As filed with the Securities and Exchange Commission on July 17, 2001
Registration No. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COVANTA ENERGY CORPORATION
(Exact name of registrant as specified in charter)
Delaware 13-5549268
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
40 Lane Road Jeffrey R. Horowitz
Fairfield, New Jersey 07004 Senior Vice President-
(973) 882-9000 Legal Affairs and Secretary
and telephone (Address, including Covanta Energy Corporation
zip code, number, including area 40 Lane Road
code, of Registrant's Fairfield, New Jersey 07004
principal executive offices) (973) 882-9000
(Name, address, including zip code
and telephone number, including
area code, of agent for service
of process)
COVANTA CAPITAL TRUST I
COVANTA CAPITAL TRUST II
COVANTA CAPITAL TRUST III
(Exact name of registrant as specified in charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
c/o Covanta Energy Corporation Jeffrey R. Horowitz
40 Lane Road Covanta Capital Trust I,
Fairfield, New Jersey 07004 Covanta Capital Trust II and
(973) 882-9000 Covanta Capital Trust III
(Address, including zip code, c/o Covanta Energy Corporation
and telephone number, including 40 Lane Road
are code, of Registrant's Fairfield, New Jersey 07004
principal executive offices) (973) 882-9000
(Name, address, including zip code
and telephone number, including area
code, of agent for service of process)
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Copies to
Joseph A. Tato, Esq. William F. Gorin, Esq.
Stephen G. Rooney, Esq. Cleary, Gottlieb, Steen & Hamilton
LeBoeuf, Lamb, Greene & MacRae, L.L.P. One Liberty Plaza
125 West 55th Street New York, New York 10006-1470
New York, New York 10019 (212) 225-2000
(212) 424-8000
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Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this registration statement as determined by
market conditions.
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, please 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. [ ]
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CALCULATION OF REGISTRATION FEE
=================================================================================================================================
Title of Each Class of Securities to be Proposed Maximum Aggregate Offering Amount of Registration Fee
Registered(1) Price (2)(3)(4)(5)
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Debt Securities, Preferred Stock, Depositary $350,000,000 $87,500
Shares, Common Stock, Warrants, Stock Purchase
Contracts and Stock Purchase Units, Preferred
Securities and Guarantees of Preferred Securities
of Covanta Capital Trust I, Covanta Capital Trust
II and Covanta Capital Trust III ("Capital Trusts")
and certain backup undertakings(6)
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(1) Any securities registered hereunder may be sold separately or as units with
other securities registered hereunder and may include hybrid securities,
including a combination of features of certain of the securities registered
hereunder.
(2) Includes such indeterminate principal amount of debt securities, such
indeterminate number of shares of preferred stock, such indeterminate
number of shares of common stock, such indeterminate number of depositary
shares as may be issued in the event the Registrant elects to offer
fractional interests in preferred stock, and such indeterminate principal
amount of debt securities, or indeterminate number of shares of preferred
stock or common stock as may be issued upon conversion of, or in exchange
for, or upon exercise of, warrants, convertible or exchangeable debt
securities or preferred stock (including any securities issuable upon stock
splits and similar transactions pursuant to Rule 416 under the Securities
Act). Also includes such additional principal amount of debt securities
issued with an original issue discount such that the aggregate initial
public offering price of all debt securities will not exceed $350,000,000
less the dollar amount of other securities previously issued. Also includes
such indeterminate number of preferred securities of the Capital Trusts.
Each share of common stock registered hereunder includes an associated
right to purchase Junior Preferred Stock (as defined herein); such rights
are only exercisable upon the occurrence of certain prescribed events, none
of which has occurred and may only be transferred with the common stock. No
separate consideration is payable for such purchase rights.
(3) Estimated in accordance with Rule 457(o) solely for the purpose of
calculating the registration fee.
(4) No separate consideration will be received for securities that are issued
upon conversion of other securities.
(5) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or composite currencies.
(6) No separate consideration will be received for the guarantees. The
guarantees include the rights of holders of the preferred securities under
the guarantees and certain backup undertakings, comprised of obligations of
Covanta Energy Corporation under the subordinated indenture and any
supplemental indentures thereto and under the applicable trust agreement to
provide certain indemnities in respect of, and be responsible for certain
costs, expenses, debts and liabilities of the Capital Trusts, as described
in the Registration Statement. All obligations under the applicable trust
agreement, including the indemnity obligation, are included in the back-up
undertakings.
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed.
Neither we nor the Capital Trusts may sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
SUBJECT TO COMPLETION, DATED JULY 17, 2001
PROSPECTUS
$350,000,000
Covanta Energy Corporation
Debt Securities, Preferred Stock, Common Stock,
Depositary Shares, Warrants, Stock Purchase Contracts and
Stock Purchase Units and Hybrid Securities
Combining Features of these Securities
-----------------------
Covanta Capital Trust I
Covanta Capital Trust II
Covanta Capital Trust III
Preferred Securities fully and unconditionally guaranteed
to the extent provided in this Prospectus
by Covanta Energy Corporation
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By this prospectus, we and the Capital Trusts may from time to time offer
securities to the public together or separately and in one or more series, in
amounts, at prices and on terms to be determined at the price of offering. We
will provide the specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any prospectus supplement
carefully before you invest.
Our common stock and Series A preferred stock are listed on the New York
Stock Exchange under the symbol "COV." Any common stock sold pursuant to an
accompanying prospectus supplement will be listed on such exchange, subject to
notice of issuance.
Investing in our securities involves certain risks. See "Risk Factors" on
page 6.
-----------------------
Neither the Securities and Exchange Commission, any state securities
commission, nor any other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
This prospectus may not be used to sell securities unless accompanied by a
prospectus supplement.
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THE DATE OF THIS PROSPECTUS IS -----------------------, 2001.
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. Neither we nor the
Capital Trusts have authorized anyone to provide you with different information.
Neither we nor the Capital Trusts are making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information provided in this prospectus or any prospectus supplement is accurate
as of any date other than the date on the front of those documents.
All references in this prospectus to "Covanta," "our company," "we," "us"
or "our" mean Covanta Energy Corporation and, unless the context otherwise
requires, its consolidated subsidiaries.
TABLE OF CONTENTS
Page
FORWARD-LOOKING STATEMENTS..................................................1
ABOUT THIS PROSPECTUS.......................................................2
WHERE YOU CAN FIND MORE INFORMATION.........................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................3
COVANTA ENERGY CORPORATION..................................................4
COVANTA CAPITAL TRUSTS......................................................4
RISK FACTORS................................................................6
USE OF PROCEEDS.............................................................6
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS............6
DESCRIPTION OF DEBT SECURITIES..............................................7
DESCRIPTION OF CAPITAL STOCK...............................................18
DESCRIPTION OF WARRANTS....................................................24
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS...........25
DESCRIPTION OF PREFERRED SECURITIES........................................26
DESCRIPTION OF GUARANTEES..................................................35
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING
SUBORDINATED DEBT SECURITIES AND THE GUARANTEE...........................37
PLAN OF DISTRIBUTION.......................................................40
LEGAL MATTERS..............................................................41
EXPERTS....................................................................41
i
FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus are forward-looking statements. These
statements involve known and unknown risks and relate to future events, our
future financial performance or our projected business results. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these terms or other
comparable terminology.
Although we believe that our expectations are reasonable, we can give no
assurance that these expectations will prove correct. Factors that could cause
our actual results to differ materially from those contemplated in the
forward-looking statements include, among others, the following:
o economic, capital market and other business conditions in the United
States and in foreign countries affecting power generation enterprises
specifically and commerce generally including interest, inflation and
exchange rates, weather conditions, creditworthiness of customers and
suppliers, changes in fuel costs and supply, unscheduled outages,
environmental incidents, electric transmission restraints and risks
and uncertainties associated with the recently deregulated energy
industry;
o trade, monetary, fiscal, taxation, energy regulation and environmental
policies of governments, agencies and similar organizations in
geographic areas where we have a financial interest;
o financial or regulatory accounting principles or policies imposed by
the Financial Accounting Standards Board, the Securities and Exchange
Commission, the Federal Energy Regulatory Commission and similar
entities with regulatory oversight, including, without limitation, the
impact of newly adopted FASB 133 relating to accounting for
derivatives which became effective as of January 1, 2001. The impact
of FASB 133 may vary between accounting periods based on changes in
pricing of various items bought and sold by us;
o the cost and other effects of legal and administrative proceedings,
settlements, investigations and claims;
o limitations on our ability to control the development or operation of
projects of which we own 50% or less;
o limitations on the ability of our management to project the future
operational results of development projects, which lack any
operational history;
o developments in the California power markets, including, but not
limited to, governmental intervention, deterioration in the financial
condition of counterparties, default in receivables due, adverse
results in current or future litigation and adverse changes in the
tariffs of the California Independent System Operator Corporation;
o performance of our projects undertaken and the success of efforts to
invest in and develop new opportunities; and
o other factors, including those that may be identified in a prospectus
supplement accompanying this prospectus and those discussed elsewhere
in this prospectus and in other information contained in our publicly
available SEC filings, including, but not limited to, factors
discussed in our Annual Report on Form 10-K for the year ended
December 31, 2000 and our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2001.
We do not undertake a duty to update any of the forward-looking statements after
the date of this prospectus.
1
ABOUT THIS PROSPECTUS
This document is called a prospectus and is part of a registration
statement that we and the Capital Trusts have filed with the Securities and
Exchange Commission using a "shelf" registration or continuous offering process.
Using this process, we and the Capital Trusts may, from time to time, offer any
combination of the securities described in this prospectus, either separately or
in units, in one or more offerings with a total initial offering price of up to
$350,000,000. This prospectus provides you with a general description of the
securities we and the Capital Trusts may offer. Each time we or the Capital
Trusts offer securities, we will provide a prospectus supplement to this
prospectus. The prospectus supplement will describe the specific terms of that
offering, and may also include a discussion of any risk factors or other special
considerations applicable to those securities. The prospectus supplement may
also add, update or change the information contained in this prospectus. If
there is any inconsistency between the information in this prospectus and any
prospectus supplement, you should rely on the information in the prospectus
supplement. Please carefully read this prospectus and the prospectus supplement,
in addition to the information contained in the documents we refer you to under
the headings "Where You Can Find More Information" and "Incorporation of Certain
Documents by Reference." The registration statement containing this prospectus,
including the exhibits to the registration statement, provides additional
information about us and the securities offered under this prospectus. The
registration statement, including the exhibits, can be read at the SEC website
or at the SEC offices mentioned under the heading "Where You Can Find More
Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
these materials at the Securities and Exchange Commission's public reference
room located at 450 Fifth Street, N.W., Washington, D.C. 20549.
You can also obtain copies of these materials at prescribed rates from the
Public Reference Room of the Securities and Exchange Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Rooms of the Securities and Exchange
Commission, including copying charges by calling (800) SEC-0330.
Our Securities and Exchange Commission filings are also available to the
public from the Securities and Exchange Commission's web site at
http://www.sec.gov.
You can also inspect our Securities and Exchange Commission filings at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005. For further information on obtaining copies of our Securities and
Exchange Commission filings at the New York Stock Exchange, you should call
(212) 656-5060.
This prospectus is part of a registration statement we and the Capital
Trusts have filed with the Securities and Exchange Commission relating to the
securities described in this prospectus. As permitted by Securities and Exchange
Commission rules, this prospectus does not contain all of the information set
forth in the registration statement. You should read the registration statement
for further information about us and the securities described in this
prospectus.
No separate financial statements of the Capital Trusts have been included
herein. We and the Capital Trusts do not consider such financial statements to
be material to holders of the Preferred Securities because (i) all of the voting
securities of the Capital Trusts will be owned, directly or indirectly, by us, a
reporting company under the Securities Exchange Act of 1934, (ii) each Capital
Trust is a newly-formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets our Corresponding Subordinated
Debt Securities (as defined herein) and issuing the Trust Securities (as defined
herein) and (iii) our obligations described herein and in any accompanying
prospectus supplement, through the applicable Guarantee (as defined herein), the
applicable Trust Agreement (as defined herein), the subordinated debt
securities, the subordinated indenture and any supplemental indentures thereto,
taken together, constitute a full, irrevocable and unconditional guarantee by us
of payments due on the Preferred Securities (as defined herein). No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of each Capital Trust's obligations under the Preferred
Securities. See "Covanta Capital Trusts," "Description of Preferred Securities,"
"Description of Debt Securities--Subordinated Debt Securities - Subordination"
and "Description of Guarantees."
2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" information into this prospectus that we file with them separately.
This means that we can disclose important information to you by referring you to
another document filed separately with the Securities and Exchange Commission.
The information incorporated by reference into this prospectus is considered to
be part of this prospectus, except for any information that is superseded by
information that is included directly in this prospectus or another document
that is incorporated by reference into this prospectus after the date of this
prospectus.
This prospectus incorporates by reference the documents listed below that
we have previously filed with the Securities and Exchange Commission and that
are not separately included in or delivered with this prospectus. They contain
important information about our company and its financial condition.
1. Our Annual Report on Form 10-K for the year ended December 31, 2000,
filed on April 2, 2001;
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001
filed on May 15, 2001;
3. Our Current Reports on Form 8-K dated May 16, 2001, May 17, 2001, June
14, 2001 and July 17, 2001;
4. Our Proxy Statement dated April 20, 2001, filed on April 20, 2001;
5. The description of our common stock contained in our registration
statement filed pursuant to Section 12 of the Securities Exchange Act
of 1934, and any amendments or reports filed for the purpose of
updating this description; and
6. The description of our preferred stock purchase rights contained in
Amendment No. 1 to Form 8-A filed pursuant to Section 12 of the
Securities Exchange Act of 1934.
We incorporate by reference additional documents that we may file with the
Securities and Exchange Commission after the date of this prospectus until the
time that we sell all the securities described in this prospectus. These
documents include periodic reports, such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (other than
filings under Item 9), as well as proxy statements.
You can obtain a copy of these filings, at no cost, by writing or calling
us at the following address or telephone number:
Covanta Energy Corporation
40 Lane Road
Fairfield, New Jersey 07004
Attention: Investor Relations
(973) 882-9000
3
COVANTA ENERGY CORPORATION
We are an international developer, owner and operator of power generation
facilities and provider of related infrastructure services. We own or operate 62
power generation facilities, 46 in the United States and 16 outside of the
United States. These facilities have a capacity of approximately 2,540 gross
megawatts (MW). Our power generation facilities use a variety of fuels,
including water (hydroelectric), natural gas, coal, geothermal fluid, municipal
solid waste, wood waste, landfill gas, heavy fuel oil and diesel fuel. Our
waste-to-energy facilities process 10 million tons of municipal solid waste per
year. We also offer single-source design, construction and operating
capabilities for water and wastewater treatment facilities. We operate nine
water supply and water treatment facilities that process the equivalent of
approximately 61 million gallons of wastewater per day (mgd).
We intend to continue to expand our portfolio by acquiring, developing,
constructing and operating power facilities in markets which meet our energy
demand, regulatory and governmental stability and investment return
requirements. We currently have under construction power generation facilities
with a total generating capacity of approximately 120 gross MW and a water
treatment facility with a total treatment capacity of 28 mgd. We also have
several pending acquisitions and an active development portfolio. We are also in
the process of expanding some of our existing facilities.
Effective March 13, 2001, we changed our name to Covanta Energy Corporation
from Ogden Corporation. Our new name symbolizes the "cooperation" and
"advantages" inherent in our partnership approach to our business.
We are incorporated in Delaware with executive offices located in
Fairfield, New Jersey.
