apply to optional cash investments?
Minimum/Maximum Limits. For any Investment Date, optional cash
investments made by shareholders of the Company are subject to a
minimum of $100 and a maximum of $10,000, and optional cash investments
made by interested investors who are not then shareholders of the
Company are subject to a minimum initial investment of $5,000 and a
maximum of $10,000. See Question 9 regarding the determination of
Investment Dates for optional cash investments. Optional cash
investments of less than the allowable monthly minimum amount and that
portion of any optional cash investment that exceeds the allowable
monthly maximum amount will be returned, except as noted below,
promptly to Participants, without interest.
Request for Waiver. Optional cash investments in excess of $10,000
per month may be made only pursuant to a request for waiver (a "Request
for Waiver") accepted by the Company. Participants who wish to submit
an optional cash investment in excess of $10,000 for any Investment
Date must obtain the prior written approval of the Company and a copy
of such written approval must accompany any such optional cash
investment. A Request for Waiver should be directed to the Company at
( ) - . The Company has sole discretion to grant any approval
for optional cash investments in excess of the allowable maximum
amount. In deciding whether to approve a Request for Waiver, the
Company will consider relevant factors including, but not limited to,
the Company's need for additional funds, the attractiveness of
obtaining such additional funds through the sale of Ordinary Shares as
compared to other sources of funds, the purchase price likely to apply
to any sale of Ordinary Shares, the Participant submitting the request,
the extent and nature of such Participant's prior participation in the
Plan, the number of Ordinary Shares held of record by such Participant
and the aggregate amount of optional cash investments in excess of
$10,000 for which Request for Waiver have been submitted by all
Participants. If Requests for Waiver are submitted for any Investment
Date for an aggregate amount in excess of the amount the Company is
then willing to accept, the Company may honor such requests in order of
receipt, pro rata or by any other method that the Company determines to
be appropriate. Upon granting any Request for Waiver the Company may,
at its sole discretion, reduce the Discount (as defined below) with
respect to that portion of the optional cash investment that exceeds
$10,000,
TEL reserves the right to modify, suspend or terminate participation
in the Plan by otherwise eligible registered holders or beneficial
owners of Ordinary Shares for any reason whatsoever including
elimination of practices that are not consistent with the purposes of
the Plan.
Threshold Price. TEL may establish for any Pricing Period a Threshold
Price applicable to optional cash investments made pursuant to Requests
for Waiver. The Threshold Price will not apply to the entire optional
cash investment made pursuant to a Request for Waiver, but only to that
portion of the optional cash investment that exceeds $10,000 (the
"Excess Amount"). At least three Trading Days prior to the first day of
the applicable Pricing Period, TEL will determine whether to establish
a Threshold Price, and if a Threshold Price is established, its amount,
and will so notify the Administrator. This determination will be made
by TEL in its discretion after a review of current market conditions,
the level of participation in the Plan, and current and projected
capital needs.
If established for any Pricing Period, the Threshold Price will be
stated as a dollar amount that the average of the high and low sale
prices of the TEL on the NYSE for each Trading Day of the relevant
Pricing Period must equal or exceed. In the event that the Threshold
Price is not satisfied for a Trading Day in the Pricing Period, then
that Trading Day will be excluded from the Pricing Period and all
trading prices for that day will be excluded from the determination of
the purchase price. A day will also be excluded if no trades of
Ordinary Shares are made on the NYSE for that day. Thus, for example,
if the Threshold Price is not satisfied for three of the twelve Trading
Days in a Pricing Period, then the purchase price will be based upon
the remaining nine Trading Days in which the Threshold Price was
satisfied.
In addition, a portion of the Excess Amount will be returned for each
Trading Day of a Pricing Period in which the Threshold Price is not
satisfied or for each day in which no trades of Ordinary Shares are
reported on the NYSE. The returned amount will equal one-twelfth of the
Excess Amount for each Trading Day that the Threshold Price is not
satisfied. Thus, for example, if the Threshold Price is not satisfied
or no such sales are reported for three of the twelve Trading Days in a
Pricing Period, 3/12 (i.e., 25%) of the Excess Amount of such optional
cash investment will be returned to the Participant without interest.
