Exhibit 99.1
Instructions as to Use of
Harken Energy Corporation
Rights Certificates
Consult the Subscription Agent, your bank or broker
if you have any questions.
The following instructions relate to a rights offering (the "Rights
Offering") by Harken Energy Corporation, a Delaware corporation (the "Company"),
to the holders of record (collectively, the "Recordholders") of its common
stock, par value $0.01 per share (the "Common Stock"), its Series G1 Preferred
Stock and its Series G2 Preferred Stock (collectively, the "Preferred Stock") as
described in the Company's prospectus dated ______________, 2002 (the
"Prospectus"). Recordholders at the close of business on ______________, 2002
(the "Record Date") are receiving non-transferable subscription rights (the
"Rights") to subscribe for and purchase shares of the Company's Common Stock
(the "Underlying Shares"). An aggregate of 95,238,096 million Underlying Shares
are being offered by the Prospectus. Each Recordholder will receive one Right
for each share of Common Stock owned (or in the case of the Preferred Stock, one
Right for each share of Common Stock issuable upon conversion) as of the Record
Date. The Rights will expire, if not exercised, at 5:00 p.m., New York City
time, on ______________, 2002, unless extended under certain circumstances (as
it may be extended, the "Expiration Date"). After the Expiration Date,
unexercised Rights will be null and void. The Company will not be obligated to
honor any purported exercise of Rights received by (the "Subscription Agent")
after 5:00 p.m., New York City time, on the Expiration Date, regardless of when
the documents relating to such exercise were sent, except pursuant to the
Guaranteed Delivery Procedures described below. The Company may extend the
Expiration Date by giving oral or written notice to the Subscription Agent on or
before the Expiration Date, followed by a press release no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. The Rights will be evidenced by non-transferable Rights
certificates (the "Rights Certificates").
Each subscription right will entitle the holder to purchase the number of
shares of Common Stock equal to $10 million, divided by the Subscription Price,
divided by ______________, the number of shares of common stock outstanding plus
the number of shares of common stock issuable upon conversion of the Series G1
preferred stock, and Series G2 preferred stock, on the Record Date (the
"Subscription Right"). The Subscription Price for the subscription rights will
equal 70% of the current market price of the common stock. The Company will
determine the current market price of the common stock by averaging the closing
price of the common stock on the American Stock Exchange for the five (5)
trading days immediately preceding the commencement of the offering, except the
current market price will be no greater than $0.50 per share or less than $0.15
per share.
Lyford Investments Enterprises Ltd., a creditor of the Company, has agreed
to act as a standby underwriter in the offering and will purchase any and all
shares not subscribed for by other stockholders.
The number of Rights to which you are entitled is printed on the face of
your Rights Certificate. You should indicate your wishes with regard to the
exercise of your Rights by completing the appropriate portions of your Rights
Certificate and returning the certificate to the Subscription Agent in the
envelope provided.
Your Rights Certificates, or Notice of Guaranteed Delivery, and
Subscription Price payment, must be received by the Subscription Agent on or
before 5:00 p.m., New York City time, on the expiration date. Once a holder of
Rights has exercised the Subscription Right, such exercise may not be revoked.
Rights not exercised prior to the expiration date of the Rights Offering will
expire.
1. Method of Subscription - Exercise of Rights.
To exercise Rights, complete your Rights Certificate and send the properly
completed and executed Rights Certificate evidencing such Rights with any
signatures required to be guaranteed so guaranteed, together with payment in
full of the Subscription Price for each Underlying Share subscribed for pursuant
to the Subscription Right, to the Subscription Agent, on or prior to 5:00 p.m.,
New York City time, on the Expiration Date. Payment of the Subscription Price
will be held in a segregated account to be maintained by the Subscription Agent.
