As filed with the Securities and Exchange Commission on February 19, 1997
Registration No. 333-11703, 333-11703-01
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
AMENDMENT NO. 1
TO
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.)
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 Proposed
Title of each maximum maximum Amount
class of Amount offering aggregate of
securities to be price offering registration
to be registered registered per unit price fee
- - ---------------- ---------- -------- --------- -------------
Debt Securities,
Ordinary Shares,
Preference Shares,
Warrants <F1> . . . . . $300,000,000<F2> 100%<F3> $300,000,000<F2><F3> $99,270<F4>
<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 $300,000,000. 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
$300,000,000. 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> $68,966 previously paid in connection with the initial filing of the
Registration Statement on September 10, 1996.
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 $400,000,000 of Debt Securities of Triton Energy Limited and
Triton Energy Corporation and Warrants 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 and (B) Joint and Several Debt Securities and Joint and
Several Warrants of Triton Energy Limited and 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 February 19, 1997
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 Limited
Triton Energy Corporation
Debt Securities
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.
TEL and its wholly-owned subsidiary, Triton Energy Corporation ("TEC"),
may offer and sell from time to time, in one or more series, (i) their joint
and several unsecured debt securities consisting of notes, debentures or
other evidences of indebtedness (the "Joint and Several Debt Securities", and
together with the TEL Debt Securities, the "Debt Securities") which may be
senior ("Joint and Several Senior Debt Securities", and together with the TEL
Senior Debt Securities, the "Senior Debt Securities") or senior subordinated
("Joint and Several Senior Subordinated Debt Securities", and together with
the TEL Senior Subordinated Debt Securities, the "Senior Subordinated Debt
Securities") and (ii) warrants to purchase Joint and Several Debt Securities
(the "Joint and Several Warrants" and, together with the TEL Warrants, the
"Warrants"), or any combination of the foregoing.
The Preference Shares, Ordinary Shares, Debt Securities 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 Joint and Several
Debt Securities and Joint and Several Warrants may be offered at an aggregate
initial offering price not to exceed $400,000,000, 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,
and 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, and 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 5.
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 , 1997.
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, June
30, 1996 and September 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
General
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 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 .
Recent Developments
Year End Results (unaudited)
The Company reported 1996 earnings after preferred
dividends of $21.6 million, or $.59 per share, compared
with $1.9 million, or $.05 per share, for 1995. Total
revenues for 1996 rose 25% to $134 million from
1995 revenues of $107.5 million.
Production from the Cusiana and Cupiagua fields
averaged 174,000 barrels of oil per day (bpd) during
the year, a 35% increase over the prior year. The
Company's average oil sales price in 1996 increased 19%
to $19.60 per barrel versus $16.44 per barrel for 1995.
Earnings in 1996 were reduced by the noncash charge
the Company took in the fourth quarter of approximately
$38 million (aftertax) representing all costs
associated with the Company's Argentine operations
during the past twelve years.
Results for 1996 were affected favorable by a low
effective tax rate. The Company recognized a portion
of the expected benefit associated with current and
future utilization of net operating loss carryforwards
that more than offset tax expense in the United States
and Colombia.
For the fourth quarter of 1996, the Company
reported a loss after preferred dividends of $19.8
million, or $.53 per share, compared with earnings
after preferred dividends of $.6 million, or $.02 per
share, for the fourth quarter of 1995.
The loss resulted from the charge against Argentine
operations. Revenues for the fourth quarter of 1996
increased 36% to $36.2 million from revenues of $26.6
million for the year-ago quarter.
Reserves
The following table is a summary of the Company's net proved
reserves at December 31, 1996 and is based on estimates prepared
by the independent petroleum engineers, DeGolyer and
MacNaughton, with respect to all proved reserves in the
Cusiana and Cupiagua fields in Colombia, and on estimates
prepared by the Company's own petroleum engineers with respect
to all proved reserves in the Malaysia-Thailand Joint
Development Area and the Liebre field in Colombia.
Oil reserves data include natural gas liquids
and condensate.