COVANTA CAPITAL TRUSTS
Each Capital Trust is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by us, as sponsor of such Capital
Trust, and the Issuer Trustees (as defined herein) of such Capital Trust and
(ii) a certificate of trust filed with the Delaware Secretary of State. Each
trust agreement will be amended and restated in its entirety (each as so amended
and restated, a "Trust Agreement") substantially in the form filed as an exhibit
to the Registration Statement of which this Prospectus forms a part. Each Trust
Agreement will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Each Capital Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities (as defined
herein) representing undivided beneficial interests in the assets of such
Capital Trust, (ii) using the proceeds from the sale of such Trust Securities to
acquire a series of Corresponding Subordinated Debt Securities (as defined
herein), issued by us and (iii) engaging in only those other activities
necessary, convenient or incidental thereto. Accordingly, the Corresponding
Subordinated Debt Securities will be the sole revenue source of each Capital
Trust. Each of the Capital Trusts is a separate legal entity, and the assets of
one are not available to satisfy the obligations of any others.
Each Capital Trust may offer preferred securities (the "Preferred
Securities") representing undivided beneficial ownership interests in the assets
of such Capital Trust. We will be the owner of all of the common securities (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities") of each Capital Trust. The Common Securities of each Capital Trust
will rank pari passu, and payments will be made thereon pro rata, with the
Preferred Securities of such Capital Trust, except that upon the occurrence and
continuance of an event of default under the applicable Trust Agreement
resulting from an event of default with respect to the Corresponding
Subordinated Debt Securities, our rights as holder of the Common Securities to
payment in respect of distributions and payments upon liquidation, redemption or
otherwise will be subordinated to the rights of the holders of the Preferred
Securities of such Capital Trust. See "Description of Preferred
Securities--Subordination of Common Securities." We will acquire Common
Securities in an aggregate liquidation amount equal to not less than 3% of the
total capital of each Capital Trust.
The payment of periodic cash distributions with respect to the Preferred
Securities of each Capital Trust and payments on liquidation and on redemption
with respect to such Preferred Securities in each case out of funds held by such
Capital Trust will be guaranteed by us as and to the extent described herein
(each a "Guarantee"). See "Description of Guarantees." Our obligations under
each Guarantee are an unsecured obligation of ours and will rank subordinate and
junior in right of payment to all our indebtedness. Except as otherwise provided
4
in the applicable prospectus supplement, (i) concurrently with the issuance by a
Capital Trust of its Preferred Securities, such Capital Trust will invest the
proceeds thereof and any contributions made in respect of the Common Securities
in a corresponding series of our subordinated debt securities (the
"Corresponding Subordinated Debt Securities") with terms directly corresponding
to the terms of such Capital Trust's Preferred Securities, (ii) the
Corresponding Subordinated Debt Securities will be the sole assets of such
Capital Trust and (iii) payments under the Corresponding Subordinated Debt
Securities will be the only revenue of such Capital Trust. Unless otherwise
specified in an applicable prospectus supplement, we may redeem the
Corresponding Subordinated Debt Securities (and cause the redemption of Trust
Securities) or may dissolve such Capital Trust and, after satisfaction of
creditors of such Capital Trust as provided by applicable law, cause the
Corresponding Subordinated Debt Securities to be distributed to the holders of
Preferred Securities in liquidation of their interests in such Capital Trust.
See "Description of Preferred Securities--Liquidation Distribution Upon
Dissolution."
Unless otherwise specified in the applicable prospectus supplement, each
Capital Trust has a term of approximately 50 years but may dissolve earlier as
provided in the applicable Trust Agreement. Each Capital Trust's business and
affairs will be conducted by its trustees, each appointed by us as holder of the
Common Securities. Unless otherwise specified in the applicable prospectus
supplement, the trustees for each Capital Trust will be Bankers Trust Company,
as the Property Trustee (the "Property Trustee"), Wilmington Trust Company, as
the Delaware Trustee (the "Delaware Trustee"), and two individual trustees (the
"Administrative Trustees") who are our employees or officers (collectively, the
Property Trustee, Delaware Trustee, and Administrative Trustee are the "Issuer
Trustees"). The Property Trustee will act as sole indenture trustee under the
Trust Agreement for purposes of compliance with the Trust Indenture Act. Unless
otherwise specified in the applicable prospectus supplement, Bankers Trust
Company will act as trustee under each Guarantee and the subordinated indenture
until removed or replaced by the holder of the Common Securities of such Capital
Trust. See "Description of Guarantees" and "Description of the Debt
Securities--Subordinated Debt Securities." Unless an event of default under the
applicable Trust Agreement resulting from an event of default with respect to
Corresponding Subordinated Debt Securities for such Capital Trust has occurred
and is continuing, we, as the holder of the Common Securities of such Capital
Trust, may remove any of the Issuer Trustees. If such an event of default has
occurred, both us and the holders of a majority in liquidation amount of the
Preferred Securities will be entitled to appoint, remove or replace the Property
Trustee and/or the Delaware Trustee for such Capital Trust. In no event will the
holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees; such voting rights are vested exclusively
in us, as the holder of the Common Securities. The duties and obligations of
each Issuer Trustee are governed by the applicable Trust Agreement. See
"Description of Guarantees" and "Description of the Trust Preferred Securities."
The principal executive office of each Capital Trust is c/o Covanta Energy
Corporation, 40 Lane Road, Fairfield, New Jersey 07004 and its telephone number
is 973-882-9000.
5
RISK FACTORS
Investing in the securities described herein involves risk. In order to
better understand the risks involved in an investment in our securities, please
see the information set forth in our Annual Report on Form 10-K for the year
ended December 31, 2000, as amended, and our Quarterly Report on Form 10-Q for
the three months ended March 31, 2001, which are incorporated by reference in
this prospectus or any prospectus supplement, as well as the other documents
incorporated by reference herein and in the applicable prospectus supplement,
before making an investment decision. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also affect our
business operations.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, we will
use the net proceeds from the sale of the securities described in this
prospectus for general corporate purposes. General corporate purposes may
include repayments of our indebtedness and the indebtedness of our subsidiaries,
financing the development and construction of new facilities, additions to
working capital, financing of capital expenditures, funding acquisitions or for
any other purpose. We may invest funds not immediately required for such
purposes in short-term investment grade securities. The amount and timing of
sales of the securities described in this prospectus will depend on market
conditions and the availability to us of other funds. The use of proceeds may be
subject to restrictive covenants contained in our master credit facility with
our lenders, as the same may be amended, supplemented or replaced from time to
time. See our Annual Report on Form 10-K for the year ended December 31, 2000,
which is incorporated by reference herein.
Each Capital Trust will use all proceeds from the sale of the Trust
Securities to purchase the Corresponding Subordinated Debt Securities.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS
The following table sets forth the ratio of our earnings to our fixed
charges and the ratio of our earnings to combined fixed charges and preference
share dividends for the periods indicated:
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YEAR ENDED
DECEMBER 31
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges(a)......... (b) (b) 1.33 1.70 1.41
Ratio of Earnings to Combined Fixed Charges
and Preference Share Dividends (a)........ (b) (b) 1.33 1.69 1.41
- ---------------------------------------------------------------------------------------------------------------
(a) For purposes of computing the ratios, earnings consist of income from
continuing operations before income taxes and adjustment for minority
interests, plus fixed charges, amortization of capitalized interest and
distributed income of unconsolidated affiliates, less equity income in
unconsolidated affiliates, capitalized interest and minority interests in
pretax income of subsidiaries that have not incurred fixed charges. Fixed
charges consist of interest expense on indebtedness (including amortization
of deferred financing costs), capitalized interest and the portion of
operating lease rental expense that is representative of the interest
factor.
(b) For 2000 and 1999, the deficiency of earnings to fixed charges totaled
$131,386,000 and $39,984,000, respectively, and the deficiency of earnings
to combined fixed charge and preference share dividends totaled
$131,483,000 and $40,153,000, respectively. These deficiencies are due
mainly to losses from continuing operations incurred in 2000 and 1999 of
which pre-tax charges of $77,240,000 in 2000 relate to the write-down of
net assets held for sale.
The Capital Trusts had no operations during the periods set forth above.
6
DESCRIPTION OF DEBT SECURITIES
The following description of our debt securities sets forth certain general
terms and provisions of the debt securities to which any prospectus supplement
may relate. Our senior debt securities are to be issued under a senior indenture
between us and Bankers Trust Company (the "Trustee"), as trustee, the form of
which is filed as an exhibit to the registration statement of which this
prospectus forms a part. Our subordinated debt securities are to be issued under
a subordinated indenture between us and the Trustee, as trustee, the form of
which is filed as an exhibit to the registration statement of which this
prospectus forms a part. The senior indenture and the subordinated indenture are
sometimes referred to herein collectively as the "indentures" and each
individually as an "indenture." The particular terms of the debt securities
offered by any prospectus supplement, and the extent to which the general
provisions described below may apply to the offered debt securities, will be
described in the prospectus supplement.
Because the following summaries of the material terms and provisions of the
indentures and the related debt securities are not complete, you should refer to
the forms of the indentures and the debt securities for complete information
regarding the terms and provisions of the indentures and the debt securities.
The senior indenture and the subordinated indenture are substantially identical,
except for certain covenants of ours and provisions relating to subordination.
GENERAL
The indentures do not limit the aggregate principal amount of the debt
securities which we may issue thereunder and provide that we may issue the debt
securities thereunder from time to time in one or more series. The indentures do
not limit the amount of other unsecured or secured debt or the debt securities
which we or our subsidiaries may issue.
Unless otherwise provided in a prospectus supplement, our senior debt
securities will be unsecured obligations of ours and will rank equally with all
of our other unsecured and unsubordinated indebtedness. The subordinated debt
securities will be unsecured obligations of ours, subordinated in right of
payment to the prior payment in full of all Senior Indebtedness (which term
includes the senior debt securities) of ours as described below under "
Subordinated Debt Securities--Subordination" and in the applicable prospectus
supplement.
Because we are a holding company, our rights and the rights of our
creditors (including the holders of our debt securities) and shareholders to
participate in any distribution of assets of any of our subsidiaries upon that
subsidiary's liquidation or reorganization or otherwise would be subject to the
prior claims of that subsidiary's creditors, except to the extent that we may
ourselves be a creditor with recognized claims against that subsidiary. The
rights of our creditors (including the holders of our debt securities) to
participate in the distribution of stock owned by us in certain of our
subsidiaries, including our insurance subsidiaries, may also be subject to
approval by certain insurance regulatory authorities having jurisdiction over
such subsidiaries.
The prospectus supplement relating to the particular debt securities
offered thereby will describe the following terms of the offered debt
securities:
o the title of such debt securities and the series in which such debt
securities will be included, which may include medium-term notes;
o the aggregate principal amount of such debt securities and any limit
upon such principal amount;
o the issuing price of such debt securities;
o information about any discount and its calculation;
o the date or dates, or the method or methods, if any, by which such
date or dates will be determined, on which the principal of such debt
securities will be payable;
o the rate or rates at which such debt securities will bear interest, if
any, which rate may be zero in the case of certain debt securities
issued at an issue price representing a discount from the principal
amount payable at maturity, or the method by which such rate or rates
will be determined (including, if applicable, any remarketing option
7
or similar method), and the date or dates from which such interest, if
any, will accrue or the method by which such date or dates will be
determined;
o the date or dates on which interest, if any, on such debt securities
will be payable and any regular record dates applicable to the date or
dates on which interest will be so payable;
o the place or places where the principal of, or any premium or interest
on or any additional amounts with respect to such debt securities will
be payable, any of such debt securities that are issued in registered
form may be surrendered for registration of transfer or exchange, and
any such debt securities may be surrendered for conversion or
exchange;
o whether any of such debt securities are to be redeemable at our option
and, if so, the date or dates on which, the period or periods within
which, the price or prices at which and the other terms and conditions
upon which such debt securities may be redeemed, in whole or in part,
at our option;
o whether we will be obligated to redeem or purchase any of such debt
securities pursuant to any sinking fund or analogous provision or at
the option of any holder thereof and, if so, the date or dates on
which, the period or periods within which, the price or prices at
which and the other terms and conditions upon which such debt
securities will be redeemed or purchased, in whole or in part,
pursuant to such obligation, and any provisions for the remarketing of
such debt securities so redeemed or purchased;
o if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any debt securities to be issued
in registered form will be issuable and, if other than a denomination
of $5,000, the denominations in which any debt securities to be issued
in bearer form will be issuable;
o whether the debt securities will be convertible into common shares
and/or exchangeable for other securities, whether or not issued by us,
and, if so, the terms and conditions upon which such debt securities
will be so convertible or exchangeable;
o if other than the principal amount, the portion of the principal
amount (or the method by which such portion will be determined) of
such debt securities that will be payable upon declaration of
acceleration of the maturity thereof;
o if other than United States dollars, the currency of payment,
including composite currencies, of the principal of, any premium or
interest on or any additional amounts with respect to any of such debt
securities;
o whether the principal of, any premium or interest on or any additional
amounts with respect to such debt securities will be payable, at our
election or the election of a holder, in a currency other than that in
which such debt securities are stated to be payable and the date or
dates on which, the period or periods within which, and the other
terms and conditions upon which, such election may be made;
o any index, formula or other method used to determine the amount of
payments of principal of, any premium or interest on or any additional
amounts with respect to such debt securities;
o whether such debt securities are to be issued in the form of one or
more global securities and, if so, the identity of the depositary for
such global security or securities;
o whether such debt securities are the senior debt securities or
subordinated debt securities and, if the subordinated debt securities,
the specific subordination provisions applicable thereto;
o in the case of the subordinated debt securities, the relative degree,
if any, to which such subordinated debt securities of the series will
be senior to or be subordinated to other series of the subordinated
debt securities or other indebtedness of ours in right of payment,
whether such other series of the subordinated debt securities or other
indebtedness are outstanding or not;
o any deletions from, modifications of or additions to the Events of
Default or covenants of ours with respect to such debt securities;
8
o whether the provisions described below under " Defeasance" will be
applicable to such debt securities;
o whether any of such debt securities are to be issued upon the exercise
of warrants, and the time, manner and place for such debt securities
to be authenticated and delivered;
o whether any of the debt securities are to be issuable as registered
securities, bearer securities or both, whether debt securities are to
be issuable with or without coupons or both and, if issuable as bearer
securities, the date as of which the bearer securities will be dated
(if other than the date of original issuance of the first debt
security of that series of like tenor and term to be issued);
o whether, and under what conditions, we will pay any additional amounts
with respect to the debt securities;
o provisions for electronic issuance of debt securities or issuance of
debt securities in uncertificated form;
o whether any debt securities will have guarantees;
o the nature of any material relationship between the trustee and us or
any of our affiliates; the percentage of the series of debt securities
necessary to require the trustee to take action and what
indemnification the trustee may require before taking action; and
o any other terms of such debt securities and any other deletions from
or modifications or additions to the applicable indenture in respect
of such debt securities.
Unless otherwise provided in the related prospectus supplement, the debt
securities will be issued only in fully registered form in minimum denominations
of $1,000 and any integral multiple thereof. The debt securities may be
represented in whole or in part by one or more global debt securities registered
in the name of a depositary or its nominee, which will be denominated in an
amount equal to all or a portion of the aggregate principal amount of such debt
securities.
The debt securities may be issued as original issue discount securities
(bearing no interest or bearing interest at a rate which at the time of issuance
is below market rates) to be sold at a substantial discount below their
principal amount. Special United States federal income tax and other
considerations applicable to original issue discount securities will be
described in the related prospectus supplement.
Unless otherwise described in a prospectus supplement relating to any debt
securities, the indentures do not contain any provisions that would limit our
ability to incur indebtedness or that would afford holders of the debt
securities protection in the event of a sudden and significant decline in our
credit quality or a takeover, recapitalization or highly leveraged or similar
transaction involving us. Accordingly, we could in the future enter into
transactions that could increase the amount of indebtedness outstanding at that
time or otherwise affect our capital structure or credit rating. You should
refer to the prospectus supplement relating to a particular series of the debt
securities for information regarding to any deletions from, modifications of or
additions to the Events of Defaults described below or our covenants contained
in the indentures, including any addition of a covenant or other provisions
providing event risk or similar protection.