The establishment of the Threshold Price and the possible return of a
portion of the investment applies only to the Excess Amount. Setting a
Threshold Price for a Pricing Period shall not affect the setting of a
Threshold Price for any subsequent Pricing Period. For any particular
month, TEL may waive its right to set a Threshold Price. Neither TEL
nor the Administrator shall be required to provide any written notice
to Participants as to the Threshold Price for any Pricing Period.
Participants may, however, ascertain whether a Threshold Price has been
set or waived for any given Pricing Period by telephoning TEL at
( ) - .
Discount. The discount (the "Discount") applicable to shares
purchased directly from TEL under the Plan initially will be 3%.
However, such discount may be changed, in the sole discretion of the
Company, in accordance with the following procedures. Each month, at
least three Trading Days prior to the first day of the applicable
Pricing Period, TEL may decrease the Discount from the market price
applicable to all purchases of Ordinary Shares made directly from TEL
pursuant to the Plan from 3% to 0% or any percentage in between. Once
established, such Discount will apply uniformly to all purchases of
Ordinary Shares directly from the Company made pursuant to the Plan for
that month, except that the Discount may be decreased with respect to
the portion of shares purchased over $10,000 in connection with an
optional cash investment made pursuant to a Request for Waiver. Any
change in the Discount will be made in TEL's sole discretion after a
review of current market conditions, the level of participation in the
Plan, and current and projected capital needs. Participants may obtain
the Discount applicable to the next Pricing Period by telephoning TEL
at ( ) - . Setting a Discount for a particular month shall not
affect the setting of a Discount for any subsequent month.
14. What if a Participant has more than one account?
For the purpose of the limitations discussed in Question 13, TEL may
aggregate all dividend reinvestments and optional cash investments for
Participants with more than one account using the same social security
or taxpayer identification number. For Participants unable to supply a
social security or taxpayer identification number, their participation
may be limited by TEL to only one Plan account.
Also for the purpose of such limitations, all Plan accounts that TEL
believes to be under common control or management or to have common
ultimate beneficial ownership may be aggregated. Unless TEL has
determined that reinvestment of dividends and optional cash investments
for each such account would be consistent with the purposes of the
Plan, TEL will have the right to aggregate all such accounts and to
return, without interest, within thirty days of receipt, any amounts in
excess of the investment limitations applicable to a single account
received in respect of all such accounts.
CERTIFICATES
15. Will certificates be issued for share purchases?
All shares purchased pursuant to the Plan will be held in "book
entry" form through accounts maintained by the Administrator. This
service protects against the loss, theft, or destruction of
certificates evidencing shares. Upon written request of a Participant
or upon withdrawal of a Participant from the Plan or upon termination
of the Plan, the Administrator will have certificates issued and
delivered for all full shares credited to that Participant's account.
Certificates will be issued only in the same names as those enrolled in
the Plan. In no event will certificates for fractional shares be
issued. See Questions 16 and 17.
16. May a Participant add Ordinary Shares to his or her account by
transferring share certificates that the Participant possesses?
Any Participant may send to the Plan for safekeeping all Ordinary
Share certificates which such Participant holds. The safekeeping of
shares offers the advantage of protection against loss, theft or
destruction of certificates as well as convenience, if and when shares
are sold through the Plan. All shares represented by such certificates
will be kept for safekeeping in "book entry" form and combined with any
full and fractional shares then held by the Plan for the Participant.
To deposit certificates for safekeeping under the Plan, a Participant
must submit a letter of transmittal, which will be provided by the
Administrator upon request. Stock certificates and the letter of
transmittal as well as all written inquiries about the safekeeping
service should be directed to the Administrator at the address listed
in Question 4.
Shares deposited for safekeeping may be withdrawn by the Participant
by submitting a written request to the Administrator.