Proved Proved Total
Developed Undeveloped Proved
-------------------- ------------------------ -----------------------
Oil Gas Oil Gas Oil Gas
(Mbbls) (MMcf) (Mbbls) (MMcf) (Mbbls) (MMcf)
------- ------ ------- ------ ------- ------
Colombia(<F1> 67,193 11,146 68,117 3,505 135,310 14,651
Malaysia-Thailand<F2> - - 24,700 871,100 24,700 871,100
Total 67,193 11,146 92,817 874,605 160,010 885,751
____________________
<FN>
<F1> Includes liquids to be recovered from the government oil company of
Colombia as reimbursement for precommerciality expenditures.
<F2> As of December 31, 1996, the Company did not have a contract for the
sale of gas to be produced from its interest in the Malaysia-Thailand
Joint Development Area. In estimating its reserves attributable to
such interest, the Company assumed that production from the interest
would be sold at prices for natural gas that the Company believed to
be equal to the most comparable market price at December 31, 1996.
There can be no assurance that the price to be provided in any gas
contract will be equal to the price used in the Company's
calculations.
Reserve estimates are approximate and may be
expected to change as additional information becomes
available. Furthermore, estimates of oil and gas
reserves, of necessity, are projections based on
engineering data, and there are uncertainties inherent
in the interpretation of such data as well as the
projection of future rates of production and the timing
of development expenditures. Reservoir engineering is a
subjective process of estimating underground
accumulations of oil and gas that cannot be measured in
an exact way, and the accuracy of any reserve estimate
is a function of the quality of available data and of
engineering and geological interpretation and judgment.
Accordingly, there can be no assurance that the
reserves set forth herein will ultimately be produced
nor can there be assurance that the proved undeveloped
reserves will be developed within the periods
anticipated.
RISK FACTORS
Certain statements included or incorporated by
reference in this Prospectus, such as statements
regarding proven oil and gas reserves and statements of
the Company's and management's expectations,
intentions, plans and beliefs, 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. Working capital (amounting to $21.9
million as of September 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
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
September 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").
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.
Colombia is among several 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 and the Overseas Private Investment Corporation
will not approve financing for new projects in
Colombia; 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.
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.
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 and for general corporate purposes, as well as
to retire or refinance existing debt obligations.
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
Nine Months Months
Ended Year Ended Ended
September 30, December 31, December 31, Years Ended May 31,
----------------- ------------ ------------ ------------------------------------------------
1996 1995 1995 1994 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ---- ----
Ratio of earnings
to fixed
charges . . . . . 1.9x 1.2x 1.1x <F1> <F1> <F1> <F1> 1.3x
Ratio of earnings
to combined
fixed charges
and preference
dividends . . . . 1.8x 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 nine months ended September
30, 1995 by $8,223,000, for the year ended December 31, 1995 by
$9,921,000, for 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 nine months ended September 30, 1995 by
$9,025,000, 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 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 Joint and Several Debt
Securities will be unsecured senior or senior
subordinated joint and several debt of TEL and TEC and
will be issued, in the case of Joint and Several Senior
Debt Securities, under a Senior Indenture (the "Joint
and Several Senior Debt Indenture") among TEC, TEL and
The Chase Manhattan Bank, as trustee, and in the case
of Joint and Several Senior Subordinated Debt
Securities, under a Senior Subordinated Indenture (the
"Joint and Several Senior Subordinated Debt Indenture")
among TEC, TEL and United States Trust Company of New
York, as trustee. The Joint and Several Senior Debt
Indenture and the Joint and Several Senior Subordinated
Debt Indenture are sometimes hereinafter referred to
individually as a "Joint and Several Indenture" and
collectively as the "Joint and Several Indentures." The
Joint and Several Senior Debt 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 Joint
and Several 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 Joint and Several 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 subordination. For
purposes of the summaries set forth below, the term
"Issuers" shall refer collectively to TEL and TEC in
the case of the Joint and Several Debt Securities and
the Joint and Several Indentures, and to TEL only in
the case of the TEL Debt Securities and the TEL
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 Joint and Several Debt Securities will be
unsecured senior or senior subordinated joint and
several obligations of TEL and 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 Joint
and Several Senior Debt Securities, Joint and Several
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 Issuers 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
Offered 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 Issuers 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.