All payments must be made in U.S. dollars for the full number of Underlying
Shares being subscribed for
(a) by uncertified personal check, payable to American Stock Transfer
& Trust Company as Subscription Agent for the Company. Please note that
funds paid by uncertified personal check may take at least five business
days to clear. Accordingly, subscription rights holders who wish to pay the
purchase price by means of an uncertified personal check are urged to make
payment sufficiently in advance of the expiration date to ensure that such
payment is received and clears by the expiration date, and are urged to
consider payment by means of a certified or bank check, money order or wire
transfer of immediately available funds,
(b) by certified check or bank check drawn on a U.S. bank or money
order, payable to American Stock Transfer & Trust Company as Subscription
Agent for the Company, or
(c) Wire transfer directed to the account maintained by American Stock
Transfer & Trust Company (the "Subscription Account") at
Chase Manhattan Bank,
[Address]
ABA #021000021,
Credit Account No. _______________________________________
Account Name: American Stock Transfer & Trust Company
Escrow Agent
Any wire transfer should clearly indicate the identity of the subscriber who is
paying the Subscription Price by the wire transfer. Payment will be deemed to
have been received by the Subscription Agent only upon:
(a) receipt and clearance of any uncertified check;
(b) receipt by the Subscription Agent of any certified check or bank
draft drawn upon a U.S. bank, any money order or any funds transferred by
wire transfers; or
(c) receipt of good funds in the Subscription Account designated
above.
The Rights Certificate and payment of the Subscription Price, or, if
applicable, Notices of Guaranteed Delivery (as defined below) must be delivered
to the Subscription Agent by one of the methods described below:
2
By mail, by hand or by overnight courier to:
American Stock Transfer & Trust Company
Attention: Rights Agent
59 Maiden Lane
New York, N.Y. 10038
Telephone Number for Confirmation or Information: (718) 921-8237
Delivery to an address other than those above does not constitute valid
delivery.
By making arrangements with your bank or broker for the delivery of funds
on your behalf you may also request such bank or broker to exercise the Rights
Certificate on your behalf. Alternatively, you may cause a written guarantee
substantially in the form of Exhibit A to these instructions (the "Notice of
Guaranteed Delivery"), from a member firm of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc., or
from a commercial bank or trust company having an office or correspondent in the
United States or from a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee medallion
program, pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as
amended, (each, an "Eligible Institution"), to be received by the Subscription
Agent on or prior to the Expiration Date together with payment in full of the
applicable Subscription Price. Such Notice of Guaranteed Delivery must state
your name, the number of Rights represented by the Rights Certificate or Rights
Certificates held by you, the number of Underlying Shares being subscribed for
pursuant to the Subscription Right, and that you will guarantee the delivery to
the Subscription Agent of any properly completed and executed Rights Certificate
or Rights Certificates evidencing such Rights within three (3) business days
following the date of the Notice of Guaranteed Delivery. If this procedure is
followed, the properly completed Rights Certificate or Rights Certificates
evidencing the Rights being exercised, with any signatures required to be
guaranteed so guaranteed, must be received by the Subscription Agent within
three (3) business days following the date of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered to the Subscription Agent in
the same manner as Rights Certificates at the address set forth above, or may be
transmitted to the Subscription Agent by facsimile transmission (Facsimile No.
(718) 234-5001). Additional copies of the Notice of Guaranteed Delivery may be
obtained upon request from the Subscription Agent at the address, or by calling
the telephone number set forth above.
If the aggregate Subscription Price paid by you is insufficient to purchase
the number of Underlying Shares subscribed for, or if no number of Underlying
Shares to be purchased is specified, then you will be deemed to have exercised
the Subscription Right to purchase Underlying Shares to the full extent of the
payment tendered.
If the aggregate Subscription Price paid by you exceeds the amount
necessary to purchase the number of Underlying Shares for which you have
indicated an intention to subscribe (such excess being the "Subscription
Excess"), then any remaining amount shall be returned to you by mail without
interest or deduction as soon as practicable after the Expiration Date and after
all pro-rations and adjustments contemplated by the terms of the Rights Offering
have been effected.
2. Issuance of Common Stock.
The following deliveries and payments will be made to the address shown on
the face of your Rights Certificate unless you provide instructions to the
contrary in your Rights Certificate.