SALE OF SHARES
17. Can Participants sell shares held under the Plan?
Participants may request that all or a portion of the shares held in
their accounts by the Plan (including shares held for safekeeping) be
sold. Following receipt of written instructions from a Participant, the
Administrator will sell, through an independent broker or institution,
those shares and will remit a check for the proceeds of such sale, less
applicable brokerage commissions, service charges and any taxes. Prior
written instructions from the Participant must be received at least 24
hours preceding the sale. Shares will be sold at least once per week by
the Plan at then current market prices in transactions carried out
through one or more brokerage firms. This procedure for selling shares
may be particularly attractive to holders of small amounts of Ordinary
Shares because the Plan can combine odd lots and small numbers of
shares into larger blocks to be sold, and thereby take advantage of
lower brokerage costs that otherwise might not be available to
individual Participants in the sale of their shares.
REPORTS
18. What reports will be sent to Participants in the Plan?
Unless a Participant participates in the Plan through a broker, bank
or nominee, each Participant will receive from the Administrator a
detailed statement of the Participant's account following each dividend
payment and account transaction. These detailed statements will show
total cash dividends received, total optional cash investments
received, total shares purchased (including fractional shares), price
paid per share, and total shares held in the Plan. These statements
should be retained by the Participant to determine the tax cost basis
for shares purchased pursuant to the Plan. Any Participant that
participates in the Plan through a broker, bank or nominee, should
contact such party for such a statement.
WITHDRAWAL
19. How may Participants withdraw from the Plan?
Except as set forth below, a Participant may terminate enrollment in
the Plan by giving written notice to the Administrator no later than
two days prior to the first day of the next Pricing Period, and
thereafter all cash dividends on shares owned by such Participant will
be sent to the Participant. See Question 17. In the event that a
purchase of Ordinary Shares on behalf of a Participant pursuant to the
Plan is pending, such Participant may not terminate enrollment until
the close of the Pricing Period. Any fractional shares held in the
Plan at the time of termination will be converted to cash on the basis
of the then current market price of the Ordinary Shares.
TAXES
20. What are the federal income tax consequences of participating in the
Plan?
For federal income tax purposes, Participants will be treated as
having received a distribution from the Company upon the purchase of
shares pursuant to the Plan with an optional cash investment in an amount
equal to the excess, if any, of the fair market value of the shares
acquired on the Investment Date over the optional cash investment. Any
such deemed distribution will be treated as a taxable dividend to the
extent attributable to current or accumulated earnings and profits of the
Company. The purchased shares will have a tax basis equal to the amount
of the optional cash investment plus the amount of the deemed
distribution, if any, which is treated as a dividend. The fair market
value of shares acquired on an Investment Date is likely to differ from
the optional cash investment.
Additionally, Participants will be treated as having received a
distribution from the Company equal to the fair market value on the
Investment Date of the shares acquired with reinvested dividends pursuant
to the Plan. Such distribution will be treated as a dividend to the
extent attributable to current or accumulated earnings and profits of the
Company. Any excess will first be treated as a tax-free return of
capital, causing a reduction in the basis of existing shares, and the
balance will be treated as capital gain recognized on a sale or exchange.
A Participant's tax basis in the dividend shares will equal the fair
market value of such shares on the Investment Date.
When a Participant receives certificates for whole shares credited to
the Participant's account under the Plan, the Participant will not realize
any taxable income. However, a Participant that receives a cash adjustment
for a fraction of a share may realize a gain or loss with respect to such
fraction. A gain or loss may also be realized by the Participant whenever
whole shares are sold, either pursuant to the Participant's request, upon
withdrawal from the Plan or after withdrawal from the Plan. The amount of
such gain or loss will be the difference between the amount that the
Participant realizes for the shares or fraction of a share and the tax
basis of the Participant in the shares.
A Participant's holding period for shares acquired pursuant to the
Plan will begin on the day following the Investment Date.
In the case of corporate shareholders, dividends may be eligible for
the dividends-received tax deduction.