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. The Issuers 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 Issuers if such Debt
Securities are offered and sold directly by the
Issuers. 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. The Issuers 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. The Issuers
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 the Issuers, 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 the Issuers within 90 days, the
Issuers will issue individual Debt Securities of such
series in exchange for the Global Security representing
such series of Debt Securities. In addition, the
Issuers may at any time and in their 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 the Issuers so specify
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 the Issuers, 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
either of the Issuers applicable to Debt Securities of
such series, continued for 90 days after written notice
to the Issuers by the Trustee or to the Issuers 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 either of the Issuers; and (f)
default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by either
of the Issuers 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 either of the Issuers 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 Issuers (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 Issuers
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 Issuers are required to furnish to the Trustee
annually a certificate as to compliance by the Issuers
with all conditions and covenants under each Indenture
(Section 4.3).
Discharge and Defeasance. Unless otherwise
specified in the applicable Prospectus Supplement, the
Issuers can discharge or defease their respective
obligations with respect to any series of Debt
Securities as set forth below (Article Ten).
The Issuers 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 Issuers 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 Issuers 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 either of
the Issuers is a party or by which it is bound; and
(iii) the Issuers 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 Issuers to maintain an
office or agency in respect of Debt Securities of such
series (Section 10.1).
The Issuers 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 Issuers 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 Issuers
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 Issuers 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
either or both of the Issuers 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) 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, (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, (i) provide for the issuance of Debt
Securities of any series in coupon form and
exchangeability of such Debt Securities for fully
registered Debt Securities, (j) modify, eliminate or
add to the provisions of such Indenture as necessary to
effect the qualification of such Indenture under the
Trust Indenture Act of 1939 and to add certain
provisions expressly permitted by such Act, (k) modify
the provisions to provide for the denomination of Debt
Securities in foreign currencies which shall not
adversely affect the interests of the holders of such
Debt Securities in any material respect and (l) in the
case of the Joint and Several Indentures, evidence and
provide for the release of TEC of its obligations under
the Joint and Several Indentures and such Debt
Securities. (Section 8.1).
Each Indenture also contains provisions permitting
the Issuers 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
Issuers 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 Issuers, 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 (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 Joint and Several Indentures provide
that TEC or TEL 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. (Section 9.1).
Condition for Release of TEC. Except as otherwise
provided in the applicable Prospectus Supplement, each
Joint and Several Indenture provides that TEC may be
released from its obligations under such Joint and
Several Indenture and the Joint and Several Debt
Securities, without the consent of the holders of the
Joint and Several Debt Securities of any series, if the
1997 Notes and the 2000 Notes issued by TEC are no
longer outstanding or if TEL or any successor to TEL
has assumed the obligations of TEC under such Joint and
Several Debt Securities. (Section 3.7 of the Joint and
Several Senior Debt Indenture and Section 3.6 of the
Joint and Several Senior Subordinated Debt Indenture).
In the event of such release, a taxable sale or
exchange of a Debt Security for a new Debt Security
will not be deemed to occur unless the release results
in a change in payment expectations with respect to
Debt Securities. For these purposes a change in
payment expectations with respect to a debt instrument
is generally deemed to occur if there is a substantial
enhancement or impairment of the obligor's capacity to
meet payment obligations under the debt instrument and
certain other conditions are met. In the event a
release were to be treated as a taxable sale or
exchange, a holder of a Debt Security would recognize
gain or loss on the sale or exchange and might 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
Issuers.
Limitations on Liens. The Senior Debt Indentures
provide that, so long as any Senior Debt Securities are
outstanding, the Issuers 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 an Issuer 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
an Issuer 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 an
Issuer or any Restricted Subsidiary (whether or not the
obligations secured thereby are assumed by an Issuer 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 an
Issuer or another Restricted Subsidiary; (d) any
mortgage, pledge, security interest, lien or
encumbrance arising from or in connection with a
conveyance by an Issuer 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 an Issuer 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 an Issuer 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 an Issuer or any wholly-owned
Subsidiary of TEL; (h) any mortgage, pledge, security
interest, lien or encumbrance created or assumed by an
Issuer 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 an Issuer 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 an Issuer
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. 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 Issuers. The Senior Subordinated
Debt Securities will rank senior to all existing and
future Indebtedness of the Issuers that is neither
Senior Indebtedness nor Senior Subordinated
Indebtedness, and only Indebtedness of the Issuers that
is Senior Indebtedness will rank senior to the Senior
Subordinated Debt Securities in accordance with the
subordination provisions of the Senior Subordinated
Debt Indentures.