CONVERSION AND EXCHANGE
The terms, if any, on which debt securities of any series are convertible
into or exchangeable for common shares, preference shares or other securities,
whether or not issued by us, property or cash, or a combination of any of the
foregoing, will be set forth in the related prospectus supplement. Such terms
may include provisions for conversion or exchange, either mandatory, at the
option of the holder, or at our option, in which the securities, property or
cash to be received by the holders of the debt securities would be calculated
according to the factors and at such time as described in the related prospectus
supplement.
9
GLOBAL SECURITIES
We may issue all or some of the debt securities in book-entry form, which
means that global notes, not certificates, will represent the debt securities.
If we issue global notes representing any debt securities, then a depository
that we select will keep a record of the beneficial interests in the global
notes and record any transfers of beneficial interests.
We will describe any additional requirements as to the form and method of
exchange of debt securities in the prospectus supplement.
Modification of Indentures
Each indenture, our rights and obligations thereunder and the rights of the
holders of one or more series of debt securities issued under such indenture may
be modified without the consent of the holders as to matters which do not
materially adversely affect the interests of the holders and, as to other
matters, with the consent of the holders of not less than a majority of the
aggregate principal amount of debt securities at the time outstanding of all
series affected by the modification (voting as one class). Without the consent
of the holder of each debt security affected, however, no modification shall
change:
o the maturity date of any such debt security;
o reduce the principal amount or the amount of any premium payable
thereon;
o reduce the rate, extend the time of payment or change the method of
calculation of interest thereon;
o reduce any amount payable on redemption thereof; or
o reduce the percentage required for any such modification.
In addition, no modification of the senior indenture subordinating the
indebtedness evidenced by any series of senior debt securities issued thereunder
to any of our other indebtedness is effective against any holder of a senior
debt security issued thereunder without his consent, and no modification of the
subordinated indenture subordinating the indebtedness evidenced by any series of
subordinated debt securities issued thereunder to any of our indebtedness other
than senior indebtedness is effective against any holder of subordinated debt
securities without his consent. In the case of Corresponding Subordinated Debt
Securities, so long as any of the related Preferred Securities remain
outstanding, no modification of the applicable subordinated indenture may be
made that adversely affects the holders of such Preferred Securities in any
material respect, and no defeasance of the subordinated indenture may occur with
respect to such Corresponding Subordinated Debt Securities, and no waiver of any
event of default with respect to such Corresponding Subordinated Debt Securities
or waiver of compliance with any covenant under the subordinated indenture
applicable to such Corresponding Subordinated Debt Securities may be effective,
without the prior consent of not less than a majority of the aggregate
liquidation amount of such related Preferred Securities, and where consent under
the subordinated indenture is not effective against any holder without his
consent, no such consent shall be given by the Property Trustee without the
prior consent of each holder of related Preferred Securities. See "--Certain
Provisions Relating to the Corresponding Subordinated Debt Securities."
Events of Default
Each indenture provides that the following are events of default thereunder
with respect to any series of debt securities issued thereunder:
o default in the payment of the principal of, or premium, if any, on any
debt security of such series when and as the same shall be due and
payable;
o default in making a sinking fund payment, if any, when and as the same
shall be due and payable by the terms of any debt security of such
series;
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o default for 30 days in the payment of any installment of interest on
any debt security of such series and the time for payment has not been
extended or deferred;
o default for 60 days after written notice (given to us by the Trustee
or by the holders of at least 25% in aggregate principal amount of the
debt securities then outstanding of all series affected) in the
performance of any other covenant or agreement in respect of the debt
securities of such series contained in the relevant indenture; or
o certain events of bankruptcy, insolvency or reorganization, or any
related court appointment of a receiver, liquidator or trustee to us
or for any substantial part of our property.
An event of default with respect to the debt securities of any series does
not necessarily constitute an event of default with respect to any other series
of debt securities issued under such indenture.
The Trustee is required to give notice of any default known to it with
respect to a series of debt securities to the holders of debt securities of such
series within 90 days of the occurrence thereof (unless such default is cured),
provided that such Trustee may withhold notice to the holders of the debt
securities of such series of any default with respect to the debt securities of
such series (except a default in the payment of principal, premium, if any, or
interest) if it considers such withholding to be in the interest of such
holders.
In the case of an event of default relating to certain events of
bankruptcy, insolvency or reorganization, or any related court appointment of a
receiver, liquidator or trustee to us or for any substantial part of our
property, all outstanding debt securities and interest accrued thereon, if any,
shall immediately become due and payable without declaration, presentment,
demand or notice of any kind by the Trustee or any holder of a debt security. If
any other event of default with respect to the debt securities of such series
shall have occurred and be continuing, the Trustee or the holders of not less
than 25% in aggregate principal amount of the outstanding debt securities of
such series (or, in the case of certain events of default that affect all series
of debt securities then outstanding, the holders of not less than 25% in
aggregate principal amount of all the debt securities then outstanding treated
as one class) may declare the principal, or in the case of discounted debt
securities of such series, such portion thereof as may be described in the
applicable prospectus supplement, of all the debt securities of such series and
interest accrued thereon, if any, to be due and payable immediately. Subject to
certain conditions, any acceleration of the debt securities of any series may be
rescinded and annulled by the holders of not less than a majority in aggregate
principal amount of the outstanding debt securities of such series.
Within four months after the close of each year we must file with the
Trustee a certificate, signed by specified officers, stating whether or not such
officers have knowledge of any default relating to covenants, agreements and
obligations contained in the relevant indenture, and, if so, specifying each
such default and the nature thereof.
Subject to provisions relating to its duties during the continuance of any
event of default, the Trustee shall be under no obligation to exercise any of
its rights or powers under the relevant indenture at the request, order or
direction of any holders of debt securities, unless such holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for
indemnification and subject to the right of the Trustee to decline to follow any
holders' directions under specified circumstances, the holders of a majority in
aggregate principal amount of the outstanding debt securities of such series may
direct the time, method and place of conducting any proceeding or any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, with respect to the debt securities of such series.
Consolidation, Merger or Sale
The indenture provides that we will not consolidate with, merge with or
into any other corporation, whether or not we are the surviving corporation, or
sell, assign, transfer or lease all or substantially all of our properties and
assets as an entirety or substantially as an entirety to any person or group of
affiliated persons, in one transaction or a series of related transactions,
unless:
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o the successor corporation, if we are not the surviving corporation, is
a corporation organized under the laws of the United States or any
state thereof or the District of Columbia and expressly assumes in
writing all of our obligations under the outstanding debt securities
and the indenture;
o immediately before and after giving effect to the transaction or
series of transactions, no event of default, and no default, shall
have occurred and be continuing; and
o we deliver to the trustee an officer's certificate and an opinion of
counsel stating that the transaction and the supplemental indenture
comply with the indenture.
Transfer
Debt securities may be registered for transfer or exchanged at the
corporate trust office of the Trustee under the applicable indenture or at any
other office or agency maintained by us for such purposes, subject to the
limitations in the applicable Indenture, without the payment of any service
charge except for any tax or governmental charge incidental thereto. Provisions
with respect to the transfer and exchange of debt securities in global form will
be set forth in the applicable prospectus supplement.
We are not required to issue, exchange or register the transfer of any debt
securities during a period beginning at the opening of business 15 days before
the mailing of a notice of redemption and ending at the close of business on the
day of such mailing, or to exchange or register the transfer of the debt
securities selected, called or being called for redemption except, in the case
of debt securities to be redeemed in part, the portion thereof not to be
redeemed.
Defeasance
Except as otherwise provided with respect to the debt securities of any
series, the indenture provides that we shall be discharged from our obligations
under such Indenture with respect to any series of debt securities issued
thereunder at any time prior to the maturity date or redemption thereof when (a)
we have irrevocably deposited with the Trustee, in trust, (i) sufficient funds
to pay the principal of (and premium, if any), and interest to, maturity date
(or redemption) on, the debt securities of such series, or (ii) such amount of
direct obligations of, or obligations the principal of and interest on which are
fully guaranteed by, the United States Government, and which are not subject to
prepayment, redemption or call, as will, together with the predetermined and
certain income to accrue thereon without consideration of any reinvestment
thereof, be sufficient to pay when due the principal of (and premium, if any),
and interest to maturity date (or redemption) on, the debt securities of such
series, and (b) we have paid all other sums payable with respect to the debt
securities of such series. Upon such discharge, the holders of the debt
securities of such series shall no longer be entitled to the benefits of the
applicable indenture, except for the purposes of registration of transfer and
exchange of the debt securities of such series, and replacement of lost, stolen
or mutilated debt securities of such series.
Payment and Paying Agent
Unless otherwise indicated in the applicable prospectus supplement, payment
of the interest on a debt security on any interest payment date will be made to
the person in whose name such debt security (or one or more predecessor debt
securities) is registered at the close of business on the applicable record date
for the payment of such interest.
Principal of and any premium and interest on the debt securities of a
particular series will be payable at the office of such paying agent or paying
agents as we may designate with respect to the debt securities of such series
for such purpose from time to time. Unless otherwise indicated in the applicable
prospectus settlement, the corporate trust office of the Trustee in New York
City will be designated as our sole paying agent for payments with respect to
debt securities of each series. Any other paying agents initially designated by
us for the debt securities of a particular series will be named in the
applicable prospectus supplement. We will be required to maintain a paying agent
in each place of payment for the debt securities of a particular series.
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All moneys paid by us to a paying agent for the payment of their principal
of or any premium or interest on any debt security which remains unclaimed at
the end of two years after such principal, premium or interest has become due
and payable will be repaid to us, and the holder of such debt security
thereafter may look only to us for payment thereof.
Senior Debt Securities-Senior Indebtedness
The senior debt securities will rank pari passu with all of our outstanding
unsecured debt that is not subordinated by its terms and will constitute part of
the Senior Indebtedness for purposes of the subordinated indenture.
The term "Senior Indebtedness" is defined to mean all of our indebtedness,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are not superior
in right of payment to subordinated indebtedness or to our other indebtedness
which is pari passu with, or subordinated to, subordinated indebtedness.
The term "indebtedness" is defined to mean, with respect to a person:
o the principal of and premium, if any, and interest, if any, on, (A)
indebtedness of such person for money borrowed and (B) indebtedness
evidenced by securities, notes, debentures, bonds or other similar
instruments issued by such person;
o all capital lease obligations of such person;
o all obligations of such person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such
person and all obligations of such person under any conditional sale
or title retention agreement (but excluding trade accounts payable and
accrued liabilities in the ordinary course of business);
o all obligations, contingent or otherwise, of such person in respect of
any letters of credit, banker's acceptances, security purchase
facilities or similar credit transactions;
o all obligations in respect of interest rate swap, cap, floor, collar
or other agreements, interest rate future or option contracts,
currency swap agreements, currency or other future or option contracts
and other similar agreements; and
o all obligations of others of the type referred to above for the
payment of which such person is responsible or liable as obligor,
guarantor or otherwise.
The amount of Senior Indebtedness which we may issue is not subject to any
limitation. The senior indenture places no limitation on the amount of
indebtedness, including without limitation, secured debt, that we may incur. In
addition, the senior indenture places no limitation on the obligations that may
be incurred by our subsidiaries.
Subordinated Debt Securities-Subordination
The subordinated debt securities will constitute part of our subordinated
indebtedness and will be subordinate and subject in right of payment to the
prior payment in full of all of our Senior Indebtedness, whether outstanding at
the date of the subordinated indenture or incurred after such date.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to us or our property, (ii) any proceeding for our liquidation, dissolution or
other winding up, voluntary or involuntary, whether or not involving insolvency
or bankruptcy proceedings, (iii) any assignment by us for the benefit of
creditors or (iv) any other marshalling of our assets, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made on account of the
principal of and the premium, if any, or interest on the subordinated debt
securities. In such event, any payment or distribution on account of the
principal of or premium, if any, or interest on the subordinated debt
13
securities, whether in cash, securities or other property (other than our
securities or securities of 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
subordinated debt securities, to the payment of all Senior Indebtedness at the
time outstanding, and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the
subordinated debt securities shall be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) shall have been paid in
full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the holders of subordinated debt
securities, together with the holders of any of our obligations ranking on a
parity with the subordinated debt securities, shall be entitled to be paid from
our remaining assets the amounts at any time due and owing on account of unpaid
principal of and premium, if any, and interest on the 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 of our
capital stock or obligations ranking junior to the subordinated debt securities
and such other obligations. If any payment or distribution on account of the
principal of or interest on the subordinated debt securities of any character or
any security, whether in cash, securities or other property (other than our
securities or securities of 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
subordinated debt securities, to the payment of all Senior Indebtedness at the
time outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment) shall be received by any holder of any
subordinated debt securities in contravention of any of the terms hereof and
before all the Senior Indebtedness shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full. By reason of such subordination, in the event of our
insolvency, holders of Senior Indebtedness may receive more, ratably, and
holders of the subordinated debt securities having a claim pursuant to such
securities may receive less, ratably, than our other creditors. Such
subordination will not prevent the occurrence of any event of default in respect
of the subordinated debt securities.
If we were to become insolvent, your claim as a holder of Preferred
Securities, which represents in effect an interest in the Corresponding
Subordinated Debt Securities, or as a holder of debt securities as part of a
Stock Purchase Unit, will be effectively junior to the claims of holders of any
indebtedness or preferred stock of our subsidiaries.
The subordinated indenture places no limitation on the amount of additional
Senior Indebtedness that may be incurred by us or on obligations that may be
incurred by our subsidiaries. We expect from time to time to incur additional
indebtedness constituting Senior Indebtedness.
The subordinated indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular series of subordinated debt
securities, may be changed prior to the issuance of such series. Any such change
would be described in the applicable prospectus supplement.
INFORMATION CONCERNING THE TRUSTEE
We may from time to time borrow from, maintain deposit accounts with and
conduct other banking transactions with the Trustee and its affiliates in the
ordinary course of business.
Under each indenture, the Trustee is required to transmit annual reports to
all holders regarding its eligibility and qualifications as trustee under the
applicable indenture and related matters.
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CERTAIN PROVISIONS RELATING TO THE CORRESPONDING SUBORDINATED DEBT SECURITIES
General
The Corresponding Subordinated Debt Securities may be issued in one or more
series of subordinated debt securities under the subordinated indenture with
terms corresponding to the terms of a series of related Preferred Securities
issued by a Capital Trust. Concurrently with the issuance of a Capital Trust's
Preferred Securities, such Capital Trust will invest the proceeds thereof and
the consideration paid by us for the Common Securities in a series of
Corresponding Subordinated Debt Securities issued by us to such Capital Trust.
Each series of Corresponding Subordinated Debt Securities will be in the
principal amount equal to the aggregate stated Liquidation Amount of the related
Preferred Securities and the Common Securities of such Capital Trust and will
rank pari passu with all other series of subordinated debt securities. Holders
of the related Preferred Securities for a series of Corresponding Subordinated
Debt Securities will have the rights in connection with modifications to the
subordinated indenture or upon occurrence of an event of default under the Trust
Agreement relating to Corresponding Subordinated Debt Securities described under
"--Modification of Indentures," and "--Events of Default," and under "--Certain
Provisions Relating to the Corresponding Debt Securities--Enforcement of Certain
Rights by Holders of Preferred Securities" below, unless provided otherwise in
the prospectus supplement for such related Preferred Securities.