The foregoing is only a summary of the federal income tax
consequences of participation in the Plan and does not constitute tax
advice. This summary does not reflect every possible outcome that could
result from participation in the Plan and, therefore, Participants are
advised to consult their own tax advisors with respect to the tax
consequences applicable to their particular situation.
OTHER PROVISIONS
21. What happens if a Participant sells or transfers shares or acquires
additional shares?
If a Participant has elected to have dividends automatically
reinvested in the Plan and subsequently sells or transfers all or any
part of the shares registered in the Participant's name, automatic
reinvestment will continue as long as shares are registered in the name
of the Participant or held for the Participant by the Administrator or
until termination of enrollment. Similarly, if a Participant has
elected the "Full Dividend Reinvestment" option under the Plan and
subsequently acquires additional shares registered in the Participant's
name, dividends paid on such shares will automatically be reinvested
until termination of enrollment. If, however, a Participant has elected
the "Partial Dividend Reinvestment" option and subsequently acquires
additional shares that are registered in the Participant's name,
dividends paid on such shares will not be automatically reinvested
under the Plan. See Question 7. Participants may, however, change their
dividend reinvestment elections by submitting new Authorization Cards.
22. How will a Participant's shares be voted?
For any meeting of shareholders, each Participant will receive proxy
materials in order to vote all shares held by the Plan for the
Participant's account. All shares will be voted as designated by the
Participant or may be voted in person at the meeting of shareholders.
23. Who pays the expenses of the Plan?
In the case of optional cash investments, Participants will have to
pay their pro rata share of any brokerage fees or commissions on
Ordinary Shares purchased for their account in open market or in
privately negotiated transactions, which sums will first be deducted
before determining the number of shares to be purchased. Participants
will not incur brokerage commissions or service charges in connection
with the reinvestment of dividends to purchase Ordinary Shares, or in
connection with optional cash investments in which shares are purchased
directly from the Company. However, the Administrator will charge an
administrative fee for optional cash investments and on sales of shares
made pursuant to the Plan. This fee will vary depending on whether the
transaction is initiated by a registered holder or through a broker,
bank or other nominee that holds shares through a securities
depository. These fees, as well as any related brokerage commissions
and applicable stock transfer taxes must be paid to the Administrator
at the time of the transaction, and will be deducted from the funds
received by the Administrator in the case of optional cash investments
and from the proceeds, in the case of sale of shares. The Administrator
may also charge Participants for additional services not provided under
the Plan or for other specified charges. Any of such administrative
fees may be changed by the Administrator at any time, without notice to
Participants. Participants may obtain a current listing of all
applicable administrative fees by contacting the Administrator at the
address or telephone number listed in Question 4 above. Brokers or
nominees that participate on behalf of beneficial owners for whom they
are holding shares may also charge such beneficial owners fees in
connection with such participation, for which neither the Administrator
nor the Company will be responsible.
24. What are the responsibilities of TEL or the Administrator under the
Plan?
Neither TEL nor the Administrator will be liable for any act done in
good faith or for any good faith omission to act, including, without
limitation, any claims of liability arising out of a failure to
terminate a Participant's account upon such Participant's death or
adjudication of incompetence prior to the receipt of notice in writing
of such death or adjudication of incompetence, the prices at which
shares are purchased for the Participant's account, the times when
purchases are made or fluctuations in the market value of the Ordinary
Shares. Neither TEL nor the Administrator has any duties,
responsibilities or liabilities except those expressly set forth in the
Plan.
The Participant should recognize that the Company cannot assure a
profit or protect against a loss on the shares purchased by a
Participant under the Plan.
25. What happens if TEL issues a stock dividend or declares a stock split?
Any Ordinary Shares distributed by TEL as a result of a stock
dividend or a stock split on shares held under the Plan for a
Participant will be credited to the Participant's account.
26. If TEL has a rights offering related to the Ordinary Shares, how will a
Participant's entitlement be computed?