"Senior Indebtedness" is defined in the TEL
Subordinated Debt Indenture and the Senior Subordinated
Debt Indentures with respect to either Issuer as
Indebtedness of such 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 such
Issuer to a wholly-owned Subsidiary of TEL,
(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 such Issuer in a proceeding under federal or
state bankruptcy laws and (e) trade payables.
"Senior Subordinated Indebtedness" of either Issuer
means the Senior Subordinated Debt Securities and any
other Indebtedness of such Issuer that ranks pari passu
with the Senior Subordinated Debt Securities (including
the 1997 Notes, the 2000 Notes and the Guarantees
thereof). Any Indebtedness of an Issuer that is
subordinate or junior by its terms in right of payment
to any other Indebtedness of such Issuer shall be
subordinate to Senior Subordinated Indebtedness of such
Issuer 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 such Issuer and (ii) is not
subordinated by its terms to any Indebtedness of such
Issuer which is not Senior Indebtedness of such Issuer.
"Subordinated Indebtedness" of either Issuer means
the Senior Subordinated Debt Securities, any other
Senior Subordinated Indebtedness of such Issuer and any
other Indebtedness that is subordinate or junior in
right of payment to Senior Indebtedness of such Issuer.
If (i) either Issuer should default in the payment
of any principal of, premium, if any, or interest, if
any, on any Senior Indebtedness of such 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 such 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
such 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 an 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 such 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 such Issuer in accordance
with the following provisions of this paragraph, such
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, such
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 an Issuer, a
receiver, conservator, liquidator or trustee of such
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) such
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 such 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) such
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 such
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
such 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 any 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 such 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 such 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 such
Issuer in accordance with the priorities then existing
among such holders until all Senior Indebtedness of
such 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 such Issuer, the holders of
Senior Subordinated Debt Securities, together with the
holders of any obligations of such Issuer ranking on a
parity with the Senior Subordinated Debt Securities,
will be entitled to be repaid from the remaining assets
of such 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 such 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 such 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 such 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 such
Issuer then outstanding in accordance with the
priorities then existing among such holders for
application to the payment of all Senior Indebtedness
of such Issuer remaining unpaid to the extent necessary
to pay all such Senior Indebtedness 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 either Issuer, holders of Senior
Indebtedness of such 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 247,469 shares of 5%
convertible preference shares, par value $.01 per share
(the "Convertible Preference Shares") outstanding at
January 31, 1997. 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
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 to be $34.41
per share) 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 Resolutions) 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
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 a
distribution of the rights. If, among other events, any
person becomes the beneficial owner of 15% or more of
the Ordinary Shares (except as aforesaid), 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
(except as aforesaid) 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 36,363,264 Ordinary Shares
outstanding as of January 31, 1997.
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 Company's credit facility as well
as 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
TEL and TEC may issue Warrants to purchase Joint
and Several Debt Securities and TEL may issue TEL
Warrants, including Warrants to purchase Ordinary
Shares or Preference Shares and Warrants to purchase
TEL Debt Securities. 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 (other than the Ordinary Shares),
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, as of and for the seven months ended
December 31, 1994, as of and for the year ended May 31,
1994 and for year ended May 31, 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 Limited and Triton Energy
Corporation and their 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 February 19, 1997
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 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 are expected to 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 loan
agreements and 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 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 , 1997.
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, June 30, 1996 and
September 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
General
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 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.
Recent Developments
Year End Results (unaudited)
The Company reported 1996 earnings after preferred
dividends of $21.6 million, or $.59 per share, compared
with $1.9 million, or $.05 per share, for 1995. Total
revenues for 1996 rose 25% to $134 million from
1995 revenues of $107.5 million.
Production from the Cusiana and Cupiagua fields
averaged 174,000 barrels of oil per day (bpd) during the
year, a 35% increase over the prior year. The Company's
average oil sales price in 1996 increased 19% to
$19.60 per barrel versus $16.44 per barrel for 1995.