We will covenant, as to each series of Corresponding Subordinated Debt
Securities:
o to maintain directly or indirectly 100% ownership of the Common
Securities of the Capital Trust to which such Corresponding Debt
Securities have been issued, provided that certain successors which
are permitted pursuant to the subordinated indenture may succeed to
our ownership of the Common Securities;
o not to voluntarily dissolve, wind-up or liquidate any Capital Trust,
except (a) in connection with a distribution of Corresponding
Subordinated Debt Securities to the holders of the Preferred
Securities in liquidation of such Capital Trust or (b) in connection
with certain mergers, consolidations or amalgamations permitted by the
related Trust Agreement; and
o to use reasonable efforts, consistent with the terms and provisions of
the related Trust Agreement, to cause such Capital Trust to remain
classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes.
For additional covenants relating to payment of certain expenses of the
Capital Trust, see "Description of Preferred Securities--Payment of Expenses."
Option To Extend Interest Payment Date
If provided in the applicable prospectus supplement, we will have the right
at any time and from time to time during the term of any series of Corresponding
Subordinated Debt Securities to defer payment of interest for such number of
consecutive interest payment periods as may be specified in the applicable
prospectus supplement (each, an "Extension Period"), subject to the terms,
conditions and covenants, if any, specified in such prospectus supplement,
provided that such Extension Period may not extend beyond the maturity date of
such series of Corresponding Subordinated Debt Securities. Certain United States
federal income tax consequences and special considerations applicable to any
such Corresponding Subordinated Debt Securities will be described in the
applicable prospectus supplement.
Redemption
Unless otherwise indicated in the applicable prospectus supplement, we may,
at our option, redeem the Corresponding Subordinated Debt Securities of any
series in whole at any time or in part from time to time. Corresponding
Subordinated Debt Securities may be redeemed in the denominations as set forth
in the applicable prospectus supplement. Except as otherwise specified in the
applicable prospectus supplement, the redemption price for any Corresponding
Subordinated Debt Security so redeemed shall equal any accrued and unpaid
interest thereon to the redemption date, plus the principal amount thereof.
Unless otherwise specified in the applicable prospectus supplement, we may not
15
redeem a series of Corresponding Subordinated Debt Securities in part unless all
accrued and unpaid interest has been paid in full on all outstanding
Corresponding Subordinated Debt Securities of such series for all interest
periods terminating on or prior to the date fixed for redemption. Except as
otherwise specified in the applicable prospectus supplement, if a Subordinated
Debt Security Tax Event (as defined below) or an Investment Company Event (as
defined below) in respect of a Capital Trust shall occur and be continuing, we
may, at our option, redeem the Corresponding Subordinated Debt Securities held
by such Capital Trust at any time within 90 days of the occurrence of such
Subordinated Debt Security Tax Event or Investment Company Event, in whole but
not in part, subject to the provisions of the subordinated indenture. Unless
otherwise specified in the applicable prospectus supplement, the redemption
price for any such Corresponding Subordinated Debt Securities shall be equal to
100% of the principal amount of such Corresponding Subordinated Debt Securities
then outstanding plus accrued and unpaid interest to the date fixed for
redemption. For so long as the applicable Capital Trust is the holder of all
such outstanding Corresponding Subordinated Debt Securities, the proceeds of any
such redemption will be used by the Capital Trust to redeem the corresponding
Trust Securities in accordance with their terms.
"Subordinated Debt Security Tax Event" means the receipt by the applicable
Capital Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative written decision, pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or which proposed change, pronouncement,
action or decision is announced on or after the date of issuance of the
applicable series of Corresponding Subordinated Debt Securities, there is more
than an insubstantial risk that:
o the applicable Capital Trust is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with
respect to income received or accrued on the corresponding series of
Corresponding Subordinated Debt Securities;
o interest payable by us on such series of Corresponding Subordinated
Debt Securities is not, or within 90 days of the date of such opinion,
will not be, deductible by us, in whole or in part, for United States
federal income tax purposes; or
o the applicable Capital Trust is, or will be within 90 days of the date
of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the applicable Capital
Trust of an opinion of counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in the Investment
Company Act"), the applicable Capital Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which Change in
the Investment Company Act becomes effective on or after the date of original
issuance of the series of Preferred Securities issued by the Capital Trust.
Restrictions On Certain Payments
We will, unless otherwise provided in the applicable prospectus supplement,
covenant, as to each series of Corresponding Subordinated Debt Securities, that
we will not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of our
capital stock or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any of our debt securities (including
other Corresponding Subordinated Debt Securities) that rank pari passu with or
junior in interest to the Corresponding Subordinated Debt Securities or make any
guarantee payments with respect to any guarantee by us of the debt securities of
any of our subsidiaries if such guarantee ranks pari passu with or junior in
interest to the Corresponding Subordinated Debt Securities (other than (a)
dividends or distributions in our common stock, (b) redemptions or purchases of
any rights pursuant to our Rights Agreement (defined herein), or any successor
to such Rights Agreement, and the declaration of a dividend of such rights or
the issuance of stock under such plans in the future, (c) payments under any
Guarantee, and (d) purchases of common stock related to the issuance of common
stock under any of our benefit plans for directors, officers or employees) if at
such time (A) there shall have occurred any event of which we had actual
knowledge (1) that with the giving of notice or the lapse of time, or both,
16
would constitute an event of default under the subordinated indenture with
respect to the Corresponding Subordinated Debt Securities of such series and (2)
in respect of which we shall not have taken reasonable steps to cure, (B) if
such Corresponding Subordinated Debt Securities are held by a Capital Trust
which is the issuer of a series of related Preferred Securities, we shall be in
default with respect to its payment of any obligations under the Guarantee
relating to such Preferred Securities or (C) we shall have given notice of its
selection of an Extension Period as provided pursuant to the subordinated
indenture with respect to the Corresponding Subordinated Debt Securities of such
series and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing.
Enforcement Of Certain Rights By Holders Of Preferred Securities
If an event of default with respect to a series of Corresponding
Subordinated Debt Securities has occurred and is continuing and such event is
attributable to our failure to pay the principal of or the premium, if any, or
the interest, if any, on such series of Corresponding Subordinated Debt
Securities on the date such interest, premium or principal is otherwise payable,
a holder of related Preferred Securities may institute a legal proceeding
directly against us for enforcement of payment to such holder of the principal
of or premium, if any, or interest, if any, on such Corresponding Subordinated
Debt Securities having a principal amount equal to the aggregate Liquidation
Amount of the related Preferred Securities of such holder. The holder of at
least a majority in aggregate liquidation amount of Preferred Securities of the
Capital Trust must consent to any waiver of an event of default with respect to
the series of subordinated debt securities held by the Capital Trust and each
such holder must consent to any supplemental indenture that would adversely
affect the interests of such holders.
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DESCRIPTION OF CAPITAL STOCK
We may issue, from time to time, shares of one or more series or classes of
our common or preferred stock. The following summary description sets forth some
of the general terms and provisions of the stock. We will describe the specific
terms of any series of stock that we issue as part of this offering in an
applicable prospectus supplement. To the extent the description contained in the
prospectus supplement differs from this summary description, you should rely on
the information in the prospectus supplement. Because this is a summary
description, it does not contain all of the information that may be important to
you. For a more detailed description of the stock, you should refer to the
provisions of our certificate of incorporation, bylaws and the applicable
prospectus supplement before you purchase these securities.
GENERAL
Authorized, Issued and Outstanding Capital Stock. Our certificate of
incorporation authorizes 80,000,000 shares of common stock, par value $0.50 per
share, and 4,000,000 shares of preferred stock, par value $1.00 per share. Our
Board of Directors has authority to divide the preferred stock into one or more
series and has broad authority to fix and determine the relative rights and
preferences of the shares of each such series. The only issued and outstanding
series of authorized preferred stock is Series A preferred stock. As of April
9, 2001, there were 49,754,105 shares of common stock outstanding and
35,312 shares of preferred stock outstanding.
Fully Paid. The issued and outstanding shares of common stock and preferred
stock are, and any shares of common stock issued as securities and any shares of
common stock issuable upon the exercise of warrants for common stock or upon
conversion or exchange of debentures or preferred stock that are convertible
into or exchangeable for common stock will be, duly authorized, validly issued,
fully paid and non-assessable.
COMMON STOCK
Listing. Our common stock is listed on the New York Stock Exchange under
the trading symbol "COV."
Dividends. After the requirements in respect of dividends upon any issued
and outstanding series of preferred stock have been met to the end of the then
current quarterly dividend period for any such series of preferred stock, the
holders of common stock are entitled to receive, out of any of our remaining net
profits or net assets available for dividends, such dividends as may from time
to time be declared by our Board of Directors. Holders of common stock are
entitled to share ratably in any dividends so declared to the exclusion of the
holders of the shares of any series of preferred stock, except as otherwise
expressly provided in the Certificate, as in the case of the Series A preferred
stock which, as described below, is entitled to participate with the common
stock as to dividends.
Rights Upon Liquidation, Dissolution or Winding Up. In the event of any
liquidation, dissolution, or winding up of us (whether voluntary or
involuntary), after payment in full of any amounts payable upon any such
liquidation, dissolution or winding up, together with all dividends accrued or
in arrears in respect of any series of preferred stock, the holders of common
stock are entitled, to the exclusion of the holders of shares of any series of
preferred stock, to share ratably per share of common stock in all of our assets
then remaining. The Certificate does not allow us to purchase any shares of
common stock unless we have paid and set aside a sum sufficient to pay all past
and current dividends with respect to shares of Series A preferred stock then
issued and outstanding. We are not presently in arrears on the payment of
dividends with respect to the Series A preferred stock and are, therefore, not
currently restricted by this provision.
Voting Rights. The holders of common stock possess full voting power with
respect to the election of directors and all other purposes, except as limited
by the Delaware General Corporation Law and except as described below. Each
holder of common stock is entitled to one vote for each full share of common
stock then issued and outstanding and held in such record holder's name. Holders
of common stock vote together with the holders of Series A preferred stock and
would vote together with the holders of any other series of preferred stock
which may be issued and entitled to vote in such manner, and not as a separate
class. The Certificate does not provide for either preemptive rights or
cumulative voting with respect to common stock or preferred stock.
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Additional Rights. On September 20, 1990, our Board of Directors declared a
dividend distribution of one right (a "Right") for each outstanding share of
Common Stock, payable on October 2, 1990 to the stockholders of record as of the
close of business on such date. On September 28, 2000, our Board of Directors
amended and restated the Rights Agreement governing the Rights. Each of these
Rights, when exercisable, entitles the registered holder to purchase from us one
one-hundredth of a share of our cumulative participating preferred stock, par
value $1.00 per share, at a price of $80.00 per one one-hundredth of a share,
subject to certain adjustments. These Rights trade together with the Common
Stock and cannot be exercised or traded separately until the happening of
certain events. The Rights and the terms of the agreement which governs them are
described below under "--Certain Provisions--Share Purchase Rights."
Registrar and Transfer Agent. The registrar and transfer agent for the
Common Stock is the Bank of New York.
PREFERRED STOCK
Listing. Our Series A preferred stock is listed on the New York Stock
Exchange under the trading symbol "COV."
Our Board of Directors can, without approval of the stockholders, authorize
series of preferred stock and fix and determine the terms, limitations and
relative rights and preferences of any shares of preferred stock that it issues.
These terms, limitations, rights and preferences will be set forth in the
applicable prospectus supplement. If shares of preferred stock are convertible
into shares of common stock in accordance with the terms of such preferred
stock, the specific terms pertaining to any such conversion right will also be
set forth in the applicable prospectus supplement.
Option to Convert to Common Stock. Each share of Series A preferred stock
is currently convertible at the option of the holder thereof into 5.97626
fully paid and nonassessable shares of common stock, subject to adjustment in
certain events as specified in the Certificate.
Dividends. The minimum dividend rate payable with respect to the Series A
preferred stock is $1.875 per share per annum. The holders of Series A preferred
stock are also entitled to receive an additional amount per share equal to 150%
of the amount, if any, by which the dividend paid or any cash distribution made
on the common stock in the preceding quarter exceeded $0.0667 per share (subject
to certain adjustments as set forth in the Certificate). Dividends payable with
respect to Series A preferred stock are cumulative, such that unless we have
paid such dividends or have declared and set aside a sum sufficient for the
payment thereof in respect of all shares of Series A preferred stock then
outstanding, then no dividends (other than dividends payable in kind) may be
declared or paid in respect of shares of common stock.
Rights Upon Liquidation, Dissolution or Winding Up. In the event of our
liquidation, dissolution or winding up (whether voluntary or involuntary), the
holders of preferred stock are entitled to receive out of our assets available
for distribution such amounts as are specified for each particular series,
together with all dividends accrued or in arrears thereon, before the holders of
common stock are entitled to any distributions out of the remaining assets. In
the event of a voluntary liquidation, dissolution or winding up, the holders of
Series A preferred stock are entitled to receive $50.00 per share together with
all dividends accrued or in arrears thereon. In the event of any involuntary
liquidation, dissolution or winding up, the holders of Series A preferred stock
are entitled to receive $20.15 per share together with all dividends accrued or
in arrears thereon.
Redemption by Covanta. We may redeem the outstanding shares of Series A
preferred stock at any time at a redemption price of $50.00 per share plus all
dividends accrued or in arrears thereon.
Voting Rights. The holders of Series A preferred stock are entitled to
one-half vote for each share of Series A preferred stock and except as described
below, vote together as a class with the holders of common stock. However, if at
any time dividends with respect to the Series A preferred stock have not been
paid in an amount equal to or exceeding the dividends payable in respect of six
quarterly periods, then the holders of Series A preferred stock, voting as a
separate class with each share of Series A preferred stock having one vote, are
19
entitled to elect two additional directors to the Board of Directors at the next
annual meeting of stockholders in lieu of voting together with the holders of
common stock in the election of directors, with such right continuing until all
dividends in default have been paid. In addition, the separate consent or
approval of at least two-thirds of the number of shares of any series of
preferred stock then outstanding is required before we can undertake certain
transactions, as specified in the Certificate, that may have the effect of
adversely affecting the rights of such series.
Additional Class. As described below under "--Certain Provisions-Share
Purchase Rights," an additional class of preferred stock has been authorized as
of the date hereof, no shares of such class having been issued or outstanding.
DESCRIPTION OF DEPOSITARY SHARES
We may, at our option, elect to offer fractional shares of preferred stock,
or "depositary shares", rather than full shares of preferred stock. In the
event, we will issue receipts for depositary shares, and each receipt will
represent a fraction of a share of a particular series of preferred stock as
described in the applicable prospectus supplement.
The shares of any series of preferred stock represented by depositary
shares will be deposited under a deposit agreement between us and the depositary
named in the applicable prospectus supplement. Subject to terms of the deposit
agreement, each owner of a depositary share will be entitled, in proportion, to
all rights and preferences of the preferred stock, including dividend, voting,
redemption, subscription and liquidation rights. The term of any depositary
shares will be described in the applicable prospectus supplement and the
provisions of the deposit agreement, which will be filed with the SEC.
CERTAIN PROVISIONS
The provisions of our certificate of incorporation and by-laws and the
other arrangements summarized below may be deemed to have an anti-takeover
effect and may delay, defer or prevent a tender offer or takeover attempt that a
stockholder might consider in such stockholder's best interest, including those
attempts that might result in a premium over the market price for the shares
held by stockholders.
The description of the Rights Agreement in "--Share Purchase Rights" is
qualified in its entirety by reference to our Registration Statement on Form 8-A
dated September 28, 1990, incorporated by reference in this prospectus.
Board of Directors. The Board of Directors is divided into three classes
that are elected for staggered three year terms. This means that only one-third
of our directors are elected each year.
Issuance of Preferred Stock. The power of the Board of Directors to
establish one or more series of preferred stock with those rights, preferences,
privileges and limitations as the Board of Directors fixes, could have the
effect of impeding or discouraging the acquisition of control of us.