A participant's entitlement in a rights offering related to the
Ordinary Shares will be based upon the number of whole shares credited
to the Participant's account. Rights based on a fraction of a share
credited to a Participant's Plan account will be sold for that account
and the net proceeds will be invested as an optional cash payment on
the next Investment Date. In the event of a rights offering,
transaction processing may be curtailed or suspended by the
Administrator for a short period of time following the record date for
such action to permit the Administrator to calculate the rights
allocable to each account.
27. May shares in a Participant's account be pledged?
No shares credited to a Participant's account may be pledged and any
such purported pledge will be void. If a Participant wishes to pledge
shares, those shares must be withdrawn from the Plan.
28. May a Participant transfer all or a part of the Participant's shares
held in the Plan to another person?
A Participant may transfer ownership of all or part of his or her
shares held in the Plan through gift, private sale or otherwise, by
mailing to the Administrator at the address in Question 4 a properly
executed stock assignment, along with a letter with specific
instructions regarding the transfer and both an Authorization Card and
a Form W-9 (Certification of Taxpayer Identification Number) completed
by the transferee. Requests for transfer of shares held in the plan are
subject to the same requirements as the transfer of Ordinary Share
certificates, including the requirement of a medallion signature
guarantee on the stock assignment. The Administrator will provide
Participants with the appropriate transfer forms upon request, and will
deliver a copy of this Prospectus to the transferee upon receipt of the
appropriate transfer forms from the Participant. If any stock
certificates bearing a restrictive legend are contained in the
Participant's Plan account, the Administrator will comply with the
provisions of such restrictive legend before effecting a sale or
transfer of such restricted shares.
A Participant may also transfer all or a portion of his or her shares
into an account established for another person within the Plan. In
order to effect such a "book-to-book" transfer, the transferee must
complete an Authorization Card to open a new account within the Plan.
(See Question 7). The Authorization Card should be sent to the
Administrator along with a written request to effect the "book-to-book"
transfer indicating the number of shares to be transferred to the new
account.
29. May the Plan be changed or terminated?
While the Plan is intended to continue indefinitely, TEL reserves the
right to amend, modify, suspend or terminate the Plan at any time.
Participants will be notified in writing of any modifications made to
the Plan.
PLAN OF DISTRIBUTION AND UNDERWRITERS
Pursuant to the Plan, TEL may be requested to approve optional cash
investments in excess of the allowable maximum amounts pursuant to Requests for
Waiver on behalf of Participants that may be engaged in the securities
business. In deciding whether to approve such a request, TEL will consider
relevant factors including, but not limited to, whether the Plan is then
acquiring newly issued Ordinary Shares or acquiring shares through open market
purchases or privately negotiated transactions, the Company's need for
additional funds, the attractiveness of obtaining such funds by the sale of
Ordinary Shares under the Plan in comparison to other sources of funds, the
purchase price likely to apply to any sale of Ordinary Shares, the Participant
submitting the request, including the extent and nature of such Participant's
prior participation in the Plan and the number of Ordinary Shares held of
record by such Participant and the aggregate number of Requests for Waiver that
have been submitted by all Participants. Persons who acquire Ordinary Shares
through the Plan and resell them shortly after acquiring them, including
coverage of short positions, under certain circumstances, may be participating
in a distribution of securities that would require compliance with Rule 10b-6
under the Exchange Act and may be considered to be underwriters within the
meaning of the Securities Act. TEL will not extend to any such person any
rights or privileges other than those to which it would be entitled as a
Participant, nor will TEL enter into any agreement with any such person
regarding such person's purchase of such shares or any resale or distribution
thereof. TEL may, however, approve requests for optional cash investments by
such persons in excess of allowable maximum limitations. If such requests are
submitted for any Investment Date for an aggregate amount in excess of the
amount TEL is willing to accept, TEL may honor such requests in order of
receipt, pro rata or by any other method which TEL determines to be
appropriate.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Ordinary Shares
will be passed upon by W.S. Walker & Company, Grand Cayman, Cayman Islands.