Earnings in 1996 were reduced by the noncash charge
the Company took in the fourth quarter of approximately
$38 million (aftertax) representing all costs
associated with the Company's Argentine operations
during the past twelve years.
Results for 1996 were affected favorable by a low
effective tax rate. The Company recognized a portion
of the expected benefit associated with current and
future utilization of net operating loss carryforwards
that more than offset tax expense in the United States
and Colombia.
For the fourth quarter of 1996, the Company
reported a loss after preferred dividends of $19.8
million, or $.53 per share, compared with earnings
after preferred dividends of $.6 million, or $.02 per
share, for the fourth quarter of 1995.
The loss resulted from the charge against Argentine
operations. Revenues for the fourth quarter of 1996
increased 36% to $36.2 million from revenues of $26.6
million for the year-ago quarter.
Reserves
The following table is a summary of the Company's net proved
reserves at December 31, 1996 and is based on estimates prepared
by the independent petroleum engineers, DeGolyer and MacNaughton,
with respect to all proved reserves in the Cusiana and Cupiagua fields
in Colombia, and on estimates prepared by the Company's own petroleum
engineers with respect to all proved reserves in the Malaysia-Thailand
Joint Development Area and the Liebre field in Colombia. Oil reserves
data include natural gas liquids and condensate.
Proved Proved Total
Developed Undeveloped Proved
---------------------- ------------------------ -----------------------
Oil Gas Oil Gas Oil Gas
(Mbbls) (MMcf) (Mbbls) (MMcf) (Mbbls) (MMcf)
------- ------ ------- ------ ------- -------
Colombia<F1> 67,193 11,146 68,117 3,505 135,310 14,651
Malaysia-Thailand<F2> - - 24,700 871,100 24,700 871,100
Total 67,193 11,146 92,817 874,605 160,010 885,751
____________________
<FN>
<F1> Includes liquids to be recovered from the government oil company of
Colombia as reimbursement for precommerciality expenditures.
<F2> As of December 31, 1996, the Company did not have a contract for the
sale of gas to be produced from its interest in the Malaysia-Thailand
Joint Development Area. In estimating its reserves attributable to
such interest, the Company assumed that production from the interest
would be sold at prices for natural gas that the Company believed to
be equal to the most comparable market price at December 31, 1996.
There can be no assurance that the price to be provided in any gas
contract will be equal to the price used in the Company's
calculations.
Reserve estimates are approximate and may be
expected to change as additional information becomes
available. Furthermore, estimates of oil and gas
reserves, of necessity, are projections based on
engineering data, and there are uncertainties inherent
in the interpretation of such data as well as the
projection of future rates of production and the timing
of development expenditures. Reservoir engineering is a
subjective process of estimating underground
accumulations of oil and gas that cannot be measured in
an exact way, and the accuracy of any reserve estimate
is a function of the quality of available data and of
engineering and geological interpretation and judgment.
Accordingly, there can be no assurance that the
reserves set forth herein will ultimately be produced
nor can there be assurance that the proved undeveloped
reserves will be developed within the periods
anticipated.
RISK FACTORS
Certain statements included or incorporated by
reference in this Prospectus, such as statements
regarding proven oil and gas reserves and statements of
the Company's and management's expectations,
intentions, plans and beliefs, 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. Working capital (amounting to $21.9
million as of September 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
Company's net working capital from time to time, see
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 September 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").
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.
Colombia is among several 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 and the Overseas Private Investment Corporation
will not approve financing for new projects in
Colombia; 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.
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.
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
The net proceeds from the sale of the Ordinary
Shares offered hereby, to the extent purchased directly
from the Company, will be used principally to continue
funding the Company's obligations relating to the
development of its operations in Colombia and Malaysia-
Thailand and for general corporate purposes, as well as
to retire or refinance existing debt obligations.
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 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. Optional cash
investments submitted by brokerage firms or
other nominees on behalf of Participants will be
aggregated for purposes of determining whether
the $10,000 limit will be exceeded. 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 may be issued at a
discount to the market price without payment
of trading fees; such discount may vary each
month between 0% and 3% and may be changed
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 and therefore may find the Plan an
economical way to liquidate their holdings.
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. Any
discount established for the purchase of
shares directly from the Company will not
insure the availability of a discount or the
same discount in future months. Each month,
the Company may change 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.