Business Combinations. Our Certificate contains supermajority voting
provisions relating to the approval of business combinations with certain
stockholders. The required "supermajority vote" consists of the affirmative vote
of the holders of 80% or more of our voting stock voting together as single
class, and at least a majority of the shares of voting stock not held by the
affiliate or associate (as defined in Rule 12b-2 of the Securities Exchange Act
of 1934) of us which was the beneficial owner of 10% or more of our voting stock
at any time in the two years prior to the date in question, voting together as a
single class. Pursuant to the Certificate, any merger, sale of all or
substantially all of our assets, adoption of a plan of liquidation or other
similar extraordinary corporate transaction with any person who is the
beneficial owner of 10% or more of our voting stock, except for us, our
subsidiaries or certain employee benefits plans and their trustees, must be
approved by a supermajority vote, unless the extraordinary corporate transaction
has been approved by the vote of a majority of the continuing directors of our
Board of Directors.
20
Also pursuant to the Certificate, any similar extraordinary corporate
transaction with any person who is an affiliate or associate of us and who was
the beneficial owner of 10% or more of our voting stock at any time in the two
years prior to the date in question must be approved by a supermajority vote,
unless the extraordinary corporate transaction has been approved by the vote of
a majority of the continuing directors of our Board of Directors.
Our "voting stock" is all our capital stock which by its terms may vote on
all matters submitted to our stockholders generally.
A "continuing director of Covanta" means any member of our Board of
Directors, who, while serving as a member of the Board of Directors is not an
affiliate, associate or representative of any affiliate or associate of us which
was the beneficial owner of 10% or more of our voting stock at any time in the
two years prior to the date in question and whose term as a member of the Board
of Directors satisfies certain duration requirements. A "continuing director"
may also be certain successors to such Board of Directors members.
Amendments to the Certificate of Incorporation. The Certificate provides
that the following provisions, including the provision that so provides, cannot
be repealed or amended in any respect, nor may any provision be adopted that is
inconsistent with the following provisions, without a supermajority vote of
stockholders:
o the prohibition on cumulative voting for directors;
o the minimum and maximum number of directors and the requirement of a
classified board;
o the requirement that holders of our common stock are entitled to one
vote per share; and
o the provision requiring an 80% supermajority vote and imposing certain
related requirements with respect to extraordinary corporate
transactions.
The above supermajority voting requirements do not apply to any amendment,
repeal or adoption recommended by our Board of Directors if a majority of our
Board of Directors then in office consists of persons who would be eligible to
serve as continuing directors.
Provisions Relating to Meetings of Stockholders.
o Notice Requirement. Our stockholders can submit proposals for action
by the stockholders at an annual meeting, if the stockholders follow
advance notice procedures described in our By-Laws. These procedures
include delivering a timely written notice to our Secretary. To be
timely, a stockholder's notice must be received at our principal
executive offices, not less than 50 days nor more than 75 days prior
to the date of the annual meeting (unless less than 65 days' notice or
prior public disclosure of the date of such meeting has been given or
made to the stockholders, in which case a stockholder's notice must be
received no later than the close of business on the 15th day following
the day on which such notice was mailed or such disclosure was made).
o No Action by Consent Without a Meeting. The Certificate stipulates
that no action can be taken except at an annual or special meeting.
o Special Meetings. The Bylaws only allow special meetings of the
stockholders if requested by the Chairman or Vice-Chairman of the
Board of Directors or by a majority of the Board of Directors.
Share Purchase Rights.
o General. On September 20, 1990, our Board of Directors declared a
dividend distribution of one Right for each outstanding share of
common stock, payable on October 2, 1990 to the stockholders of record
as of the close of business on such date. On September 28, 2000, our
Board amended and restated the Rights Agreement governing the Rights.
Each Right, when exercisable, entitles the registered holder to
purchase from us one one-hundredth of a share of our cumulative
participating preferred stock, par value $1.00 per share (the "Junior
Preferred Stock") at a price of $80 per one one-hundredth of a share,
subject to certain adjustments. The Rights are governed by an Amended
21
and Restated Rights Agreement, pursuant to which the Rights will
expire on October 2, 2010, unless earlier redeemed by us as described
below.
o Exercise of the Rights. The Rights trade together with the common
stock. They cannot be exercised or traded separately until the close
of business on the "distribution date." The distribution date occurs
ten days after a person or group of affiliated or associated persons
has acquired, obtained the right to acquire or commenced a tender or
exchange offer, or filed a registration statement under the Securities
Act with respect to a contemplated exchange offer, to acquire
beneficial ownership of 15% or more of the outstanding shares of
common stock (each, an "Acquiring Person"). As soon as practicable
following the distribution date, separate certificates evidencing the
Rights will be mailed to holders of record of common stock as of the
close of business on the distribution date, and such separate
certificates alone will evidence the Rights. The purchase price
payable, and the number of shares of common stock or other securities
or property issuable, upon exercise of the Rights are subject to
adjustment from time to time under certain circumstances to prevent
dilution.
In the event that any person becomes an Acquiring Person, each holder
of a Right, other than the Acquiring Person and certain of its
transferees, will thereafter have the right to receive, upon exercise
of a Right, that number of shares of our common stock having a market
value of two times the exercise price of the Right. In the event that,
at any time after the Rights become exercisable, we are acquired in a
merger or other business combination, each holder of a Right, other
than the Acquiring Person and certain of its transferees, shall
thereafter have the right to receive, upon the exercise thereof at the
then current exercise price of the Right, that number of shares of
common stock of the surviving company (or its parent company or other
controlling entity) which at the time of such transaction would have a
market value of two times the exercise price of the Right.
At any time after the Rights become exercisable and prior to the time
that any person or group becomes the beneficial owner of 50% or more
of the outstanding common stock, the Board of Directors may exchange
the Rights, other than Rights held by any Acquiring Person or its
transferees, for common stock at a ratio of one share of common stock
per Right, subject to certain adjustments.
At any time prior to the close of business on the date that Rights
holders become entitled to purchase common stock (or common stock of
the surviving entity after a merge with us) we may redeem the Rights
in whole, at a price of $.01 per Right, subject to certain adjustments
(the "Redemption Price"). Immediately upon the action of the Board of
Directors redeeming the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of us, including no right to vote or to
receive dividends.
At any time prior to the time that an Acquiring Person has become
such, we may amend the Amended and Restated Rights Agreement and the
terms of the Rights in any manner we deem necessary or desirable.
Thereafter, the Amended and Restated Rights Agreement and the terms of
the Rights may be amended by us under certain circumstances but not in
any manner that adversely affects the interests of the holders of the
Rights (other than an Acquiring Person).
o Terms of the Junior Preferred Stock. The junior preferred stock
purchasable upon exercise of the Rights will not be redeemable. Each
share of junior preferred stock will be entitled to a minimum
preferential quarterly dividend payable of $1.00 but will be entitled
to an aggregate dividend of 100 times the dividend declared per share
of common stock. In the event of liquidation, the holders of the
junior preferred stock will be entitled to a minimum preferential
liquidation payment of $40 per share but will be entitled to an
aggregate payment of 100 times the payment made per share of common
stock. Each share of junior preferred stock will have 100 votes,
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voting together with the common stock. In the event of any merger,
consolidation or other transaction in which shares of common stock are
exchanged, each share of junior preferred stock will be entitled to
receive 100 times the amount received per share of common stock. These
rights are protected by customary anti-dilution provisions. Because of
the nature of the junior preferred stock's dividend and liquidation
rights, the value of the one one-hundredth interest in a share of
junior preferred stock purchasable upon exercise of each Right should
approximate the value of one share of common stock.
23
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, preferred stock
or common stock. Warrants may be issued independently or together with our debt
securities, preferred stock or common stock and may be attached to or separate
from any offered securities. Each series of warrants will be issued under a
separate warrant agreement to be entered into between us and a bank or trust
company, as warrant agent. The warrant agent will act solely as our agent in
connection with the warrants and will not have any obligation or relationship of
agency or trust for or with any holders or beneficial owners of warrants. A copy
of the warrant agreement will be filed with the Securities and Exchange
Commission in connection with the offering of warrants.
GENERAL TERMS OF ALL WARRANTS
The prospectus supplement relating to a particular issue of warrants to
issue debt securities, common stock or preferred stock will describe the terms
of those warrants, including the following:
o the title of the warrants;
o the offering price for the warrants, if any;
o the aggregate number of the warrants;
o the dates on which the right to exercise the warrants will commence
and expire;
o if applicable, the minimum or maximum amount of the warrants that may
be exercised at any one time;
o the currency or currency units in which the offering price, if any,
and the exercise price are payable;
o if applicable, a discussion of material United States federal income
tax considerations;
o anti-dilution provisions of the warrants, if any;
o redemption or call provisions, if any, applicable to the warrants;
o any additional terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants; and
o any other information we think is important about the warrants.
ADDITIONAL TERMS OF DEBT WARRANTS
The prospectus supplement relating to a particular issue of warrants to
issue debt securities will describe the following additional terms:
o the designation and terms of the debt securities purchasable upon
exercise of the warrants;
o if applicable, the designation and terms of the debt securities with
which the warrants are issued with and the number of warrants issued
with each debt security;
o if applicable, the date from and after which the warrants and any debt
securities issued with them will be separately transferable;
o the principal amount of debt securities that may be purchased upon
exercise of a warrant and the price at which the debt securities may
be purchased upon exercise;
o whether the warrants represented by the warrant certificates or debt
securities that may be issued upon exercise of the warrants will be
issued in registered or bearer form; and
o information relating to book-entry procedures, if any.
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ADDITIONAL TERMS OF STOCK WARRANTS
The prospectus supplement relating to a particular issue of warrants to
issue common stock or preferred stock will describe the following additional
terms:
o the designation and terms of the common stock or preferred stock that
may be purchased upon exercise of the warrants;
o if applicable, the designation and terms of the securities with which
the warrants are issued with and the number of warrants issued with
each security;
o if applicable, the date from and after which the warrants and any
securities issued with the warrants will be separately transferable;
and
o the number of shares of common stock or preferred stock that may be
purchased upon exercise of a warrant and the price at which the shares
may be purchased upon exercise.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
We may issue contracts obligating holders to purchase from us, and
obligating us to sell to the holders, a specified number of shares of common
stock or preferred stock at a future date or dates. These contracts are called
"stock purchase contracts." The price per share of common stock or preferred
stock and the number of shares of common stock or preferred stock may be fixed
at the time the stock purchase contracts are issued or may be determined by
reference to a specific formula set forth in the stock purchase contracts. The
stock purchase contracts may be issued separately or as part of units consisting
of a stock purchase contract and debt securities, trust preferred securities,
preferred stock or debt obligations of third parties, including U.S. treasury
securities, securing the holders' obligations to purchase the common stock or
preferred stock under the stock purchase contracts, which we refer to herein as
"stock purchase units." The stock purchase contracts may require us to make
periodic payments to the holders of the stock purchase units or vice versa, and
such payments may be unsecured or refunded on some basis. The stock purchase
contracts may require holders to secure their obligations thereunder in a
specified manner.
The applicable prospectus supplement will describe the terms of the stock
purchase contracts or stock purchase units. The description in the prospectus
supplement will not necessarily be complete, and reference will be made to the
stock purchase contracts, and, if applicable, collateral or depositary
arrangements, relating to the stock purchase contracts or stock purchase units.
Material United States federal income tax considerations applicable to the stock
purchase units and the stock purchase contracts will also be discussed in the
applicable prospectus supplement.
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DESCRIPTION OF PREFERRED SECURITIES
The following description sets forth certain general terms and provisions
of the Preferred Securities to which any prospectus supplement may relate. The
particular terms of the Preferred Securities offered by any prospectus
supplement and the extent, if any, to which such general provisions may apply to
the Preferred Securities so offered will be described in the prospectus
supplement relating to such Preferred Securities. The prospectus supplement will
also set forth with respect to the particular Preferred Securities offered, the
specific designation;
o the number of securities;
o the liquidation amount per security;
o any listing on a securities exchange;
o the distribution rate (or method of calculation thereof);
o the dates on which distributions shall be payable and dates from which
distributions shall accrue;
o voting rights, if any;
o terms for any conversion or exchange into other securities;
o any redemption or sinking fund provisions;
o any other rights, preferences, privileges, limitations or restrictions
relating to the Preferred Securities; and
o the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of our
Corresponding Subordinated Debt Securities.
Pursuant to the terms of the Trust Agreement for each Capital Trust, the
Administrative Trustees, on behalf of such Capital Trust, are authorized to
issue the Preferred Securities and the Common Securities. The Preferred
Securities of a particular issue will represent preferred beneficial ownership
interests in the assets of each Capital Trust, and the holders thereof will be
entitled to a preference in certain circumstances with respect to distributions
and amounts payable on redemption or liquidation over the Common Securities of
such Capital Trust, as well as other benefits as described in the corresponding
Trust Agreement. This summary of certain provisions of the Preferred Securities
and the Trust Agreement, which together with the applicable prospectus
supplement will describe the material terms thereof, does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the applicable Trust Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act to each of which reference
is hereby made. Wherever particular defined terms of a Trust Agreement (as
amended or supplemented from time to time) are referred to herein or in a
prospectus supplement, such defined terms are incorporated herein or therein by
reference. The form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this prospectus forms a part. Each Capital Trust
is a legally separate entity and the assets of one are not available to satisfy
the obligations of any of the others.
GENERAL
The Preferred Securities of a Capital Trust will rank pari passu, and
payments will be made thereon pro rata, with the Common Securities of such
Capital Trust except as described under "--Subordination of Common Securities."
Legal title to the Corresponding Subordinated Debt Securities will be held in
the name of such Capital Trust in trust for the benefit of the holders of the
related Preferred Securities and Common Securities. The Guarantee Agreement
executed by us for the benefit of the holders of a Capital Trust's Preferred
Securities will be a guarantee on a subordinated basis with respect to the
related Preferred Securities but will not guarantee payment of distributions or
amounts payable on redemption or liquidation of such Preferred Securities when
the related Capital Trust does not have funds on hand available to make such
payments. See "Description of Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative and will
accumulate whether or not there are funds of the applicable Capital Trust for
the payment of distributions. Distributions will accrue from and will be payable
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on such dates as are specified in the applicable prospectus supplement. Except
as specified in the applicable prospectus supplement, in the event that any date
on which distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect to any such delay), except that, if such next
succeeding Business Day is in the next succeeding calendar year, payment of such
distribution shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date (each date on which
distributions are payable in accordance with the foregoing, a "Distribution
Date"). Except as specified in the applicable prospectus supplement, a "Business
Day" shall mean any day other than a Saturday or a Sunday, or a day on which
banking institutions in New York City are authorized or required by law to
remain closed or a day on which the corporate trust office of the Property
Trustee or the Trustee under the subordinated indenture is closed for business.
Distributions on each Preferred Security will be payable at a rate
specified in the prospectus supplement for such Preferred Securities. The amount
of distributions payable will be computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in a period
unless otherwise specified in the applicable prospectus supplement.
Distributions to which holders of Preferred Securities are entitled will
accumulate additional distributions at the rate per annum if and as specified in
the applicable prospectus supplement. The term "distributions" as used herein
includes any such additional distributions unless otherwise stated.
If provided in the applicable prospectus supplement, we will have the right
at any time and from time to time during the term of any series of Corresponding
Subordinated Debt Securities to defer payment of interest for such number of
consecutive interest payment periods as may be specified in the applicable
prospectus supplement (each, an "Extension Period"), subject to the terms,
conditions and covenants, if any, specified in such prospectus supplement,
provided that such Extension Period may not extend beyond the maturity date of
such series of Corresponding Subordinated Debt Securities. Certain United States
federal income tax consequences and special considerations applicable to any
such Corresponding Subordinated Debt Securities will be described in the
applicable prospectus supplement. As a consequence of any such extension, during
any such Extension Period, distributions on the corresponding Preferred
Securities would also be deferred by the applicable Capital Trust. During any
such Extension Period, quarterly distributions will continue to accumulate,
compounded on a quarterly basis, to the extent permitted by applicable law.