EXPERTS
The consolidated financial statements of TEC as of and for the year ended
December 31, 1995, the seven months ended December 31, 1994 and the years ended
May 31, 1994 and 1993, incorporated herein by reference to TEC 's Annual Report
on Form 10-K for the year ended December 31, 1995, have been so incorporated in
reliance upon the report of Price Waterhouse LLP, 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
Energy Corporation 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.
No persons have been authorized to give any information or to make any
representations other than those contained or incorporated in this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities other than those to
which it relates, or an offer or solicitation with respect to those securities
to which it relates to any persons in any jurisdiction where such offer or
solicitation would be unlawful. The delivery of this Prospectus at any time
does not imply that the information contained or incorporated herein at its
date is correct as of any time subsequent to its date.
TABLE OF CONTENTS
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . 46
Incorporation of Certain Documents by Reference . . . . . . . . . . . . 46
Enforceability of Civil Liabilities Against Foreign Persons . . . . . . 47
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
The Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Plan of Distribution and Underwriters . . . . . . . . . . . . . . . . . 69
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Triton Energy Limited
Dividend Reinvestment
and Stock Purchase Plan
_________________________
PROSPECTUS
_________________________
________, 1996
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses payable by the Company in connection with the
offering described in this Registration Statement are as follows:
Registration Fee . . . . . . . . . . . $68,966
Legal fees and expenses . . . . . . . 250,000
Blue Sky fees and expenses . . . . . . 15,000
Accounting fees and expenses . . . . . 20,000
Printing and duplicating expenses . . 200,000
Miscellaneous expenses . . . . . . . . 5,000
---------
Total . . . . . . . . . . . . . . . $ 58,966
=========
<FN>
Item 15. Indemnification of Directors and Officers.
TEL is a Cayman Islands company. Article XXXIII of TEL's Articles of
Association contains provisions with respect to indemnification of TEL's
officers and directors. Such provisions provide that TEL shall indemnify, in
accordance with and to the full extent now or hereafter permitted by law, any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including, without limitation, an
action by or in the right of TEL), by reason of his acting as a director,
officer, employee or agent of, or his acting in any other capacity for or on
behalf of, TEL, against any liability or expense actually and reasonably
incurred by such person in respect thereof. TEL shall also advance the expenses
of defending any such act, suit or proceeding in accordance with and to the
full extent now or hereafter permitted by law. Such indemnification and
advancement of expenses are not exclusive of any other right to indemnification
or advancement of expenses provided by law or otherwise. The Articles of
Association also provide that except under certain circumstances, directors of
TEL shall not be personally liable to TEL or its shareholders for monetary
damages for breach of fiduciary duties as a director.
The Companies Law (1995 Revision) of the Cayman Islands does not set out
any specific restrictions on the ability of a company to indemnify officers or
directors. However, the application of basic principles and certain
Commonwealth case law which is likely to be persuasive in the Cayman Islands,
would indicate that indemnification is generally permissible except in the
event that there had been fraud or wilful default on the part of the officer or
director or reckless disregard of his duties and obligations to TEL.
II-2
TEC is a Delaware corporation. Reference is made to Section 102(b)(7) of
the Delaware General Corporation Law (the "DGCL"), which enables a corporation
in its original certificate of incorporation or an amendment thereto to
eliminate or limit the personal liability of a director for violations of the
director's fiduciary duty, except (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit.
Reference also is made to Section 145 of the DGCL, which provides that a
corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation), by reason of the fact that such person was an officer,
director, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such officer, director, employee or agent acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the corporation's best interests and, for criminal proceedings, had no
reasonable cause to believe that his conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the
right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses that
such officer or director actually and reasonably incurred.
The Certificate of Incorporation of TEC provides that except under
certain circumstances, directors of TEC shall not be personally liable to TEC
or its stockholders for monetary damages for breach of fiduciary duties as a
director. Article III of the By-laws of TEC provides for indemnification of
the officers and directors of TEC to the full extent permitted by applicable
law.
Item 16. Exhibits.
1.1 - Form of Underwriting Agreement (TEC Debt Securities and Warrants
to Purchase TEC Debt Securities).