(a) Subscription Right. As soon as practicable after the Expiration
Date and the valid exercise of Rights, the Subscription Agent will mail to
each exercising Rights holder certificates
3
representing shares of Common Stock purchased pursuant to the Subscription
Right. See "The Rights Offering - Subscription Rights" in the Prospectus.
(b) Excess Cash Payments. As soon as practicable after the Expiration
Date and after all pro-rations and adjustments contemplated by the terms of
the Rights Offering have been effected, the Subscription Agent will mail to
each Rights holder any Subscription Excess, without interest or deduction.
3. Sale or Transfer of Rights.
The Rights are not transferable in any way, except to affiliates of the
recipient and except by operation of law. Evidence satisfactory to the Company
that any such permitted transfer is proper must be received by the Company prior
to the Expiration Date.
4. Execution.
(a) Execution by Registered Holder. The signature on the Rights
Certificate must correspond with the name of the registered holder exactly
as it appears on the face of the Rights Certificate without any alteration
or change whatsoever. Persons who sign the Rights Certificate in a
representative or other fiduciary capacity must indicate their capacity
when signing and, unless waived by the Subscription Agent in its sole and
absolute discretion, must present to the Subscription Agent satisfactory
evidence of their authority to so act.
(b) Execution by Person Other than Registered Holder. If the Rights
Certificate is executed by a person other than the holder named on the face
of the Rights Certificate, proper evidence of authority of the person
executing the Rights Certificate must accompany the same unless, for good
cause, the Subscription Agent dispenses with proof of authority.
(c) Signature Guarantees. Your signature must be guaranteed by an
Eligible Institution if you specify special payment or delivery
instructions.
5. Method of Delivery.
The method of delivery of Rights Certificates and payment of the
Subscription Price to the Subscription Agent will be at the election and risk of
the Rights holder, but, if sent by mail, it is recommended that such
certificates and payments be sent by registered mail, properly insured, with
return receipt requested, and that a sufficient number of days be allowed to
ensure delivery to the Subscription Agent prior to 5:00 p.m., New York City
time, on the Expiration Date.
6. Special Provisions Relating to the Delivery of Rights Through the Depository
Trust Company.
In the case of Rights that are held of record through the Depository Trust
Company (the "Book-Entry Transfer Facility"), exercises of the Subscription
Right may be effected by instructing the Book-Entry Transfer Facility to
transfer Rights from the Book-Entry Transfer Facility account of such holder to
the Book-Entry Transfer Facility account of the Subscription Agent, together
with certification as to the aggregate number of Rights exercised and the number
of Underlying Shares thereby subscribed for pursuant to the Subscription Right
by each beneficial owner of Rights on whose behalf such nominee is acting, and
payment of the Subscription Price for each share of Common Stock subscribed for
pursuant to the Subscription Right.
4
7. Substitute Form W-9.
Each Rights holder who elects to exercise Rights should provide the
Subscription Agent with a correct Taxpayer Identification Number (TIN) on
Substitute Form W-9, a copy of which is included as Exhibit B hereto. Additional
copies of Substitute Form W-9 may be obtained upon request from the Subscription
Agent at the address or by calling the telephone number indicated above. Failure
to provide the information on the form may subject such holder to a $50.00
penalty for each such failure and to 31% federal income tax withholding with
respect to dividends that may be paid by the Company on shares of Common Stock
purchased upon the exercise of Rights (for those holders exercising Rights).
5
Exhibit A
Notice of Guaranteed Delivery
For
Rights Certificates
Issued by
Harken Energy Corporation
This form, or one substantially equivalent hereto, must be used to
exercise Rights pursuant to the Rights Offering described in the Prospectus
dated __________________, 2002 (the "Prospectus") of Harken Energy Corporation,
a Delaware corporation (the "Company"), if a holder of Rights cannot deliver the
certificate(s) evidencing the Rights (the "Rights Certificate(s)"), to the
Subscription Agent listed below (the "Subscription Agent") at or prior to 5:00
p.m., New York City time, on ______________, 2002, unless such time is extended
by the Company as described in the Prospectus (as it may be extended, the
"Expiration Date"). Such form must be delivered by hand or sent by telegram,
facsimile transmission, first class mail or overnight courier to the
Subscription Agent, and must be received by the Subscription Agent on or prior
to the Expiration Date.