-- 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 13.
-- Shares deposited in a Plan account may not
be pledged until the shares are withdrawn
from the Plan. See Question 27.
4. Who will administer the Plan?
The Plan will be administered by The Chase
Manhattan Bank (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:
The Chase Manhattan Bank
P.O. Box 750
Pittsburgh, PA 15230
or call: 1-800-953-2499
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. In certain circumstances, however,
TEL may permit greater optional cash
investments. See Question 6 regarding enrollment
and Question 13 regarding a Request for Waiver.
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. In addition, the Company
reserves the right to treat optional cash
investments submitted on forms reflecting
Participants with the same name, address or
social security or taxpayer identification
number as a single investment for purposes of
determining whether the $10,000 limit will be
exceeded.
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 and
Enrollment Form (enclosed herein) and returning
it to the Administrator at the address set forth
in Question 4. An Authorization and Enrollment
Form 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 and Enrollment Form 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. Optional cash investments submitted by
brokerage firms or other nominees on behalf of
Participants, whether on the same B/N Form or
different B/N Forms, will be aggregated for
purposes of determining whether the $10,000
limit will be exceeded. See Questions 12 and 13.
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 and Enrollment Form
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 and Enrollment Form
provide?
The Authorization and Enrollment Form will
appoint the Administrator as agent for the
Participant and direct the Administrator to
apply optional cash investments 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.
With respect to dividends, the Authorization
and Enrollment Form 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"). Cash dividends will continue to
be reinvested with respect to the number of
Preference Shares and Ordinary Shares (including
Plan Shares) designated on the Authorization and
Enrollment Form until the Participant specifies
otherwise in writing or terminates participation
in the Plan and until the Plan is terminated.
The Authorization and Enrollment Form
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 and Enrollment Form. 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 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 and Enrollment Form to
the Administrator without electing an investment
option will be enrolled as having selected Full
Dividend Reinvestment.
8. When will participation in the Plan begin?
A Participant who has properly completed and
submitted an Authorization and Enrollment Form
may submit an optional cash investment to
purchase shares under the Plan with such
Authorization and Enrollment Form. 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 and
Enrollment Form 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 next
Investment Date applicable to optional cash
investments following the dividend payment date.
If an Authorization and Enrollment Form is
received from a Participant after the record
date established for a particular dividend, the
reinvestment of dividends will begin with
respect to dividends paid 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 dividends are to be reinvested
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. Please see Appendix I
for information with respect to Pricing Periods,
Investment Dates and other information.
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 investments or with cash dividends
will be 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 pursuant to a Request for
Waiver in a given month, any Daily Price which
does not equal or exceed any applicable
Threshold Price (defined below). The Company may
establish a discount of 0% to 3% applicable to
shares purchased directly from TEL under the
Plan. See Question 13. 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 optional cash investments 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.
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 trading fees,
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
and Enrollment Forms 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 and Enrollment Form 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 are also eligible to
make such an initial investment in Ordinary
Shares through an optional cash investment by
submitting Authorization and Enrollment Forms
and funds representing their desired initial
investment.
The Administrator will apply all optional
cash investments for which good funds are
received on or before the first business day
immediately preceding the first day of 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 or dividends 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 first day of 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 first 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 The Chase Manhattan
Bank 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. Inquiries regarding other forms
of payments and all other written inquiries
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 (except
as noted below), 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 (except as noted below). See
Question 8 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.
Optional cash investments submitted by brokerage
firms or other nominees on behalf of
Participants, whether on the same B/N Form or
different B/N Forms, will be aggregated for
purposes of determining whether the $10,000
limit will be exceeded. In addition, the Company
reserves the right to treat optional cash
investments submitted on forms reflecting
Participants with the same name, address or
social security or taxpayer identification
number as a single investor for purposes of
determining whether the $10,000 limit will be
exceeded.
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, including those whose proposed
investments have been aggregated so as to exceed
$10,000 as described above, 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 Treasurer of the
Company at (214) 691-5200, or at such other
number as may be established by the Company from
time to time. 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 the full amount of such
optional cash investment and the Company may
agree to different Discounts among persons to
whom it has granted a Request for Waiver.