1.2 - Form of Underwriting Agreement (TEL Debt Securities and Warrants
to Purchase TEL Debt Securities)
II-3
1.3 - Form of Underwriting Agreement (Equity Securities and Warrants
to Purchase Equity Securities).
4.1 - Form of TEC Debt Securities.
4.2 - Form of TEL Debt Securities.
4.3* - Form of TEC Senior Debt Indenture by and among TEC, TEL, as
guarantor, and The Chase Manhattan Bank, as Trustee.
4.4* - Form of TEC Senior Subordinated Debt Indenture by and among TEC,
TEL, as guarantor, and United States Trust Company of New York,
as Trustee.
4.5 - Form of TEL Senior Debt Indenture between TEL and The Chase
Manhattan Bank, as Trustee.
4.6 - Form of TEL Senior Subordinated Debt Indenture between TEL and
United States Trust Company of New York, as Trustee.
4.7 - Form of TEL Subordinated Debt Indenture between TEL and The
Chase Manhattan Bank, as Trustee.
4.8 - Form of Warrant Agreement for Preference Shares and Ordinary
Shares (including form of Warrant Certificate).
4.9* - Form of Warrant Agreement for TEC Debt Securities (including
form of Warrant Certificate).
4.10 - Form of Warrant Agreement for TEL Debt Securities (including
form of Warrant Certificate).
5.1* - Opinion of Simpson Thacher & Bartlett.
5.2* - Opinion of W.S. Walker & Company.
12.1 - Computation of Ratio of Earnings to Fixed Charges (incorporated
by reference to Exhibit 12.1 to TEL's Quarterly Report on Form
10-Q for the Quarter ended June 30, 1996 (the "Form 10-Q").
12.2 - Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends (incorporated by reference to Exhibit 12.2
to the Form 10-Q).
23.1 - Consent of Price Waterhouse LLP.
23.2* - Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1).
23.3* - Consent of W.S. Walker & Company (included in Exhibit 5.2).
23.4 - Consent of DeGolyer and MacNaughton, independent petroleum
engineers.
24.1 - Powers of Attorney of Board of Directors of TEL and TEC.
II-4
25.1 - Statement of eligibility of The Chase Manhattan Bank as Trustee
under the TEC Senior Debt Indenture.
25.2 - Statement of eligibility of The Chase Manhattan Bank as Trustee
under the TEL Senior Debt Indenture.
25.3 - Statement of eligibility of The Chase Manhattan Bank as Trustee
under the TEL Subordinated Debt Indenture.
25.4 - Statement of eligibility of United States Trust Company of New
York as Trustee under the TEC Senior Subordinated Debt
Indenture.
25.5 - Statement of eligibility of United States Trust Company of New
York as Trustee under the TEL Senior Subordinated Debt
Indenture.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the from of prospectus filed with the Commission
pursuant to Rule 462(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraph (1)(i) and (1)(ii) above do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrants pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934, as
II-5
amended (the "Exchange Act") that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the Triton
Energy Limited annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions set forth in response to Item 15, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and have duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Dallas, State of Texas, on August 30, 1996.
TRITON ENERGY LIMITED
By: /s/ Robert B. Holland, III
---------------------------
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
---------------- -------- --------
* President, Chief August 30, 1996
---------------- Executive
(Thomas G. Finck) Officer,
Chairman of the
Board
* Senior Vice August 30, 1996
---------------- President and
(Peter Rugg) Chief Financial
Officer
(Principal
Financial and
Accounting
Officer)
* Director August 30, 1996
----------------
(Ernest E. Cook)
II-7
* Director August 30, 1996
----------------
(Ray H. Eubank)
* Director August 30, 1996
----------------
(Jesse E. Hendricks)
* Director August 30, 1996
----------------
(John P. Lewis)
* Director August 30, 1996
----------------
(Michael E. McMahon)
* Director August 30, 1996
----------------
(Sheldon R. Erikson)
* Director August 30, 1996
----------------
(Wellslake D. Morse, Jr.)