If we give notice of its election of an Extension Period with respect to
the Corresponding Subordinated Debt Securities of a series and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing, we may not make certain payments. See "Description of the Debt
Securities--Certain Provisions Relating to Corresponding Subordinated Debt
Securities--Restrictions on Certain Payments" for a summary of such restrictions
and the additional circumstances in which we are restricted from making such
payments.
The revenue of each Capital Trust available for distribution to holders of
its Preferred Securities will be limited to payments under the Corresponding
Subordinated Debt Securities in which the Capital Trust will invest the proceeds
from the issuance and sale of its Trust Securities. If we do not make interest
payments on such Corresponding Subordinated Debt Securities, the Property
Trustee will not have funds available to pay distributions on the related
Preferred Securities. The payment of distributions (if and to the extent the
Capital Trust has funds legally available for the payment of such distributions
and cash sufficient to make such payments) is guaranteed by us on a limited
basis as set forth herein under "Description of Guarantees."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Capital Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
form, will be one Business Day prior to the relevant Distribution Date. In the
event any Preferred Securities are not in book-entry form, the relevant record
date for such Preferred Securities shall be the date 15 days prior to the
relevant Distribution Date.
PAYMENT OF EXPENSES
Pursuant to the subordinated indenture, we, as the borrower, have agreed to
pay all debts and obligations (other than with respect to the Trust Securities)
and all costs and expenses of the applicable Capital Trust (including, but not
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limited to, all costs and expenses relating to the organization of the
applicable Capital Trust, the fees and expenses of the Property Trustee, the
Delaware Trustee and the Administrative Trustees and all costs and expenses
relating to the operation of the applicable Capital Trust (other than with
respect to the Trust Securities)). We have also agreed to pay any and all taxes,
duties, assessments or other governmental charges of whatever nature (other than
United States withholding taxes) imposed by the United States or any other
taxing authority, so that the net amounts received and retained by the
applicable Capital Trust after paying such fees, expenses, debts and obligations
will be equal to the amounts the applicable Capital Trust would have received
and retained had no such fees, expenses, debts and obligations been incurred by
or imposed on the applicable Capital Trust. Our foregoing obligations are for
the benefit of, and shall be enforceable by, any person to whom such fees,
expenses, debts and obligations are owed, whether or not such creditor has
received notice thereof. Any such creditor may enforce our obligations directly
against us, and we have agreed to irrevocably waive any right or remedy to
require that any such creditor take any action against the applicable Capital
Trust or any other person before proceeding against us. We shall execute such
additional agreements as may be necessary to give full effect to the foregoing.
REDEMPTION OR EXCHANGE
Upon the repayment or redemption, in whole or in part, of any Corresponding
Subordinated Debt Securities, whether at maturity or upon earlier redemption,
the proceeds from such repayment or redemption shall be applied by the Property
Trustee to redeem a Like Amount (as defined below) of the Trust Securities, upon
not less than 30 nor more than 60 days notice, at a redemption price (the
"Redemption Price") equal to the aggregate Liquidation Amount of such Trust
Securities plus accumulated but unpaid distributions thereon to the date fixed
for redemption (the "Redemption Date") and the related amount of the premium, if
any, paid by us upon the concurrent redemption of such Corresponding
Subordinated Debt Securities. If fewer than all of any series of Corresponding
Subordinated Debt Securities are to be repaid or redeemed on a Redemption Date,
then the proceeds from such repayment or redemption shall be allocated to the
redemption pro rata (based on Liquidation Amounts) of the related Common
Securities and Preferred Securities. The particular Preferred Securities to be
redeemed shall be selected by the Property Trustee from outstanding Preferred
Securities not previously called for redemption, by such means as the Property
Trustee shall deem fair and appropriate.
We will have the right to redeem any series of Corresponding Subordinated
Debt Securities on such terms as may be specified in the applicable prospectus
supplement.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount (as
defined below) equal to the principal amount of Corresponding Subordinated Debt
Securities to be contemporaneously redeemed in accordance with the subordinated
indenture, allocated to the Common Securities and the Preferred Securities based
upon the relative Liquidation Amounts of such classes and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities, and (ii) with
respect to a distribution of Corresponding Subordinated Debt Securities to
holders of any series of Trust Securities in connection with a dissolution or
liquidation of the related Capital Trust, Corresponding Subordinated Debt
Securities having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Corresponding Subordinated Debt
Securities are distributed. "Liquidation Amount" means the stated amount per
Trust Security specified in the applicable prospectus supplement.
REDEMPTION AND EXCHANGE PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Subordinated Debt Securities. Redemptions of the
Preferred Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the related Capital Trust has funds
on hand available for the payment of such Redemption Price. See "--Subordination
of Common Securities."
If a Capital Trust gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, the Property Trustee will deposit irrevocably
with the Deposit Trust Company ("DTC") funds sufficient to pay the applicable
Redemption Price and will give DTC irrevocable instructions and authority to pay
the Redemption Price to the holders of such Preferred Securities. If such
Preferred Securities are no longer in book-entry form, the Property Trustee, to
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the extent funds are available, will irrevocably deposit with the paying agent
for such Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates.
If notice of redemption shall have been given and funds deposited as
required, then immediately prior to the close of business (New York City time)
on the date of such deposit, all rights of the holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price and any unpaid
distribution payable on or prior to the Redemption Date, in each case without
interest, and such Preferred Securities will cease to be outstanding. Except as
specified in the applicable prospectus supplement, in the event that any
Redemption Date is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day except that, if such succeeding Business Day falls in the next calendar
year, such payment will be paid on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of Preferred Securities called
for redemption is improperly withheld or refused and not paid either by the
Capital Trust or by us pursuant to the Guarantee as described under "Description
of Guarantees," distributions on such Preferred Securities will continue to
accrue at the then applicable rate, from the Redemption Date originally
established by the Capital Trust for such Preferred Securities to the date such
Redemption Price is actually deposited with DTC or the paying agent, as
applicable, in which case such date will be the date fixed for redemption for
purposes of calculating the Redemption Price; provided that if the Redemption
Price is not deposited by 12:00 noon on such date, the next succeeding Business
Day shall be the date fixed for redemption for purposes of calculating the
Redemption Price. Subject to applicable law (including, without limitation,
United States federal securities law), we or our subsidiaries may at any time
and from time to time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Subordinated Debt Securities to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be a date at least 15 days prior to the
Redemption Date or liquidation date, as applicable, as specified in the
applicable prospectus supplement.
If fewer than all of the Preferred Securities and Common Securities issued
by a Capital Trust are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected not more than
60 days prior to the Redemption Date by the Property Trustee from the
outstanding Preferred Securities not previously called for redemption, by such
method as the Property Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the Liquidation
Amount or an integral multiple of the Liquidation Amount in excess thereof) of
the aggregate Liquidation Amount of Preferred Securities of a denomination
larger than the Liquidation Amount. The Property Trustee shall promptly notify
the trust registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
each Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the aggregate Liquidation Amount of Preferred Securities which has been or is
to be redeemed.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the Redemption Price of, each Capital
Trust's Preferred Securities and Common Securities, as applicable, shall be made
pro rata based on the Liquidation Amount of such Preferred Securities and Common
29
Securities; provided, however, that if on any Distribution Date or Redemption
Date an event of default with respect to any Subordinated Debt Security shall
have occurred and be continuing, no payment of any distribution on, or
Redemption Price of, any of such Capital Trust's Common Securities, and no other
payment on account of the redemption, liquidation or other acquisition of such
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid distributions on all of the Capital Trust's outstanding
Preferred Securities for all distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price the full amount of
such Redemption Price on all of the Capital Trust's outstanding Preferred
Securities then called for redemption, shall have been made or provided for, and
all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all distributions on, or Redemption Price of, the
Capital Trust's Preferred Securities then due and payable.
In the case of any event of default with respect to any subordinated debt
security, we, as holder of such Capital Trust's Common Securities, will be
deemed to have waived any right to act with respect to any such event of default
under the applicable Trust Agreement until the effect of all such events of
default with respect to such Preferred Securities has been cured, waived or
otherwise eliminated. Until any such events of default under the applicable
Trust Agreement with respect to the Preferred Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the holders of such Preferred Securities and not on our behalf as holder of
the Capital Trust's Common Securities, and only the holders of such Preferred
Securities will have the right to direct the Property Trustee to act on their
behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Unless otherwise specified in the applicable prospectus supplement, we have
the right at any time to terminate any Capital Trust and, after satisfaction of
the liabilities of the creditors of such Capital Trust as provided by applicable
law, cause such Corresponding Subordinated Debt Securities in respect of the
Preferred Securities and Common Securities issued by such Capital Trust to be
distributed to the holders of such Preferred Securities and Common Securities in
liquidation of such Capital Trust.
Pursuant to each Trust Agreement, each Capital Trust shall automatically
dissolve upon expiration of its term and shall dissolve on the first to occur
of: (i) certain events of bankruptcy, dissolution or our liquidation; (ii) the
distribution of a Like Amount of the Corresponding Subordinated Debt Securities
to the holders of its Trust Securities, if we, as sponsor, have given written
direction to the Property Trustee to dissolve such Capital Trust (which
direction is optional and wholly within the discretion of us, as sponsor); (iii)
redemption of all of the Capital Trust's Preferred Securities as described under
"Description of Preferred Securities-Redemption or Exchange"; and (iv) the entry
of an order for the dissolution of such Capital Trust by a court of competent
jurisdiction.
If an early dissolution occurs as described in clause (i), (ii) or (iv)
above, the Capital Trust shall be liquidated by the Issuer Trustee as
expeditiously as the Issuer Trustee determines to be possible by distributing,
after satisfaction of liabilities to creditors of such Capital Trust as provided
by applicable law, to the holders of such Trust Securities a Like Amount of the
Corresponding Subordinated Debt Securities, unless such distribution is
determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of such Capital Trust
available for distribution to holders, after satisfaction of liabilities to
creditors of such Capital Trust as provided by applicable law, an amount equal
to, in the case of holders of Preferred Securities, the aggregate of the
Liquidation Amount plus accrued and unpaid distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because such Capital Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by such Capital Trust on its
Preferred Securities shall be paid on a pro rata basis. The holder of such
Capital Trust's Common Securities will be entitled to receive distributions upon
any such liquidation pro rata with the holders of its Preferred Securities,
except that if a Subordinated Debt Security Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities. A supplement to the subordinated indenture may provide that if an
early dissolution occurs as described in clause (iv) above, the Corresponding
Subordinated Debt Securities may be subject to optional redemption in whole (but
not in part).
After the date fixed for any distribution of Corresponding Subordinated
Debt Securities for any series of Preferred Securities (i) such series of
Preferred Securities will no longer be deemed to be outstanding, (ii)
certificates representing the Corresponding Subordinated Debt Securities to be
delivered upon such distribution will be issued to the holders of the
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certificates for the Trust Securities upon surrender of such certificates for
exchange, (iii) we shall use our reasonable efforts to have the subordinated
debt securities listed on the exchange, interdealer quotation system or
self-regulatory system as the Preferred Securities are then listed and (iv) any
certificates representing such series of Preferred Securities not so exchanged
will be deemed to represent the Corresponding Subordinated Debt Securities
having a principal amount equal to the stated liquidation amount of such series
of Preferred Securities, and accruing interest at the rate provided for in the
debt securities until such certificates are presented to the Administrative
Trustees or his agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Subordinated Debt Securities that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of a Capital Trust were to occur. Accordingly, the Preferred
Securities that an investor may purchase, or the Corresponding Subordinated Debt
Securities that an investor may receive on dissolution and liquidation of a
Capital Trust, may trade at a discount to the price that the investor paid to
purchase the Preferred Securities.
EVENT OF DEFAULT; NOTICE
Unless otherwise specified in the applicable prospectus supplement, the
following event constitutes an "event of default" under each Trust Agreement
with respect to the Preferred Securities issued thereunder (whatever the reason
for such event of default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body): the occurrence of an event of default with respect to a Corresponding
Subordinated Debt Security under the subordinated indenture (see "Description of
the Debt Securities-Events of Default").
Within five Business Days after the occurrence of an event of default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such event of default to the holders of such Capital Trust's Preferred
Securities, the Administrative Trustees and us, as sponsor, unless such event of
default shall have been cured or waived. In our role as sponsor, we, along with
the Administrative Trustees, are required to file annually with the Property
Trustee a certificate as to whether or not we are in compliance with all the
conditions and covenants applicable to them under each Trust Agreement.
If an event of default with respect to a Corresponding Subordinated Debt
Security has occurred and is continuing, the Preferred Securities shall have a
preference over the Common Securities upon termination of each Capital Trust as
described above. See "--Liquidation Distribution Upon Dissolution." The
existence of an event of default under the applicable Trust Agreement does not
entitle the holders of Preferred Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEE
Unless an event of default with respect to a Corresponding Subordinated
Debt Security shall have occurred and be continuing, any Issuer Trustee may be
removed at any time by the holder of the Common Securities. If an event of
default resulting from an event of default with respect to a Corresponding
Subordinated Debt Security has occurred and is continuing, the Property Trustee
and the Delaware Trustee may be removed at such time by the holders of a
majority in Liquidation Amount of the outstanding Preferred Securities. In no
event will the holders of the Preferred Securities have the right to vote to
appoint, remove or replace any Administrative Trustee, which voting rights are
vested exclusively in us as the holder of the Common Securities. No resignation
or removal of an Issuer Trustee and no appointment of a successor trustee shall
be effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an event of default under the applicable Trust Agreement shall
have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
in which any part of a Capital Trust's property may at the time be located, we,
as the holder of the Common Securities, and the Administrative Trustees shall
have power to appoint one or more persons either to act as a co-trustee, jointly
with the Property Trustee, of all or any part of such property, or to act as
31
separate trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such person or persons
in such capacity any property, title, right or power deemed necessary or
desirable, subject to the provisions of the applicable Trust Agreement. In case
an event of default with respect to a subordinated debt security has occurred
and is continuing, the Property Trustee alone shall have power to make such
appointment.
MERGER OR CONSOLIDATION OF PROPERTY, DELAWARE TRUSTEE
Any corporation into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such trustee
shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of such trustee, shall be the successor of such trustee
under each Trust Agreement, provided such corporation shall be otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, CONVERSIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
CAPITAL TRUST
A Capital Trust may not merge with or into, consolidate, convert into,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other Person, except
as described below, as described in "-- Liquidation Distribution Upon
Dissolution" or as described in the prospectus supplement with respect to the
Preferred Securities. A Capital Trust may, at our request, with the consent of
the Administrative Trustees and without the consent of the holders of the
Preferred Securities, merge with or into, consolidate, convert into, amalgamate,
or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that:
o such successor entity either (a) expressly assumes all of the
obligations of such Capital Trust with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank in priority
with respect to distributions and payments upon liquidation,
redemption and otherwise;
o we expressly appoint a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the
Corresponding Subordinated Debt Securities;
o the Successor Securities are listed or traded, or any Successor
Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the
Preferred Securities are then listed or traded, if any;
o such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities
(including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
o such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities
(including any Successor Securities) in any material respect;
o such successor entity has a purpose substantially similar to that of
the Capital Trust;
o prior to such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease, we have received an
opinion of counsel to the effect that (a) such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of
the holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease, neither the Capital Trust nor such successor entity
will be required to register as an investment company under the
Investment Company Act; and
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o we or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the
extent provided by the Guarantee.