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 with respect to Optional
Cash Investments made pursuant to Requests for
Waiver. TEL may establish for any Pricing Period
a Threshold Price applicable to optional cash
investments made pursuant to Requests for
Waiver. 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. Participants may
ascertain whether a Threshold Price has been set
or waived for any given pricing period by
telephoning the Company at (214) 691-5200, or at
such other number as may be established by the
Company from time to time.
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 with respect to optional
cash investments made pursuant to Requests for
Waiver, 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 each optional cash
investment made pursuant to a Request for Waiver
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
total amount of such optional cash investment
(not just the amount exceeding $10,000) 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 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 optional cash
investments made pursuant to a Request for
Waiver. 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 the Company
at (214) 691-5200, or at such other number as
may be established by the Company from time to
time.
Discount. Each month, at least three Trading
Days prior to the first day of the applicable
Pricing Period, TEL may establish a discount
from the market price applicable to shares
purchased directly from TEL under the Plan in
connection with optional cash investments. Such
discount (the "Discount") may be between 0% and
3% of the purchase price and may vary each
month, but 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
optional cash investments 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 the Company at
(214) 691-5200, or at such other number as may
be established by the Company from time to time.
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 reserves the right to
aggregate all optional cash investments for
Participants with more than one account using
the same name, address or 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. In the
event the Company exercises its right to
aggregate investments and the result would be an
investment in excess of $10,000 without an
approved Request for Waiver, the Company will
return, without interest, within thirty days of
receipt, any amounts in excess of the investment
limitations.
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. Certificates
forwarded to the Administrator by registered
mail will be automatically covered by an
Administrator blanket bond up to the first
$100,000 of value. 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 be enrolled
in the Plan. Stock certificates 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 trading fees, 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 trading fees that otherwise might not be
available to individual Participants in the sale
of their shares. The initial trading fee for
sales of shares will be $15.00 per transaction
plus $.12 per share. See Question 23.
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, if any,
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 after the Investment
Date relating to such 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. If a Participant's Plan account
balance falls below one full share, the
Administrator reserves the right to liquidate
the fraction and remit the proceeds, less any
applicable fees, to the Participant at its
address of record.
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 and
Enrollment Forms.
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?
There is no fee for enrolling in the
program. Participation is voluntary and a
Participant may discontinue its participation at
any time. However, there are fees associated
with the Plan and the Administrator's services.
Initially, it is expected that shares for the
Plan will be purchased directly from the
Company, and therefore there will be no trading
fees or service charges in connection with
purchases of shares. However, where shares for
the Plan are purchased in the open market or in
privately negotiated transactions, Participants
will have to pay a fee initially equal to $5.00
per transaction plus $.12 per share in the case
of optional cash investments, payable through a
deduction from the amount invested. Participants
that request the sale of any of their shares
held in the Plan must pay a fee initially equal
to $15.00 per transaction plus $.12 per share
plus any applicable taxes. The Administrator may
effect any open market purchases and sales of
shares for the Plan through a broker-dealer (who
may be an affiliate of the Administrator), in
which case such broker-dealer will receive a
commission for effecting such transactions. The
Administrator may also charge Participants for
additional services not provided under the Plan
or where specified charges are indicated. Any
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 or give gifts of
Ordinary Shares to anyone by contacting the
Administrator and requesting a Gift/Transfer
Form. After the transfer or purchase is
completed, upon the request of a Participant,
the Administrator will send the Participant a
non-negotiable gift announcement, which the
Participant can present to the recipient. A
notice indicating the deposit of Ordinary Shares
will be forwarded to the recipient.
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 and Enrollment Form to open a new
account within the Plan. (See Question 7). The
Authorization and Enrollment Form 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 the anti-manipulation
regulations concerning security offerings 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 Triton
Energy Corporation as of and for the year ended
December 31, 1995, as of and for the seven months ended
December 31, 1994, as of and for the year ended May 31,
1994 and for year ended May 31, 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 Limited and Triton Energy
Corporation and their 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 . . . . . . . 2
Incorporation of Certain
Documents by Reference . . . 2
Enforceability of Civil
Liabilities Against Foreign
Persons . . . . . . . . . . . 2
The Company . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . 7
The Plan . . . . . . . . . . . . . 8
Plan of Distribution and
Underwriters . . . . . . . . 19
Legal Matters . . . . . . . . . . . 19
Experts . . . . . . . . . . . . . . 19
- - -------------------------------------------------------------------
- - -------------------------------------------------------------------
Triton Energy Limited
Dividend Reinvestment
and Stock Purchase Plan
_________________________
PROSPECTUS
_________________________
________, 1997
- - -------------------------------------------------------------------
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 . . . . . . . . . . . . . . . $99,270
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 . . . . . . . . . . . . . . . . . . .$589,270
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.