* Director August 30, 1996
----------------
(Edwin D. Williamson)
* Director August 30, 1996
----------------
(Fitzgerald S. Hudson)
Director
----------------
(John R. Huff)
*By:/s/ Robert B. Holland, III August 30, 1996
------------------------
(Robert B. Holland, III)
as attorney in fact
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused these
Post-Effective Amendments to its Registration Statements to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Dallas,
State of Texas, on August 30, 1996.
TRITON ENERGY CORPORATION
By: /s/ Robert B. Holland, III
-------------------------------
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
---------- ----- ----
* President, Chief Executive August 30, 1996
- ------------------------------- Officer, Chairman of the Board
(Thomas G. Finck)
* Vice President (Principal August 30, 1996
- ------------------------------- Financial and Accounting
(Peter Rugg) Officer) and Director
/s/ Robert B. Holland, III Vice President, Secretary and August 30, 1996
- ------------------------------- Director
(Robert B. Holland, III)
*By:/S/ Robert B. Holland, III August 30, 1996
- -------------------------------
(Robert B. Holland, III)
as attorney in fact
II-9
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description of Exhibits Pages
1.1 - Form of Underwriting Agreement (TEC Debt Securities
and Warrants to Purchase TEC Debt Securities).
1.2 - Form of Underwriting Agreement (TEL Debt Securities
and Warrants to Purchase TEL Debt Securities)
1.3 - Form of Underwriting Agreement (Equity Securities
and Warrants to Purchase Equity Securities).
4.1 - Form of TEC Debt Securities.
4.2 - Form of TEL Debt Securities
4.3* - Form of TEC Senior Debt Indenture by and among TEC,
TEL, as guarantor, and The Chase Manhattan Bank, as
Trustee.
4.4* - Form of TEC Senior Subordinated Debt Indenture by
and among TEC, TEL, as guarantor, and United States
Trust Company of New York, as Trustee.
4.5 - Form of TEL Senior Debt Indenture between TEL and
The Chase Manhattan Bank, as Trustee
4.6 - Form of TEL Senior Subordinated Debt Indenture
between TEL and United States Trust Company of New
York, as Trustee
4.7 - Form of TEL Subordinated Debt Indenture between TEL
and The Chase Manhattan Bank, as Trustee
4.8 - Form of Warrant Agreement for Preference Shares and
Ordinary Shares (including form of Warrant
Certificate).
4.9* - Form of Warrant Agreement for TEC Debt Securities
(including form of Warrant Certificate).
4.10 - Form of Warrant Agreement for TEL Debt Securities
(including form of Warrant Certificate).
5.1* - Opinion of Simpson Thacher & Bartlett.
5.2* - Opinion of W.S. Walker & Company.
II-10
12.1 - Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12.1 to TEL's
Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1996 (the "Form 10-Q").
12.2 - Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Dividends (incorporated by
reference to Exhibit 12.2 to the Form 10-Q).
23.1 - Consent of Price Waterhouse LLP.
23.2* - Consent of Simpson Thacher & Bartlett (included in
Exhibit 5.1).
23.3* - Consent of W.S. Walker & Company (included in
Exhibit 5.2).
23.4 - Consent of DeGolyer and MacNaughton, independent
petroleum engineers.
24.1 - Powers of Attorney of Board of Directors of TEL and
TEC .
25.1 - Statement of eligibility of The Chase Manhattan Bank
as Trustee under the TEC Senior Debt Indenture.
25.2 - Statement of eligibility of The Chase Manhattan Bank
as Trustee under the TEL Senior Debt Indenture.
25.3 - Statement of eligibility of The Chase Manhattan Bank
as Trustee under the TEL Subordinated Debt
Indenture.
25.4 - Statement of eligibility of United States Trust
Company of New York as Trustee under the TEC Senior
Subordinated Debt Indenture.
25.5 - Statement of eligibility of United States Trust
Company of New York as Trustee under the TEL Senior
Subordinated Debt Indenture.
*To be filed by amendment.
II-11