Payment of the Subscription Price for each share of the Company's
Common Stock subscribed for upon exercise of such Rights must be received by the
Subscription Agent in the manner specified in the Prospectus at or prior to 5:00
p.m., New York City time, on the Expiration Date even if the Rights
Certificate(s) evidencing such Rights is (are) being delivered pursuant to the
Guaranteed Delivery Procedures thereof. See "The Rights Offering - Method of
Subscription - Exercise of Rights" in the Prospectus.
The Subscription Agent is:
American Stock Transfer & Trust Company
-------------------------
By mail, by hand or by overnight courier to:
American Stock Transfer & Trust Company
Attention: Rights Agent
59 Maiden Lane
New York, N.Y. 10038
Facsimile Transmission: (718) 234-5001
Telephone Number for Confirmation or Information: (718) 921-8237
Delivery of this instrument to an address other than as set forth above
above or transmission of this instrument via facsimile other than
as set forth above does not constitute a valid delivery.
A-1
Ladies and Gentlemen:
The undersigned hereby represents that the undersigned is the holder
of Rights Certificate(s) representing Rights and that such Rights Certificate(s)
cannot be delivered to the Subscription Agent at or before 5:00 p.m., New York
City time, on the Expiration Date. Upon the terms and subject to the conditions
set forth in the Prospectus, receipt of which is hereby acknowledged, the
undersigned hereby elects to exercise the Subscription Right to subscribe for
__________________ share(s) of Common Stock with respect to the Rights
represented by such Rights Certificate(s).
The undersigned understands that payment of the Subscription Price for
each share of Common Stock subscribed for pursuant to the Subscription Right
must be received by the Subscription Agent at or before 5:00 p.m., New York City
time, on the Expiration Date and represents that such payment, in the aggregate
amount of $____________ either (check appropriate box):
[_] is being delivered to the Subscription Agent herewith; or
[_] has been delivered separately to the Subscription Agent in the
manner set forth below (check appropriate box and complete
information relating thereto):
[_] Wire transfer of funds
Name of transferor institution:_____________________________
Date of transfer:___________________________________________
Confirmation number (if available):_________________________
[_] Uncertified check
Name of maker:______________________________________________
Date of check:______________________________________________
Check number:_______________________________________________
Bank on which check is drawn:_______________________________
[_] Certified check
Name of maker:______________________________________________
Date of check:______________________________________________
Check number:_______________________________________________
Bank on which check is drawn:_______________________________
[_] Bank draft (cashier's check)
Name of maker:______________________________________________
Date of check:______________________________________________
Check number:_______________________________________________
Bank on which check is drawn:_______________________________
[_] Money order
Name of maker:______________________________________________
Date of check:______________________________________________
Check number:_______________________________________________
Bank on which check is drawn:_______________________________
Signature(s)_____________________ Address __________________________________
_____________________ __________________________________
Name(s) _____________________ __________________________________
_____________________ Area Code and Tel. No(s).
Rights Certificate No(s). (if available)________________________________________
A-2
Guarantee of Delivery
(Not To Be Used For Rights Certificate Signature Guarantee)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States, or a bank, stockbroker, savings and loan association or credit union
with membership in an approved signature guarantee medallion program, pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, guarantees
that the undersigned will deliver to the Subscription Agent the certificates
representing the Rights being exercised hereby, with any required signature
guarantee and any other required documents, all within three (3) business days
after the date hereof.
___________________________________________ ________________________________
___________________________________________ ________________________________
(Address) (Name of Firm)
___________________________________________ ________________________________
(Area Code and Telephone Number) (Authorized Signature)
The institution which completes this form must communicate the
guarantee to the Subscription Agent and must deliver the Rights Certificate(s)
to the Subscription Agent within the time period shown in this prospectus.
Failure to do so could result in a financial loss to such institution.
A-3
Exhibit B
Important Tax Information
This tax information is provided in connection with the Harken Energy
Corporation (the "Company") prospectus dated ______________, 2002 (the
"Prospectus").