Notwithstanding the foregoing, a Capital Trust shall not, except with the
consent of holders of 100% in Liquidation Amount of the Preferred Securities,
merge with or into, consolidate, convert into, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other person or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such merger, consolidation, conversion,
amalgamation, replacement, conveyance, transfer or lease would cause such
Capital Trust or the successor entity to be classified as other than a grantor
trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "Description of Guarantees-Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by us, the Property
Trustee and the Administrative Trustees, without the consent of the holders of
the Preferred Securities (i) to cure any ambiguity, correct or supplement any
provisions in such Trust Agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under such Trust Agreement, which shall not be inconsistent with the
other provisions of such Trust Agreement or (ii) to modify, eliminate or add to
any provisions of such Trust Agreement to such extent as shall be necessary to
ensure that the Capital Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Capital Trust will not be required to
register as an "investment company" under the Investment Company Act; provided,
however, that in the case of clause (i), such action shall not adversely affect
in any material respect the interests of any holder of Trust Securities, and any
such amendments of such Trust Agreement shall become effective when notice
thereof is given to the holders of Trust Securities.
Each Trust Agreement may be amended by the Issuer Trustees and us with (i)
the consent of holders representing not less than a majority (based upon
Liquidation Amounts) of the outstanding Trust Securities and (ii) receipt by the
Issuer Trustees of an opinion of counsel to the effect that such amendment or
the exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not affect the Capital Trust's status as a grantor trust for
United States federal income tax purposes or the Capital Trust's exemption from
status as an "investment company" under the Investment Company Act; provided
that without the consent of each affected holder of Trust Securities, such Trust
Agreement may not be amended to (i) change the amount or timing of any
distribution on the Trust Securities or otherwise adversely affect the amount of
any distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Corresponding Subordinated Debt Securities are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee under
the subordinated indenture, or executing any trust or power conferred on the
Trustee with respect to such Corresponding Subordinated Debt Securities, (ii)
waive any past default that is waivable under the subordinated indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Corresponding Subordinated Debt Securities shall be due and payable or (iv)
consent to any amendment, modification or termination of the subordinated
indenture or such Corresponding Subordinated Debt Securities, where such consent
shall be required, without, in each case, obtaining the prior approval of the
holders of at least a majority in aggregate Liquidation Amount of all
outstanding Preferred Securities; provided, however, that where a consent under
the subordinated indenture would require the consent of each holder of
Corresponding Subordinated Debt Securities affected thereby, no such consent
shall be given by the Property Trustee without the prior consent of each holder
of the related Preferred Securities. The Issuer Trustee shall not revoke any
action previously authorized or approved by a vote of the holders of the
Preferred Securities except by subsequent vote of the holders of the Preferred
Securities. The Property Trustee shall notify all holders of Preferred
Securities of any notice of default received from the Trustee with respect to
the Corresponding Subordinated Debt Securities. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to taking
33
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Capital Trust will
not be classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote to be given to each
holder of record of Preferred Securities in the manner set forth in each Trust
Agreement.
No vote or consent of the holders of Preferred Securities will be required
for a Capital Trust to redeem and cancel its Preferred Securities in accordance
with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by us, the Issuer Trustees or any affiliate of ours or
any Issuer Trustee, shall, for purposes of such vote or consent, be treated as
if they were not outstanding.
GLOBAL PREFERRED SECURITIES
Unless otherwise provided in the prospectus supplement relating to an
offering of Preferred Securities and any Corresponding Subordinated Debt
Securities, the Preferred Securities and the Corresponding Subordinated Debt
Securities will be issued only as fully-registered global securities registered
in the name of the depository identified in the applicable prospectus
supplement. One or more fully-registered global securities will be issued for
the Preferred Securities of each Capital Trust and the Corresponding
Subordinated Debt Securities, representing in the aggregate the total number of
such Capital Trust's Preferred Securities or aggregate principal balance of
Corresponding Subordinated Debt Securities, respectively, and will be deposited
with the depository.
Any additional or alternative terms of the depository arrangements with
respect to a series of Preferred Securities and any Corresponding Subordinated
Debt Securities and the rights of and limitations on owners of beneficial
interests in book-entry securities representing all or a portion of a series of
Preferred Securities and any Corresponding Subordinated Debt Securities may be
described in the prospectus supplement relating to such series.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
depository, which shall credit the relevant accounts at the depository on the
applicable Distribution Dates or, if the Capital Trust's Preferred Securities
are not held by the depository, such payments shall be made by check mailed to
the address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the applicable prospectus supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustee and to us. The Paying Agent shall be permitted to resign
as Paying Agent upon 30 days' written notice to the Administrative Trustee, the
Property Trustee and to us. In the event that the Property Trustee shall no
longer be the Paying Agent, the Administrative Trustee shall appoint a successor
(which shall be a bank or trust company) acceptable to the Property Trustee and
to us to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable prospectus supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Capital Trust, but upon payment of any tax or
governmental charges that may be imposed in connection with any transfer or
exchange. The Capital Trusts will not be required to register or cause to be
registered the transfer of their Preferred Securities after such Preferred
Securities have been called for redemption.
34
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an event of default, undertakes to perform only such duties as are specifically
set forth in each Trust Agreement and, after such event of default, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
Property Trustee is under no obligation to exercise any of the rights or powers
vested in it by the applicable Trust Agreement at the request or direction of
any holder of Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby. If
in performing its duties under the Trust Agreement, the Property Trustee is
required to decide between alternative courses of action, construe ambiguous
provisions in the applicable Trust Agreement or is unsure of the application of
any provision of the applicable Trust Agreement, and the matter is not one on
which holders of Preferred Securities are entitled under the applicable Trust
Agreement to vote, then the Property Trustee shall take such action as we direct
and if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate each Capital Trust so that no Capital Trust will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or taxed as a corporation for United States federal
income tax purposes and so that the Corresponding Subordinated Debt Securities
will be treated as our indebtedness for United States federal income tax
purposes. In this connection, we, along with the Administrative Trustees, are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of each Capital Trust or each Trust Agreement, that we and
the Administrative Trustees determine in our discretion to be necessary or
desirable for such purposes, as long as such action does not adversely affect in
any material respect the interests of the holders of the related Preferred
Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Capital Trust may borrow money or issue debt or mortgage or pledge any
of its assets.
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by us concurrently with the
issuance by each Capital Trust of its Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. Unless otherwise
specified in the applicable prospectus supplement, Bankers Trust Company will
act as indenture trustee ("Guarantee Trustee") under each Guarantee for the
purposes of compliance with the Trust Indenture Act, and each Guarantee will be
qualified as an indenture under the Trust Indenture Act. This summary of certain
provisions of the Guarantees does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of each
Guarantee Agreement, including the definitions therein of certain terms, and the
Trust Indenture Act. The form of the Guarantee has been filed as an exhibit to
the Registration Statement of which this prospectus forms a part. Reference in
this summary to Preferred Securities means that the Capital Trust's Preferred
Securities to which the Guarantee relates. The Guarantee Trustee will hold each
Guarantee for the benefit of the holders of the related Capital Trust's
Preferred Securities.
GENERAL
Unless otherwise specified in the applicable prospectus supplement, we will
irrevocably and unconditionally agree to pay in full on a subordinated basis, to
the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that such Capital Trust may have or assert
other than the defense of payment. The following payments or distributions,
without duplication with respect to the Preferred Securities, to the extent not
paid by or on behalf of the related Capital Trust (the "Guarantee Payments"),
will be subject to the Guarantee:
35
o any accumulated and unpaid distributions required to be paid on such
Preferred Securities, to the extent that such Capital Trust has funds
on hand available therefor at such time;
o the Redemption Price with respect to any Preferred Securities called
for redemption by the Capital Trust to the extent that such Capital
Trust has funds on hand available therefor at such time;
o upon a voluntary or involuntary dissolution, winding up or liquidation
of such Capital Trust (unless the Corresponding Subordinated Debt
Securities are distributed to holders of such Preferred Securities),
the lesser of (a) the Liquidation Amount per Preferred Security plus
accumulated and unpaid distributions and (b) the amount of assets of
such Capital Trust remaining available for distribution to holders of
Preferred Securities.
Our obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by us to the holders of the applicable Preferred
Securities or by causing the Capital Trust to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Capital Trust's obligations under the Preferred Securities, but will
apply only to the extent that such related Capital Trust has funds sufficient to
make such payments and is not a guarantee of collection.
If we do not make interest payments on the Corresponding Subordinated Debt
Securities held by the Capital Trust, the Capital Trust will not be able to pay
distributions on the Preferred Securities and will not have funds legally
available therefor. Each Guarantee will rank subordinate and junior in right of
payment to all of our indebtedness. See "--Status of the Guarantee." The
majority of our operating assets and of our consolidated subsidiaries are owned
by such subsidiaries. We rely primarily on dividends from such subsidiaries to
meet our obligations for payment of principal and interest on our outstanding
debt obligations and corporate expenses. Accordingly, our obligations under
Guarantees will be effectively subordinated to all existing and future
liabilities of our subsidiaries, and claimants should look only to our assets
for payments thereunder. Except as otherwise provided in the applicable
prospectus supplement, the Guarantees do not limit us from incurring or issuing
other secured or unsecured debt, whether under the indentures, any other
indenture that we may enter into in the future or otherwise. See the prospectus
supplement relating to any offering of Preferred Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of the related Preferred Securities in any material respect (in which
case no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of such outstanding Preferred Securities. The manner of obtaining any
such approval will be as set forth under "Description of Preferred
Securities--Voting Rights; Amendment of The Trust Agreement." All guarantees and
agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and our representatives and shall inure to the benefit of
the holders of the related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur if we fail to perform
any of our payment or other obligations thereunder, provided that except for a
payment default, we have received notice and have not cured such default within
60 days. The holders of not less than a majority in aggregate Liquidation Amount
of the related Preferred Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of such Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under such Guarantee.
If the Guarantee Trustee fails to enforce a Guarantee, any holder of the
Preferred Securities may institute a legal proceeding directly against us to
enforce its rights under such Guarantee without first instituting a legal
proceeding against the Capital Trust, or any other person or entity. If we have
failed to make a Guarantee Payment under a Guarantee, a record holder of
Preferred Securities to which the Guarantee relates may directly institute a
proceeding against us for enforcement of such Guarantee for such payment. We
have waived any right or remedy to require that any action be brought first
against the applicable Capital Trust or any other person or entity before
36
proceeding directly against us. The record holder in the case of the issuance of
one or more global Preferred Securities certificates will be DTC acting at the
direction of the beneficial owners of the Preferred Securities.
We are required, as guarantor to file annually with the Guarantee Trustee a
certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by us in performance of the Guarantee, undertakes to perform only such
duties as are specifically set forth in each Guarantee and, after default with
respect to any Guarantee, must exercise the same degree of care and skill as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs. Subject to this provision, the Guarantee Trustee is
under no obligation to exercise any of the powers vested in it by any Guarantee
at the request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Capital
Trust or upon distribution of Corresponding Subordinated Debt Securities to the
holders of the related Preferred Securities. Each Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the related Preferred Securities must repay any sums paid under such
Preferred Securities or such Guarantee.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING SUBORDINATED DEBT SECURITIES
AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of distributions and other amounts due on the Preferred Securities
(to the extent the Capital Trust has funds available for the payment of such
distributions) are irrevocably guaranteed by us as and to the extent set forth
under "Description of Guarantees." Taken together, our obligations under each
series of Corresponding Subordinated Debt Securities, the subordinated
indenture, the related Trust Agreement and the related Guarantee provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
distributions and other amounts due on the related series of Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes the guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Capital Trust's obligations under
the Preferred Securities. If and to the extent that we do not make payments on
any series of Corresponding Subordinated Debt Securities, such Capital Trust
will not pay distributions or other amounts due on its Preferred Securities. The
Guarantees do not cover payment of distributions when the related Capital Trust
does not have sufficient funds to pay such distributions. In such event, the
remedy of a holder of a series of Preferred Securities is to institute a legal
proceeding directly against us for enforcement of payment of such distributions
to such holder. Our obligations under each Guarantee are subordinate and junior
in right of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Subordinated Debt Securities, such payments will be
sufficient to cover distributions and other payments due on the related
Preferred Securities, primarily because:
37
o the aggregate principal amount of each series of Corresponding
Subordinated Debt Securities will be equal to the sum of the aggregate
stated Liquidation Amount of the related Preferred Securities and
related Common Securities;
o the interest rate and interest and other payment dates on each series
of Corresponding Subordinated Debt Securities will match the
distribution rate and distribution and other payment dates for the
related Preferred Securities;
o we shall pay for all and any costs, expenses and liabilities of such
Capital Trust except the Capital Trust's obligations to holders of its
Preferred Securities under such Preferred Securities; and
o each Trust Agreement further provides that the Capital Trust will not
engage in any activity that is not consistent with the limited
purposes of such Capital Trust.
Notwithstanding anything to the contrary in the subordinated indenture, we
have the right to set-off any payment we are otherwise required to make
thereunder with and to the extent we have made, or are concurrently on the date
of such payment making, a payment under the related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding
directly against us to enforce its rights under the related Guarantee without
first instituting a legal proceeding against the related Capital Trust or any
other person or entity.
A default or event of default under any of our Senior Indebtedness would
not necessarily constitute a default under the subordinated indenture or any
Trust Agreement. However, in the event of payment defaults under, or
acceleration of, our Senior Indebtedness, the subordination provisions of the
subordinated indenture provide that no payments may be made in respect of the
Corresponding Subordinated Debt Securities until such Senior Indebtedness has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on any series of Corresponding Subordinated
Debt Securities would constitute an event of default under each Trust Agreement.
LIMITED PURPOSE OF THE CAPITAL TRUST
Each Capital Trust's Preferred Securities evidence undivided beneficial
ownership interests in the assets of such Capital Trust, and each Capital Trust
exists for the sole purpose of issuing its Preferred Securities and Common
Securities, investing the proceeds thereof in Corresponding Subordinated Debt
Securities and engaging in only those other activities necessary, convenient or
incidental thereto. A principal difference between the rights of a holder of a
Preferred Security and a holder of a Corresponding Subordinated Debt Security is
that a holder of a Corresponding Subordinated Debt Security is entitled to
receive from us the principal amount of and interest accrued on Corresponding
Subordinated Debt Securities held, while a holder of Preferred Securities is
entitled to receive distributions from such Capital Trust (or from us under the
applicable Guarantee) if and to the extent such Capital Trust has funds
available for the payment of such distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of any Capital Trust
involving the liquidation of the Corresponding Subordinated Debt Securities, the
holders of the related Preferred Securities will be entitled to receive, out of
assets held by such Capital Trust and, after satisfaction of creditors of such
Capital Trust as provided by applicable law, the Liquidation Distribution in
cash. See "Description of Preferred Securities--Liquidation Distribution Upon
Dissolution." Upon any voluntary or involuntary liquidation or our bankruptcy,
the Property Trustee, as holder of the Corresponding Subordinated Debt
Securities, would be our subordinated creditor, subordinated in right of payment
to all Senior Indebtedness, but entitled to receive payment in full of principal
and interest, before any of our stockholders receive payments or distributions.
Since we are the guarantor under each Guarantee and we have agreed to pay for
all costs, expenses and liabilities of each Capital Trust (other than the
Capital Trust's obligations to the holders of its Preferred Securities), the
38
positions of a holder of such Preferred Securities and a holder of such
Corresponding Subordinated Debt Securities relative to other creditors and to
our stockholders in the event of liquidation or our bankruptcy are expected to
be substantially the same.
39
PLAN OF DISTRIBUTION
We and the Capital Trusts may offer, sell or exchange the securities
described in this prospectus:
o through agents;
o through one or more underwriters;
o through one or more dealers;
o directly to one or more purchasers (through a specific bidding or
auction process or otherwise);
o through a combination of any such methods of sale; or
o at a fixed exchange ratio in return for other of our securities.