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.
See Exhibit Index.
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 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.
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 Amendment No. 1 to the Registration
Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of
Dallas, State of Texas, on February 14, 1997.
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 Amendment No. 1 to the
Registration Statement has been signed on February 14,
1997 by the following persons in the capacities
indicated.
Signature Title
* President, Chief
(Thomas G. Finck) Executive Officer, Chairman of the Board
* Senior Vice President and Chief Financial
(Peter Rugg) Officer (Principal Financial and
Accounting Officer)
* Director
(Ernest E. Cook)
* Director
(Ray H. Eubank)
* Director
(Jesse E. Hendricks)
* Director
(John P. Lewis)
* Director
(Michael E. McMahon)
* Director
(Sheldon R. Erikson)
* Director
(Wellslake D. Morse, Jr.)
* Director
(Edwin D. Williamson)
* Director
(Fitzgerald S. Hudson)
Director
(John R. Huff)
*By: /s/ Robert B. Holland, III
(Robert B. Holland, III)
as attorney in fact
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 this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of
Dallas, State of Texas, on February 14, 1997.
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 Amendment No. 1 to the
Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
* President, February 14,
(Thomas G. Finck) Chief 1997
Executive
Officer,
Chairman of
the Board
* Vice February 14,
(Peter Rugg) President 1997
(Principal
Financial
and
Accounting
Officer)
and
Director
/s/ Robert B. Holland, III Vice February 14,
(Robert B. Holland, III) President, 1997
Secretary
and
Director
*By: /s/ Robert B. Holland, III February 14,
(Robert B. Holland, III) 1997
as attorney in fact
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits
1.1 - Form of Underwriting Agreement (Joint and
Several Debt Securities and Warrants to
Purchase TEC Debt Securities).
1.2<F1> - Form of Underwriting Agreement (TEL Debt
Securities and Warrants to Purchase TEL
Debt Securities)
1.3<F1> - Form of Underwriting Agreement (Equity
Securities and Warrants to Purchase
Equity Securities).
4.1 - Form of Joint and Several Debt Securities.
4.2<F1>- Form of TEL Debt Securities
4.3 - Form of Joint and Several Senior Debt
Indenture by and among TEC, TEL and The Chase
Manhattan Bank, as Trustee.
4.4 - Form of Joint and Several Senior
Subordinated Debt Indenture by and among
TEC, TEL and United States Trust Company
of New York, as Trustee.
4.5<F1>- Form of TEL Senior Debt Indenture between
TEL and The Chase Manhattan Bank, as
Trustee
4.6<F1>- Form of TEL Senior Subordinated Debt
Indenture between TEL and United States
Trust Company of New York, as Trustee
4.7<F1>- Form of TEL Subordinated Debt Indenture
between TEL and The Chase Manhattan Bank,
as Trustee
4.8<F1>- Form of Warrant Agreement for Preference
Shares and Ordinary Shares (including
form of Warrant Certificate).
4.9 - Form of Warrant Agreement for Joint and
Several Debt Securities (including form
of Warrant Certificate).
4.10<F1>- 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<F1>- 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 September
30, 1996 (the "Form 10-Q").
12.2<F1>- 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<F1>- 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 Joint
and Several Senior Debt Indenture.
25.2<F1>- Statement of eligibility of The Chase
Manhattan Bank as Trustee under the TEL
Senior Debt Indenture.
25.3<F1>- 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 Joint and Several Senior
Subordinated Debt Indenture.
25.5<F1>- Statement of eligibility of United States
Trust Company of New York as Trustee
under the TEL Senior Subordinated Debt
Indenture.
<F1> Previously filed.