Under the United States federal income tax laws, dividend payments
that may be made by the Company on shares of its Common Stock, par value $0.01,
issued upon the exercise of non-transferable subscription rights (the "Rights")
may be subject to backup withholding. Generally such payments will be subject to
backup withholding unless the holder (i) is exempt from backup withholding or
(ii) furnishes the payer with its correct taxpayer identification number (TIN)
and certifies that the number provided is correct and further certifies that
such holder is not subject to backup withholding as a result of a failure to
report all interest or dividend income. Each Rights holder that exercises Rights
and wants to avoid backup withholding should provide the Subscription Agent, as
the Company's agent in respect of exercised Rights (the "Requester"), with such
holder's correct taxpayer identification number (or with a certification that
such holder is awaiting a taxpayer identification number) and with a
certification that such holder is not subject to backup withholding by
completing Substitute Form W-9 below.
Certain holders (including, among others, all corporations and certain
foreign individuals) are exempt from these backup withholding and reporting
requirements. In general, in order for a foreign individual to qualify as an
exempt recipient, that holder must submit a statement, signed under the
penalties of perjury, attesting to that individual's exempt status. Such
statements may be obtained from the Subscription Agent. Exempt holders, while
not required to file Substitute Form W-9, should file Substitute Form W-9 to
avoid possible erroneous backup withholding. See the enclosed Guidelines for
Request for Taxpayer Identification Number and Certification on Substitute Form
W-9 for additional instructions.
If backup withholding applies, the Company or the Subscription Agent,
as the case may be, will be required to withhold up to 31% of any such dividend
payments made to a Rights holder that exercises Rights. Backup withholding is
not an additional tax. Rather, the amount of backup withholding is treated, like
any other withheld amounts, as an advance payment of the person's tax liability,
and the tax liability of persons subject to backup withholding will be reduced
by the amount of tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained.
Purpose of Substitute Form W-9
To prevent backup withholding on dividend payments, a Rights holder
that exercises Rights is required to notify the Subscription Agent of such
holder's correct taxpayer identification number by completing Substitute Form
W-9 below and certifying on Substitute Form W-9 that the taxpayer identification
number provided is correct (or that such Rights holder is awaiting a taxpayer
identification number). In addition, the holder is required to certify on
Substitute Form W-9 that it is (i) exempt from backup withholding, or (ii) not
subject to backup withholding due to prior under reporting of interest or
dividend income, or (iii) the Internal Revenue Service (the "IRS") has notified
it that it is no longer subject to backup withholding.
What Number to Give the Subscription Agent
The Rights holder that exercises Rights is required to give the
Subscription Agent the taxpayer identification number of the record owner of the
shares of Common Stock issued upon the exercise of the Rights. If such record
owner is an individual, the taxpayer identification number is the taxpayer's
social security number. For most other entities, the taxpayer identification
number is the employer identification number. If the shares of Common Stock
issued upon the exercise of the Rights are in more than one name or are not in
the name of the actual owner, consult the enclosed Guidelines for Request for
Taxpayer Identification Number and Certification on Substitute Form W-9 for
additional guidelines on what number to report. If the Subscription Agent is not
provided with the correct taxpayer identification number in connection with such
payments, the holder may be subject to a penalty imposed by the IRS.
B-1
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Requestor's Name:
Give form to the Requestor. DO NOT send to the IRS.
- ---------------------------------------------------------------------------------------------------
Name
- ---------------------------------------------------------------------------------------------------
Business name, if different from above
- ---------------------------------------------------------------------------------------------------
Check appropriate box: Individual/Sole Proprietor [_] Corporation [_] Partnership [_] Other [_]
- ---------------------------------------------------------------------------------------------------
Address (number, street, and apt. or suite no.)