The distribution of the securities described in this prospectus may be
effected from time to time in one or more transactions either:
o at a fixed price or prices, which may be changed;
o at market prices prevailing at the time of sale;
o at prices relating to such prevailing market prices; or
o at negotiated prices.
Distribution By Agents
The securities may be sold on a continuing basis through agents. The agents
will agree to use their reasonable efforts to solicit purchases for the period
of their appointment under the terms of an agency agreement between the agents
and us.
We and the Capital Trusts will receive all proceeds from the sale of the
securities, after paying the agents a commission. In addition, we will agree to
reimburse any agents for certain of their expenses in connection with the sale
of the securities.
The agents will sell the securities on the New York Stock Exchange, or on
any other exchange on which the securities are listed, at prevailing market
prices through ordinary brokers' transactions or in block transactions. In block
transactions, the agents may purchase all or a portion of the securities as
principal for their own account and resell them.
The agents may also sell the securities in a fixed price offering. If this
happens, we will sell securities to the agents for their own account at a
negotiated price, which is related to the prevailing market price, and the
agents may form a group of dealers to participate with them in reselling the
securities to you.
The agents may also sell the securities by conducting a special offering or
exchange distribution in accordance with the rules of the stock exchange on
which the securities are listed.
The agents will not be obligated to make a market in the securities. We
cannot predict the amount of trading or liquidity of the securities.
Distribution By Underwriters
If underwriters are used in the sale, the securities may be acquired by the
underwriters for their own account. The underwriters may resell the securities
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale which
may be changed. The obligations of the underwriters to purchase the securities
will be subject to certain conditions. The underwriters will be obligated to
purchase all the securities of the specific series offered if any of such
securities are purchased. Any initial public offering price and any discounts or
40
concessions allowed or re-allowed or paid to dealers may be changed from time to
time. We may also grant underwriters an option to buy additional securities to
cover overallotments in the sales of the securities they may acquire from us.
Distribution Direct Sales
We and the Capital Trusts may sell the securities directly. In this case,
no underwriters or agents would be involved.
General Information
Dealers, agents and underwriters that participate in the distribution of
the securities may be underwriters as defined in the Securities Act of 1933, and
any discounts or commissions received by them from us and any profit on the
resale of the securities by them may be treated as underwriting discounts and
commissions under the 1933 Act.
We and the Capital Trusts may have agreements with the agents, dealers and
underwriters to indemnify them for certain civil liabilities, including
liabilities under the 1933 Act or to contribute with respect to payments which
the agents, dealers or underwriters may be required to make.
In connection with any fixed price offering, exchange distribution or
special offering, the selling group, which would include dealers who enter into
an underwriting agreement with us, may engage in transactions which stabilize,
maintain or otherwise affect the market price of the securities. Specifically,
the selling group may overallot in connection with the offering, creating a
short position. In addition, they may bid for, and purchase, the securities in
the open market to cover shorts or to stabilize the price of the common stock.
Finally, the selling group may reclaim selling concessions allowed for
distributing the securities in the offering, if the selling group repurchases
previously distributed securities in the market to cover overallotments or to
stabilize the price of the securities. Any of these activities may stabilize or
maintain the market price of the securities above independent market levels. The
selling group is not required to engage in any of these activities, and may stop
any of the activities at any time.
Dealers, agents and underwriters that participate in the distribution
of the securities may engage in transactions with, or perform services for, us
or our subsidiaries in the ordinary course of their business.
LEGAL MATTERS
LeBoeuf, Lamb, Greene & MacRae, L.L.P., a limited liability partnership
including professional corporations, will issue an opinion to us relating to the
legality of the securities other than the Trust Securities being offered by this
prospectus. Morris, James, Hitchens & Williams LLP will issue an opinion to us
relating to the legality of the Trust Securities being offered by this
prospectus. Certain legal matters in conjunction with the offering of the
securities will be passed upon for any underwriters, brokers or agents by
Cleary, Gottlieb, Steen & Hamilton.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from Covanta Energy Corporation's
(formerly Ogden Corporation) Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
41
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC registration fee............................... $ 87,500
Printing and engraving expenses*................... 250,000
Legal fees and expenses*........................... 350,000
Accounting fees and expenses*...................... 150,000
Rating agency fees*................................ 100,000
Trustee fees and expenses*......................... 20,000
Transfer agent and registrar fees*................. 10,000
Blue sky*.......................................... 12,000
Miscellaneous*..................................... 45,000
----------------
Total.............................................. $ 1,025,000
================
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 (a) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a Delaware corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no cause to believe his
or her conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted under similar standards to
those set forth above, except that no indemnification may be made in respect to
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsection (a) and (b) of Section 145 or in the
defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses actually and reasonably incurred by him or her in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
such officer or director and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liabilities under Section
145.
42
As authorized by Section 145 of the DGCL, each director and officer of
Covanta may be indemnified by Covanta against expenses (including attorney's
fees, judgments, fines and amounts paid in settlement) actually and reasonably
incurred in connection with the defense or settlement of any threatened, pending
or completed legal proceedings in which he is involved by reason of the fact
that he is or was a director or officer of Covanta if he acted in good faith and
in a manner that he reasonably believed to be in or not opposed to the best
interest of Covanta and, with respect to any criminal action or proceeding, if
he had no reasonable cause to believe that his conduct was unlawful. However, if
the legal proceeding is by or in the right of Covanta, the director or officer
may not be indemnified in respect of any claim, issue or matter as to which he
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to Covanta unless a court determines otherwise.
In addition, Section 16-A of Covanta's By-Laws provides that Covanta shall
indemnify any person who was or is made or is a party to or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation where the person has been adjudged liable
to Covanta) by reason of the fact that he is or was a director, officer,
employee or agent of Covanta, or is or was serving at the request of Covanta as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference:
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
1.1* Form of Underwriting Agreement
4.1 Form of Senior Indenture. The form or forms of Senior Debt Securities
with respect to each particular offering will be filed as an exhibit
to a Current Report on Form 8-K and incorporated herein by reference.
4.2 Form of Subordinated Debt Indenture. The form or forms of Subordinated
Debt Securities with respect to each particular offering will be filed
as an exhibit to a Current Report on Form 8-K and incorporated herein
by reference.
4.3 Restated Certificate of Incorporation as amended (filed as Exhibit
3.1(a) to the Form 10-K for fiscal year ended December 31, 1988, and
incorporated herein by reference)
4.4 By-Laws, as amended through April 8, 1998 (filed as Exhibit 3.2 to the
Form 10-Q for quarterly period ended March 3, 1998, and incorporated
herein by reference)
4.5 Amended and Restated Rights Agreement between Covanta Energy
Corporation and the Bank of New York, dated as of September 28,2000
(filed as Exhibit 1 to Amendment No. 1 to the Form 8-A filed September
29,2000, and incorporated herein by reference)
4.6* Form of Certificate of Designation relating to each series of
Preferred Stock
4.7* Form of Deposit Agreement
4.8* Form of Warrant Agreement, including form of Warrant Certificate
4.9* Form of Stock Purchase Contract
4.10 Certificate of Trust of Covanta Capital Trust I
4.11 Trust Agreement of Covanta Capital Trust I
43
4.12 Certificate of Trust of Covanta Capital Trust II
4.13 Trust Agreement of Covanta Capital Trust II
4.14 Certificate of Trust of Covanta Capital Trust III
4.15 Trust Agreement of Covanta Capital Trust III
4.16 Form of Amended and Restated Trust Agreement for Covanta Capital Trust
I, II and III
4.17 Form of Preferred Security Certificate for Covanta Capital Trust I, II
and III (included as Exhibit D of Exhibit 4.16)
4.18 Form of Guarantee Agreement for Covanta Capital Trust I, II and III
5.1 Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
5.2 Opinion of Morris, James, Hitchens & Williams LLP with respect to
Preferred Securities of Covanta Capital Trust I
5.3 Opinion of Morris, James, Hitchens & Williams LLP with respect to
Preferred Securities of Covanta Capital Trust II
5.4 Opinion of Morris, James, Hitchens & Williams LLP with respect to
Preferred Securities of Covanta Capital Trust III
12.1 Computation of Ratios of Earnings to Fixed Charges
23.1 Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included in Exhibit
5.1)
23.2 Consent of Morris, James, Hitchens & Williams LLP (included in
Exhibits 5.2, 5.3 and 5.4)
23.3 Consent of Deloitte & Touche LLP
24.1 Powers of Attorney (contained in, and incorporated by reference to the
signature page of this registration statement)
25.1 Form T-1 Statement of Eligibility of Trustee under the Trust Indenture
Act of 1939 of Bankers Trust Company, as (i) Trustee under the Senior
Indenture; (ii) Trustee under the Subordinated Indenture; (iii)
Property Trustee under the Amended and Restated Trust Agreement of
Covanta Capital Trust I, II and II; and (iv) Trustee under the
Guarantee for the benefit of the holders of Preferred Securities of
Covanta Capital Trust I, II and III
26.1* Form of Invitation for Competitive Bids
- --------
* To be filed by amendment or as an exhibit to a document to be incorporated
by reference herein.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(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;
(ii) To reflect in the prospectus any facts of 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 form of
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act if, in the aggregate, the changes in volume and price
present no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(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, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
44
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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 the 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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and where applicable each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
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.
(5) To file an application for the purpose of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act of 1939 in accordance with the rules and regulations prescribed by the
Commission under Section 305 (b) (2) of the Trust Indenture Act of 1939.
(6) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424 (b) (1) or (4)
or 497 (h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(7) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(8) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 15 of this
registration statement, or otherwise, the Registrant has 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 Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, on this 17th day of July, 2001.
COVANTA ENERGY CORPORATION
By /s/ Scott G. Mackin
--------------------------------
Scott G. Mackin
President and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature to this
Registration Statement appears below hereby constitutes and appoints Scott G.
Mackin and William J. Metzger and each of them, as such person's true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution
for such person and in such person's name, place and stead, in any and all
capacities, to sign and to file with the Securities and Exchange Commission, any
and all amendments and post-effective amendments to this registration statement
and any registration statement for the same offering covered by this
registration statement that is to be effective upon filing pursuant to Rule 462
(b) of the Securities Act of 1933, with exhibits thereto and other documents in
connection therewith, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that each said attorney-in-fact and agent, or any substitute
therefor, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/s/ Scott G. Mackin President, Chief Executive Officer July 17, 2001
- -------------------
SCOTT G. MACKIN and Director
/s/ Edward W. Moneypenny Executive Vice President and Chief July 17, 2001
- ------------------------
EDWARD W. MONEYPENNY Financial Officer
/s/ William J. Metzger Vice President and Chief Accounting July 17, 2001
- ----------------------
WILLIAM J. METZGER Officer
/s/ Anthony J. Bolland Director July 17, 2001
- ----------------------
ANTHONY J. BOLLAND
/s/ Norman g. Einspruch Director July 17, 2001
- -----------------------
NORMAN G. EINSPRUCH
/s/ George L. Farr Director July 17, 2001
- ------------------
GEORGE L. FARR
/s/ Jeffrey P. Friedman Director July 17, 2001
- -----------------------
JEFFREY P. FRIEDMAN
/s/ Veronica M. Hagen Director July 17, 2001
- ---------------------
VERONICA M. HAGEN
46
/s/ Craig G. Matthews Director July 17, 2001
- ---------------------
CRAIG G. MATTHEWS
/s/ Homer A. Neal Director July 17, 2001
- -----------------
HOMER A. NEAL
/s/ Robert E. Smith Director July 17, 2001
- -------------------
ROBERT E. SMITH
/s/ Joseph A. Tato Director July 17, 2001
- ------------------
JOSEPH A. TATO
Helmut F.O. Volcker Director July 17, 2001
- -------------------
HELMUT F.O. VOLCKER
/s/ Robert R. Womack Director July 17, 2001
- --------------------
ROBERT R. WOMACK
47
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each 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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, on this 17th day of July, 2001.
COVANTA CAPITAL TRUST I
By: Covanta Energy Corporation, as sponsor
By: /s/ Louis M. Walters
-------------------------------
Louis M. Walters
Vice President and Treasurer
COVANTA CAPITAL TRUST II
By: Covanta Energy Corporation, as sponsor
By: /s/ Louis M. Walters
-------------------------------
Louis M. Walters
Vice President and Treasurer
COVANTA CAPITAL TRUST III
By: Covanta Energy Corporation, as sponsor
By: /s/ Louis M. Walters
-------------------------------
Louis M. Walters
Vice President and Treasurer
48
EXHIBIT INDEX
The following exhibits are filed herewith or incorporated by reference:
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------
1.1* Form of Underwriting Agreement
4.1 Form of Senior Indenture. The form or forms of Senior Debt Securities
with respect to each particular offering will be filed as an exhibit
to a Current Report on Form 8-K and incorporated herein by reference.
4.2 Form of Subordinated Debt Indenture. The form or forms of Subordinated
Debt Securities with respect to each particular offering will be filed
as an exhibit to a Current Report on Form 8-K and incorporated herein
by reference.
4.3 Restated Certificate of Incorporation as amended (filed as Exhibit
3.1(a) to the Form 10-K for fiscal year ended December 31, 1988, and
incorporated herein by reference)
4.4 By-Laws, as amended through April 8, 1998 (filed as Exhibit 3.2 to the
Form 10-Q for quarterly period ended March 3, 1998, and incorporated
herein by reference)
4.5 Amended and Restated Rights Agreement between Covanta Energy
Corporation and the Bank of New York, dated as of September 28,2000
(filed as Exhibit 1 to Amendment No. 1 to the Form 8-A filed September
29,2000, and incorporated herein by reference)
4.6* Form of Certificate of Designation relating to each series of
Preferred Stock
4.7* Form of Deposit Agreement
4.8* Form of Warrant Agreement, including form of Warrant Certificate
4.9* Form of Stock Purchase Contract
4.10 Certificate of Trust of Covanta Capital Trust I
4.11 Trust Agreement of Covanta Capital Trust I
4.12 Certificate of Trust of Covanta Capital Trust II
4.13 Trust Agreement of Covanta Capital Trust II
4.14 Certificate of Trust of Covanta Capital Trust III
4.15 Trust Agreement of Covanta Capital Trust III
4.16 Form of Amended and Restated Trust Agreement for Covanta Capital Trust
I, II and III
4.17 Form of Preferred Security Certificate for Covanta Capital Trust I, II
and III (included as Exhibit D to Exhibit 4.16)
4.18 Form of Guarantee Agreement for Covanta Capital Trust I, II and III
5.1 Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
5.2 Opinion of Morris, James, Hitchens & Williams LLP with respect to
Preferred Securities of Covanta Capital Trust I
5.3 Opinion of Morris, James, Hitchens & Williams LLP with respect to
Preferred Securities of Covanta Capital Trust II
5.4 Opinion of Morris, James, Hitchens & Williams LLP with respect to
Preferred Securities of Covanta Capital Trust III
12.1 Computation of Ratios of Earnings to Fixed Charges
23.1 Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included in Exhibit
5.1)
23.2 Consent of Morris, James, Hitchens & Williams LLP (included in
Exhibits 5.2, 5.3 and 5.4)
23.3 Consent of Deloitte & Touche LLP
24.1 Powers of Attorney (contained in, and incorporated by reference to the
signature page of this registration statement)
25.1 Form T-1 Statement of Eligibility of Trustee under the Trust Indenture
Act of 1939 of Bankers Trust Company, as (i) Trustee under the Senior
Indenture; (ii) Trustee under the Subordinated Indenture; (iii)
Property Trustee under the Amended and Restated Trust Agreement of
Covanta Capital Trust I, II and II; and (iv) Trustee under the
Guarantee for the benefit of the holders of Preferred Securities of
Covanta Capital Trust I, II and III
49
26.1* Form of Invitation for Competitive Bids
- --------
* To be filed by amendment or as an exhibit to a document to be incorporated
by reference herein.
50