- ---------------------------------------------------------------------------------------------------
City, State and ZIP code
- ---------------------------- ---------------------------------- -----------------------------------
Part I - Taxpayer Social Security Number______________________
Identification Number (TIN) Employer Identification Number______________
Enter your TIN in the
appropriate box. For most
individuals, this is your social
security number (SSN). For most
SUBSTITUTE other entities, it is your
Form W-9 employer identification number
Department of (EIN).
the Treasury -------------------------------------------------------------------------------
Internal Revenue Part II - If you do not have a TIN check the "TIN Applied for" box below. See
Service "How to Get a TIN" in the enclosed guidelines. If you are exempt from backup
withholding, check the "Exempt" box below. See "Exemption from Backup
Withholding" in the enclosed guidelines.
TIN Applied for [_] Exempt [_]
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Part III - Certification
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding; or (b) I have not been notified by the Internal Revenue Service
(IRS) that I am subject to backup withholding as a result of a failure to report
all interest or dividends; or (c) the IRS has notified me that I am no longer
subject to backup withholding.
Certification Instructions - You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because you have
failed to report all interest and dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (2). The Internal Revenue Service does
not require your consent to any provision of this document other than the
certifications required to avoid backup withholding.
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Signature________________________________ Date________________________________
- --------------------------
NOTE: Failure to complete this form may result in backup withholding of up
to 31% on any payments made to you. Please review enclosed guidelines for
request for taxpayer identification number and certification on Substitute
Form W-9 for additional details.
B-2
Certificate of Awaiting Taxpayer Identification Number
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number to the requester a portion (not to
exceed 31%) of all reportable payments made to me will be retained and may be
remitted to the Internal Revenue Service as backup withholding until I provide a
taxpayer identification number to the requester.
Signature ___________________________ Date ________________________________
________________________________________________________________________________
Name (Please Print)
GUIDELINES FOR REQUEST FOR TAXPAYER IDENTIFICATION
NUMBER AND CERTIFICATION ON SUBSTITUTE FORM W-9
What Name and Number to Give the Requester
Name. If you are an individual, you must generally enter the name shown on
your Social Security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, enter your first name, the last name shown on your Social
Security card, and your new last name. If the account is in joint names, list
first and then circle the name of the person or entity whose number you enter in
Part I of the form.
Sole Proprietor - You must enter your individual name as shown on your
Social Security card. You may enter your business, trade or "doing business as"
name on the business name line.
Other Entities - Enter the business name as shown on required federal
income tax documents. This name should match the name shown on the charter or
other legal document creating the entity. You may enter any business, trade or
"doing business as" name on the business name line.
Taxpayer Identification Number (TIN). You must enter your taxpayer
identification number in the appropriate box. If you are a resident alien and
you do not have and are not eligible to get a Social Security number, your
taxpayer identification number is your IRS individual taxpayer identification
number (ITIN). Enter it in the Social Security number box. If you do not have an
individual taxpayer identification number, see "How to Get a TIN" below. If you
are a sole proprietor and you have an employer identification number, you may
enter either your Social Security number or employer identification number.
However, using your employer identification number may result in unnecessary
notices to the Requester.
Social Security numbers (SSNs) have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers (EINs) have nine digits
separated by only one hyphen: i.e. 00-0000000.
B-3
For this type of account: Give Name and SSN of: For this type of account: Give Name and SSN of:
------------------------- --------------------- ------------------------- ---------------------
1. Individual The individual 6. A valid trust, estate The legal entity (4)
or pension trust
2. Two or more The actual owner of the 7. Corporation The corporation
individuals (joint account) account or, if combined
funds, the first
individual on the
account (1)
3. Custodian account of a The minor (2) 8. Association, club, The organization
minor (Uniform Gift to religious, charitable,
Minors Act) educational or other tax-
exempt organization
4. a. The usual revocable The grantor-trustee (1) 9. Partnership The partnership
savings trust (grantor is
also trustee)
b. The so-called trust The actual owner (1) 10. A broker or The broker or nominee
account that is not a legal registered nominee
or valid trust under state
law
5. Sole proprietorship The owner (3) 11. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district, or prison
that receives
agricultural
payments)
- -------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your Social Security number or
employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
Note: If no name is circled when more than one name is listed, the number
will be considered to be that of the first name listed.
How to Get a TIN. If you do not have a taxpayer identification number,
apply for one immediately. To apply for a Social Security number, get Form SS-5,
Application for a Social Security Number Card, from your local Social Security
Administration office. Get Form W-7 to apply for an individual taxpayer
identification number or Form SS-4, Application for Employer Identification
Number, to apply for an employer identification number. You can get Forms W-7
and SS-4 from the IRS.
If you do not have a taxpayer identification number, check the
"TIN Applied For" box in Part II of the form and sign the Certificate of
Awaiting Taxpayer Identification Number, sign and date the form, and give it to
the Requester. For interest and dividend payments and certain payments made with
respect to readily tradable instruments, you will generally have 60 days to get
a taxpayer identification number and give it to the Requester. Other payments
are subject to backup withholding.
Note: Checking the "TIN Applied For" box means that you have already
applied for a taxpayer identification number or that you intend to apply for one
soon.
B-4
Exemption From Backup Withholding
Payees Exempt From Backup Withholding. Individuals (including sole
proprietors) are NOT exempt from backup withholding. Corporations are exempt
from backup withholding for certain payments, such as interest and dividends.
For interest and dividends, the following payees are exempt from backup
withholding:
. A corporation;
. A financial institution;
. An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), an individual retirement
account (IRA), or a custodial account under section 403(b)(7) of the Code
if the account satisfies the requirements of section 401(f)(2) of the Code;
. The United States or any of its agencies or instrumentalities;
. A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities;
. A foreign government or any of its political subdivisions, agencies or
instrumentalities;
. An international organization or any of its agencies or instrumentalities;
. A real estate investment trust;
. A common trust fund operated by a bank under section 584(a) of the Code;
. An entity registered at all times during the tax year under the Investment
Company Act of 1940;
. A foreign central bank of issue;
. A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List; and
. A trust exempt from tax under section 664 of the Code or described in
section 4947 of the Code.
Payments Exempt From Backup Withholding. Dividends and patronage dividends
that generally are exempt from backup withholding include:
. Payments to nonresident aliens subject to withholding under section 1441 of
the Code;
. Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner;
. Payments of patronage dividends not paid in money;
. Payments made by certain foreign organizations; and
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. Payments made by an ESOP pursuant to section 404(k) of the Code.
Interest payments that are generally exempt from backup withholding
include:
Payments of interest on obligations issued by individuals. Note, however, that
such a payment may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business, and you have
not provided your correct taxpayer identification number or you have provided an
incorrect taxpayer identification number to the payer;
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852 of the Code);
. Payments described in section 6049(b)(5) of the Code to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451 of the Code; and
. Payments made by certain foreign organizations.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A and 6050N of the Code, and their regulations.
If you are exempt from backup withholding, you should still complete and
file Substitute Form W-9 to avoid possible erroneous backup withholding. Enter
your correct taxpayer identification number in Part I, check the "Exempt" box in
Part II, and sign and date the form and return it to the Requester.
If you are a nonresident alien or a foreign entity not subject to backup
withholding, you must give the Requester a properly completed Form W-8BEN,
Certificate of Foreign Status of Beneficial Owner for United States Tax
Withholding or W-8ECI, Certificate of Foreign Person's Claim of Exemption from
Withholding on Income Effectively Connected with Conduct of a Trade or Business
in the United States. A Form W-8BEN or W-8ECI can be obtained from the
Requester.
Privacy Act Notice
Section 6109 of the Code requires you to give your correct taxpayer
identification number to persons who must file information returns with the IRS
to report interest, dividends and certain other income paid to you. The IRS uses
the numbers for identification purposes and to help verify the accuracy of your
tax return. The IRS may also provide this information to the Department of
Justice for civil and criminal litigation and to cities, states, and the
District of Columbia to carry out their tax laws. You must provide your taxpayer
identification number whether or not you are required to file a tax return.
Payers must generally withhold up to 31% of taxable interest, dividends and
certain other payments to a payee who does not furnish a taxpayer identification
number to a payer. Certain penalties may also apply.
For additional information, contact your tax consultant
or the Internal Revenue Service.
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